A.M. Best Affirms TIG Holdings' "A" -Excellent- Rating On Announcement of Fairfax's Plan to Acquire.OLDWICK, N.J.--(BUSINESS WIRE)--Dec. 4, 1998--A.M. Best Co. today affirmed the "A" (Excellent) rating of TIG n. 1. A game among children. See Tag. 2. A capacious, flat-bottomed drinking cup, generally with four handles, formerly used for passing around the table at convivial entertainment. Holdings Group, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , and removed it from under review. The action follows the group's announcement that Fairfax Financial Holdings Fairfax Financial Holdings Limited TSX: FFH.SV NYSE: FFH is a Toronto, Ontario based financial services holding company which, through its subsidiaries, is engaged in property, casualty and life insurance and reinsurance, investment management and insurance claims Ltd. has signed a definitive agreement to acquire TIG Holdings Inc. and its insurance operating subsidiaries for cash consideration of approximately $840 million. The affirmation reflects the favorable implications of the announced transaction, which strategically complements Fairfax's well-established primary and reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. operations. A.M. Best expects the TIG group to continue to operate independently within the Fairfax organization. The transaction removes operational and ownership uncertainties that recently affected the group's market stability. In addition, TIG will benefit from the significant financial flexibility afforded by the Fairfax Financial group. The Excellent rating associated with TIG's primary operations reflects its solid core earnings, improved operating fundamentals, strengthened loss reserve position and good capitalization. A. M. Best believes TIG's success is derived from its defensible de·fen·si·ble adj. Capable of being defended, protected, or justified: defensible arguments. de·fen commercial program strategy, which has developed a well-diversified, seasoned book of business and demonstrated a high degree of persistency, despite recent market uncertainties. The affirmation is contingent upon Adj. 1. contingent upon - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent on, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent the timely completion of the proposed transaction. A delay, non-closure or material change in the announced transaction would cause A.M. Best to revisit re·vis·it tr.v. re·vis·it·ed, re·vis·it·ing, re·vis·its To visit again. n. A second or repeated visit. re the rating. The "A" rating on TIG Reinsurance remains under review, reflecting potential business disruption created by market uncertainties during the upcoming renewal season. However, TIG Re's under review status has been improved from negative to developing, reflecting the favorable near-term implications of a committed owner with significant financial flexibility. A.M. Best believes the transaction also has favorable longer-term implications, as it supports Fairfax Financial's global reinsurance diversification strategy. Fairfax is expected to fund the acquisition through the issuance of stock in order to maintain holding company financial leverage at acceptable levels. The subscription offering will generate proceeds that are placed in escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. within a two-week timeframe, effectively removing financing risk from the transaction. Ratings associated with other Fairfax insurance organizations remain unaffected by this transaction. A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. |
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