A.M. Best Places Universal Casualty Co. Under Review With Positive Implications.OLDWICK, N.J.--(BUSINESS WIRE)--Oct. 27, 1997--Effective immediately, the "B-" (Fair ) rating of Universal Casualty Co., Niles, Ill., has been placed under review with positive 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. , Toronto, Canada, has entered into a definitive agreement to acquire all of the outstanding shares of Universal Casualty Corp. and its affiliate, Ark Insurance Agency. Universal Casualty Corp. is a privately owned holding company that owns 100% of Universal Casualty Co. Under the terms of the proposed acquisition, Universal would benefit from the increased financial flexibility of Kingsway, which plans to strengthen Universal's balance sheet for growth opportunities while providing it with a broader base of product knowledge and expertise. In addition, Kingsway intends to leave Universal's current management team, employees and operations intact. The transaction will give Kingsway an excellent opportunity to enter the U. S. property and casualty market, which is in keeping with its long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. strategy. Universal's rating will remain under review pending the close of the transaction, A.M. Best's review of the company's pro-forma financial statements and discussions with management regarding operating plans. The agreement is subject to applicable regulatory approval and is expected to close in the first quarter of 1998. Universal exclusively writes non-standard automobile insurance in Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. , which is serviced through Ark -- a managing general agent providing the company with marketing, 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. , billing and collection services. In 1996, Universal wrote $51 million in premiums. Universal's "B-" (Fair) rating reflects the company's high underwriting leverage, which was escalated by significant premium growth 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. dependence. In addition, the company's product and geographic concentration of risk subjected it to regulatory and business risks, which were heightened by increasing competition in the Illinois non-standard automobile market. A.M. Best views the proposed acquisition positively, as it should alleviate Alleviate To make something easier to be endured. Mentioned in: Kinesiology, Applied many of these concerns. Kingsway Financial Services is a publicly traded holding company on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. and writes non-standard automobile insurance in Canada. The company operates through three wholly owned insurance subsidiaries: Kingsway General Insurance Co., York York, former name of Toronto, Canada York, Ont.: see Toronto, Ont., Canada. York, city, England York, city (1991 pop. 123,126) and district, North Yorkshire, N England, at the confluence of the Ouse and Foss rivers. Fire & Casualty Insurance Co. and Jevco Insurance Co. The "A" (Excellent) ratings of Kingsway General and York Fire & Casualty are unaffected by this transaction. A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. CONTACT: Jeffrey Dunsavage 908/439-2200, ext. 5684 dunsavj@ambest.com |
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