OLDWICK, NJ–(BUSINESS WIRE)–AM Best was removed from review with development implications and affirmed the issuer’s financial strength rating of A- (Excellent) and the issuer’s long-term credit rating (long-term ICR) of “a-” ( Excellent) of StarStone Specialty Insurance Company and StarStone National Insurance Company (collectively Core Specialty), which are domiciled in Wilmington, DE and subsidiaries of Core Specialty Insurance Holdings, Inc. The outlook assigned to these credit ratings (ratings) is Stable .
The ratings reflect Core Specialty’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate management of business risks.
These rating actions follow the closing of Core Specialty’s merger with Lancer Insurance Group (Lancer). The merger was executed via a stock and cash transaction announced on April 16, 2021. This merger with Lancer marks Core Specialty’s first merger or acquisition since the recapitalization of StarStone US Holdings, Inc. in November 2020. Lancer will operate as a division of Core Specialty, retaining its legacy brand image, management team and operating sites. Additionally, Dave Delany, co-founder and CEO of Lancer, has joined the Core Specialty Board of Directors.
AM Best has analyzed the combined initial pro forma position of the two groups and determined that the risk-adjusted capitalization position remains in the strongest category, as measured by Best’s capital adequacy ratio (BCAR). Although it is expected that the combination of the groups may have an accretive impact on their business profiles, further integration will need to take place before these benefits are realized. AM Best will continue to monitor the group as it approaches the closing of the year-end financial statements and will likely reassess the impact once the final 2021 year-end audit is complete.
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