A.M. Best: Western World Ratings Unchanged
A.M. Best has commented that the ratings of the pooled insurance members of Western World Insurance Group are unchanged following its recent announcement that it has reached a definitive agreement to be acquired by Bermuda-based Validus Holdings, Ltd. for $690 million in cash.
The transaction is anticipated to close in the late third quarter or early fourth quarter of 2014, subject to regulatory approvals and other customary closing conditions.
A statement from the ratings agency said, “Western World specializes in underwriting a variety of specialty products on both a surplus lines and admitted basis, consisting primarily of general liability, commercial automobile and professional liability coverages.
“From a strategic standpoint, Western World will allow Validus to enhance and expand its business profile by providing a U.S. specialty commercial insurance distribution platform. Post transaction close, Western World’s current management team will remain intact, and Western World will operate as a separate entity under Validus.
“A.M. Best’s comment takes into consideration the terms of the agreement, the “bolt-on” nature of the acquisition, the potential for synergies and efficiencies to be gained in the future and the benefits of being acquired by a larger, well regarded Bermuda-based global re/insurance organization.
“A.M. Best’s comment also takes into consideration Western World’s strong leadership position in the U.S. excess and surplus lines sector and its strategic role within the Validus group once the transaction is finalized.
“From a strategic standpoint, Western World provides Validus with immediate access to approximately $300 million of U.S. specialty commercial lines premiums, additional flexibility via admitted and non-admitted platforms, direct access to more than 270 agents and brokers throughout the United States and a franchise that is well regarded among its excess and surplus lines peers.
“While the ratings remain unchanged, A.M. Best will continue to monitor Western World’s results up until the close of the transaction.”
