OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best Co. has commented that the ratings of Eastern Alliance
Insurance Group (EAIG) and its members remain unchanged following the
recent announcement that the holding company, Eastern Insurance
Holdings, Inc. (EIHI) (NASDAQ: EIHI), through its operating
subsidiaries, will acquire Employers Security Holding Company (ESHC)
(Indianapolis, IN). EAIG consists of Eastern Alliance Insurance
Company (EAIC), Allied Eastern Indemnity Company (AEIC) and Eastern
Advantage Assurance Company (EAAC), which operate under an
intercompany pooling agreement.
EIHI and ESHC have executed a merger agreement for the acquisition
of ESHC and are entering the regulatory approval process with the
transaction expected to close in late third quarter 2008. Included in
the purchase is Employers Security Insurance Company (ESIC)
(Indianapolis, IN), a wholly owned operating subsidiary of ESHC. ESIC
is currently not formerly followed by A.M. Best; however, upon
closing, it is expected to be integrated into the EAIG pool, thus,
sharing the ratings assigned to EAIG as a pool member. A.M. Best will
monitor the progress of the integration going forward.
On April 18, 2008, A.M. Best affirmed the financial strength
rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of
"a-"of EAIG and its members. Concurrently, A.M. Best affirmed the ICR
of "bbb-" of EIHI. At that time, the outlook for these ratings was
revised to positive from stable. Additionally, A.M. Best affirmed the
FSR of A- (Excellent) and ICR of "a-" of Eastern Life and Health
Insurance Company (Eastern Life and Health) with a stable outlook. All
companies are domiciled in Lancaster, PA unless otherwise noted.
With the acquisition of ESHC, EIHI is purchasing a mono-line
provider of Indiana workers' compensation insurance, which offers
guaranteed cost policies for the small to medium sized risk, as well
as large deductible products for their larger risks. The transaction
provides EIHI additional geographic diversification with proven
financial and operational performance. The transaction is not subject
to financing contingencies and will be funded with existing cash.
For Best's Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.
Founded in 1899, A.M. Best Company is a global full-service credit
rating organization dedicated to serving the financial and health care
service industries, including insurance companies, banks, hospitals
and health care system providers. For more information, visit
www.ambest.com.
Source: A.M. Best Company
Contact: A.M. Best Company
Analysts
Gordon McLean, 908-439-2200, ext. 5304
gordon.mclean@ambest.com
or
Michelle Baurkot, 908-439-2200, ext. 5507
michelle.baurkot@ambest.com
or
Public Relations
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com