AM Best Removes From Under Review With Positive Implications and Upgrades Issuer Credit Ratings of Protective Insurance Corporation and Its Subsidiaries
August 25 2021 - 5:19PM
Business Wire
AM Best has removed from under review with positive
implications and upgraded the Long-Term Issuer Credit Ratings
(Long-Term ICR) to “a+” (Excellent) from “a” (Excellent) and
affirmed the Financial Strength Rating of A (Excellent) of
Protective Insurance Company and its wholly owned subsidiaries,
Sagamore Insurance Company and Protective Specialty Insurance
Company, collectively referred to as Protective Insurance
Corporation Group (Protective). AM Best also has removed from under
review with positive implications and upgraded the Long-Term ICR to
“bbb+” (Good) from “bbb” (Good) of Protective Insurance
Corporation, the group’s immediate holding company. The outlook
assigned to these Credit Ratings (ratings) is stable. Concurrently,
AM Best has withdrawn the rating of Protective Insurance
Corporation as company management has requested that this entity no
longer participate in AM Best’s interactive ratings process. All
companies are domiciled in Carmel, IN.
The ratings reflect the group’s balance sheet strength, which AM
Best assesses as very strong, as well as its adequate operating
performance, neutral business profile and appropriate enterprise
risk management (ERM).
In July, The Progressive Corporation (NYSE: PGR) (Progressive)
completed the acquisition of Protective Insurance Corporation.
Under the terms of the merger agreement, holders of Class A and
Class B common shares of Protective received $23.30 per share in
cash, without interest, for a total transaction value of
approximately $338 million. The rating upgrades reflect
Protective’s integration into the Progressive organization, which
offers synergistic opportunities where Progressive benefits from a
complimentary book of business, and Protective benefits from the
backing of a much larger organization with robust sophistication
and access to capital. Progressive’s management has indicated it
will support Protective regarding efforts to modernize
infrastructure and will manage the group in a similar capacity as
its other insurance entities.
Prior to the acquisition, Protective had been implementing
corrective actions regarding its current book of business, most
notably strengthening loss reserves, implementing rate increases
and discontinuing non-core lines of business. The impact of these
results has gained traction as evidenced by operating performance
that has gradually improved since 2018 and more favorably, loss
reserve development trends. Additionally, Protective re-focused
efforts on its core lines of business providing coverage for fleet
transportation. The ERM program remains appropriate for the group’s
risk profile.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best’s
Credit Ratings. For information on the proper use of Best’s Credit
Ratings, Best’s Preliminary Credit Assessments and AM Best press
releases, please view Guide to Proper Use of Best’s Ratings &
Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Chris Draghi Associate Director +1 908 439
2200, ext. 5043 chris.draghi@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Michelle Baurkot Director +1 908 439 2200, ext.
5314 michelle.baurkot@ambest.com
Jim Peavy Director, Communications +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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