A.M. Best Places Lincoln General Under Review Following Merger Announcement.OLDWICK, N.J.--(BUSINESS WIRE)--Aug. 17, 1998--Effective immediately, A.M. Best Co. has placed the "A" (Excellent) rating of Lincoln General Insurance Co., York, Pa., under review with developing implications. The rating action follows the recent announcement that Kingsway Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , Inc., Toronto, has signed a definitive merger agreement, pursuant to which Kingsway will acquire all of the outstanding shares of Lincoln's parent, Walshire Assurance Co. The transaction is subject to regulatory and stockholder approvals and is expected to close during the fourth quarter of 1998. The under review status and developing implications reflect the uncertainties associated with integration and potential business disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. pending the close of the transaction, as well as A. M. Best's continued concern as to the stability of Lincoln's future operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before . Lincoln's underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. performance had previously been negatively impacted by adverse loss-reserve development, fierce commercial price competition, and mandated workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. rate reductions in its primary operating territories. Lincoln's rating will remain under review pending the close of the transaction and A.M. Best's discussions with management concerning integration issues and future business plans. The "B+" (Very Good) rating of Walshire's other insurance subsidiary, Yorktown Insurance Co., is unaffected by the proposed transaction, as its financial position should not be materially affected. Lincoln is a commercial property and casualty insurance company licensed in 39 states, primarily offering automobile coverages for small trucking fleets and owner operators and workers' compensation for trucking employees. In 1997, Lincoln wrote $57 million in gross premium. The transaction represents a continuation of Kingsway's growth strategy in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , through acquisition of companies which afford it the opportunity to expand its core lines of business. Kingsway is a financial services holding company that invests in the property and casualty insurance industry in Canada and North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Through its principal subsidiaries, the company's primary business is providing nonstandard non·stan·dard adj. 1. Varying from or not adhering to the standard: nonstandard lengths of board. 2. personal automobile coverage in Ontario and the United States. 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.
CONTACT: A.M. Best Co., Oldwick
Jeffrey Dunsavage
(908) 439-2200, ext. 5618
dunsavj@ambest.com
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