A.M. Best comments on Intact’s acquisition of OneBeacon | Canadian Insurance

A.M. Best comments on Intact’s acquisition of OneBeacon

Intact's rating is unchanged while OneBeacon's is under review

After announcing the $2.3 billion acquisition of U.S. specialty insurer OneBeacon Insurance Group Ltd. on May 3, Intact Financial Corporation’s (IFC) credit rating will be unchanged by credit rating agency A.M. Best.

The credit rating of OneBeacon is currently under review with positive implications by the rating agency. A.M. Best says in a press release this rating was given because of the potential positive operating and financial benefits OneBeacon will gain by becoming part of Intact, a larger, higher-rated organization.

A.M. Best also says Intact’s rating is unchanged because of its successful acquisition track record and its ability to mitigate risks. The rating agency believes the purchase of OneBeacon “bolsters IFC’s Canadian business with new products and cross-border capabilities, and better positions the company to compete with North American insurers.” OneBeacon makes more than US$2 billion in annual specialty insurance premiums across North America.

IFC’s acquisition was made through $700 million in equity financing, approximately $700 million in excess capital and an approximate $1 billion loan comprised of bank term loans, medium term notes and preferred shares. The deal is anticipated to be approved in Q4 2017 once it receives regulatory approval, said A.M. Best.

Read: Intact Financial buys U.S. specialty insurer for C$2.3 billion