A.M. Best Places Ratings of Subsidiaries of North Pointe Holdings Corporation Under Review With Positive Implications
January 08 2008 - 3:38PM
Business Wire
A.M. Best Co. has placed the financial strength rating (FSR) of A-
(Excellent) and issuer credit rating (ICR) of �a-� of North Pointe
Insurance Company (NPIC) (Southfield, MI) and the FSR of B+ (Good)
and ICR of �bbb-� of North Pointe Casualty Insurance Company
(NPCIC) (Jacksonville, FL) under review with positive implications.
Concurrently, A.M. Best has placed the FSR of B++ (Good) and the
ICR of �bbb+� of Capital City Insurance Company, Inc. (Capital
City) (Columbia, SC) under review with positive implications. All
the above companies are subsidiaries of North Pointe Holdings
Corporation (NPHC) (Southfield, MI) (NASDAQ: NPTE). These rating
actions follow the recent announcement that NPHC has entered into a
definitive agreement to be acquired by QBE Holdings, Inc. (QBE) in
a merger agreement. QBE is a subsidiary of Australia�s QBE
Insurance Group, Limited [ASX: QBE.AX], a global insurer and
reinsurer conducting business through property/casualty insurance
subsidiaries in eight countries headquartered in North and South
America. A.M. Best expects the ICR of �bb+� of NPHC to be withdrawn
upon the completion of its acquisition by QBE. These rating actions
are based on the increased financial wherewithal anticipated to be
available to NPHC and its subsidiaries as a result of the
transaction. NPHC will be a member of QBE Americas, which had in
excess of $2 billion in policyholders� surplus through third
quarter 2007. The acquisition of NPHC is being funded by existing
cash held by QBE in the United States. The under review status
takes into consideration the change in ownership and the
integration risks associated with this latest addition to QBE�s
U.S. operation. This risk is partially mitigated by the experience
QBE has integrating large insurance operations. The ratings will
remain under review pending the completion of the transaction,
which is subject to the satisfaction of certain closing conditions
and is expected to close during the first half of 2008. For Best�s
Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings. Founded in
1899, A.M. Best Company is a global full-service credit rating
organization dedicated to serving the financial and health care
service industries, including insurance companies, banks, hospitals
and health care system providers. For more information, visit
www.ambest.com.
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