AM Best has affirmed that the under review with developing implications status for the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) for Accredited Specialty Insurance Company (ASI) (Gilbert, AZ), Accredited Surety and Casualty Company, Inc. (ASC) (Orlando, FL), and Accredited Insurance (Europe) Limited (AIEL) (Malta), collectively known as Accredited, remains unchanged following a recent update on their pending sale.
On June 13, 2024, Randall & Quilter Insurance Holdings Ltd. (R&Q) provided an update on its proposed sale of Accredited to funds advised by Onex Corporation (Onex). R&Q disclosed that Onex had proposed an alternative transaction structure in response to challenges in meeting the original sale’s closing conditions. This alternative involves R&Q initiating a provisional liquidation process in Bermuda, followed by completing the sale of Accredited through that framework. R&Q cited unexpected costs, constraints on external transactions, and adverse reserve developments as factors negatively impacting its operational and financial stability. The R&Q board is exploring various options, including evaluating the alternative proposal and seeking liquidity while pursuing the original sale.
AM Best views the alternative structure as potentially incrementally beneficial for Accredited compared to the original proposal.
The ratings for Accredited were initially placed under review with developing implications on Oct. 22, 2023, when R&Q entered into a conditional agreement to sell Randall & Quilter America Holdings Inc., the intermediate holding company of Accredited, to Onex-advised funds.
The ratings will remain under review until the sale process concludes, expected by the end of the second quarter of 2024 or shortly thereafter. AM Best plans to assess the support provided by Onex to Accredited and will subsequently resolve the ratings review.
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