Fairfax Financial may see huge possibilities in its $4.9 billion agreement to buy Allied World Assurance Co., but Fitch Ratings is responding cautiously to the news.

Fitch placed Allied World’s ‘A+’ Insurer Financial Strength ratings, and those of its operating subsidiaries, on Rating Watch Negative following the M&A news.

Fitch explained that its assessment “reflects the uncertainty whether ownership by Fairfax will constrain Allied World’s ratings.”

At issue: Fitch hasn’t maintained a public rating on Fairfax since November 2013. One the sale closes in the 2017 second quarter, Allied World is slated to become a wholly owned Fairfax Financial subsidiary, keeping its executive and senior management teams intact.

“Resolution of the [Rating Watch Negative] on Allied World will consider Fitch’s view on the consolidated strength of Fairfax and the future strategic importance of Allied World within Fairfax,” Fitch said. “The ratings analysis will weigh implications of the transaction for Allied World in several key areas including underwriting strategy and business retention prospects, as well as potential changes in capital management and risk asset allocation.”

Earlier in December, Fitch affirmed all of its ratings for Allied World and its subsidiaries with a Stable Outlook.

Source: Fitch Ratings