OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best Co. has commented that the financial strength rating of
A (Excellent) and issuer credit ratings (ICR) of “a” of the
property/casualty subsidiaries of Eastern Insurance Holdings, Inc.
(EIHI) [NASDAQ: EIHI] (collectively referred to as Eastern Alliance
Insurance Group [EAIG]), as well as Eastern Re Ltd. SPC
(Eastern Re) (Grand Cayman, Cayman Islands) are unchanged. Concurrently,
A.M. Best has commented that the ICR of “bbb” of EIHI is unchanged.
This comment follows EIHI’s joint announcement today with ProAssurance
Corporation (ProAssurance) (Birmingham, AL) [NYSE: PRA] that EIHI
will merge with a newly formed subsidiary of ProAssurance. All companies
are domiciled in Lancaster, PA unless otherwise specified.
The all-cash transaction, with an aggregate value of approximately $205
million, will result in EIHI becoming a wholly owned subsidiary of
ProAssurance. The transaction is expected to close effective January 1,
2014, subject to customary closing conditions, including regulatory and
EIHI shareholder approval.
ProAssurance is an industry-leading specialty insurance company with
expertise in medical professional liability (approximately 88% of net
premiums written), products liability for medical technology and life
sciences (6%) and legal professional liability (6%). EIHI operates
through its subsidiaries as a domestic property casualty group
specializing in workers’ compensation products and services and
segregated portfolio cell reinsurance business.
ProAssurance views the acquisition of EIHI as a means of continuing to
build its insurance platform. Additionally, ProAssurance views EIHI as a
best-in-class workers’ compensation specialist with a proven track
record of growth and profitability that will allow it to broaden the
products it is able to offer existing customers and diversify its
product line.
EIH will retain its corporate, regional and satellite offices, and its
senior executives have agreed to enter into long-term contracts in
conjunction with the transaction. While there are some execution risks
involved in integrating EAIG and Eastern Re into the ProAssurance
organization, the companies will be members of a larger, strongly
capitalized and higher-rated organization and should realize some
economies of scale.
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Best’s Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc.ALL RIGHTS
RESERVED.
A.M. Best Co.
W. Dolson Smith, 908-439-2200, ext. 5379
Senior
Financial Analyst
w.dolson.smith@ambest.com
or
Alexander
Sarfo, 908-439-2200, ext. 5779
Senior Financial Analyst
alexander.sarfo@ambest.com
or
Rachelle
Morrow, 908-439-2200, ext. 5378
Senior Manager, Public
Relations
rachelle.morrow@ambest.com
or
Jim
Peavy, 908-439-2200, ext. 5644
Assistant Vice President,
Public Relations
james.peavy@ambest.com
Source: A.M. Best Co.