A.M. Best Co. assigned a financial strength rating of “A” (excellent) to Oklahoma-based Landmark American Insurance Co. The rating outlook is stable. This rating action follows the close of the Sept. 2 transaction in which Delaware-based Alleghany Corp. acquired Landmark American Insurance Co. from Royal & Sun Alliance Group for approximately $34 million. This action also follows the July 1 transaction in which Alleghany Corp. acquired Georgia-based Resurgens Specialty Underwriting Inc., (RSUI Inc.)—formerly known as Royal Specialty Underwriting Inc.—a managing underwriting agency; renewal rights to the ongoing business underwritten by RSUI; and the related unearned premium reserve portfolio for $115 million.
On June 30, Alleghany acquired RSUI Indemnity Co. (formerly Underwriters Reinsurance Co.) to support future admitted business to be underwritten by RSUI Inc. and capitalized at more than $500 million. It is expected that Alleghany will utilize Landmark as its surplus lines carrier to write the non-admitted business of RSUI Inc.
The assigned rating reflects the approval of a 90/10 quota share reinsurance agreement between RSUI Indemnity Co. and its new wholly-owned reinsured subsidiary, Landmark American Insurance Co. Furthermore, the new rating recognizes that 90 percent of Landmark’s losses are reinsured with its parent, as well as its excellent capitalization, the historical underwriting profitability of RSUI Inc.’s various books of business, Alleghany’s vital role in supporting and enhancing its business plan, Alleghany’s financial flexibility and its historical track record of profitably operating well-capitalized insurance subsidiaries. RSUI Inc. has an established infrastructure and experienced book of business that will be moved to Landmark’s paper. A.M. Best anticipates that the historical profitability will continue under Alleghany’s ownership.
As part of the initial transaction, Alleghany did not acquire any loss reserves associated with business previously produced and earned by RSUI Inc. or Landmark. To support future business to be underwritten, Alleghany capitalized Landmark at approximately $65 million. The source of funds for the transaction consists principally of invested assets at Alleghany, Alleghany Insurance Holdings LLC and RSUI Indemnity Co.
Topics Underwriting Reinsurance
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