ACP Re’s late filing of financial statements earlier in 2016 has left the Bermuda reinsurance and its multiple property/casualty subsidiaries in rough straits with A.M. Best.
The ratings agency downgraded the financial strength and issuer credit ratings of ACP Re and its reinsured subsidiaries, and those ratings remain under review with negative implications. But A.M. Best has also withdrawn its ratings entirely, as the company has requested to no longer participate in the interactive rating process.
Specifically, ACP Re’s financial strength rating is now B++ (Good), dropped from A- (Excellent). The issuer credit rating dropped to “bbb” from “a-“.
A.M. Best blamed its action on “the failure of each of the [ACP Re] companies to submit financial statements for year-end 2015 and for the U.S. domiciled companies for the first quarter of 2016.
ACP Re was hit with an “under review” status because of “continued uncertainty regarding the current and future financial status of the companies, due to the lack of information that would enable A.M. Best to complete monitoring and surveillance activities,” A.M. Best said.
A.M. Best’s ratings downgrade applied to ACP Re and: CastlePoint Florida Insurance Company, CastlePoint Insurance Company, CastlePoint National Insurance Company, Hermitage Insurance Company, Massachusetts Homeland Insurance Company, North East Insurance Company, Preserver Insurance Company, Tower Insurance Company of New York, Tower National Insurance Company and York Insurance Company of Maine.
ACP Re acquired struggling reinsurer Tower Group International and its subsidiaries in September 2014. The deal was a complex one well beyond ACP Re’s acquisition of Tower. Also, National General Holdings Corp. (part owner of ACP Re along with the founder of AMTrust Financial Services Inc. and Maiden Holdings Ltd., via a trust) closed its purchase of Tower’s personal lines business.
At the time, A.M. Best upgraded the financial strength ratings of Tower and its subsidiaries after the ACP Re acquisition went through, because the M&A deal helped ease Tower’s debt issues.
Source: A.M. Best