OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has removed from under review with negative implications and downgraded the Financial Strength Rating (FSR) to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a-” (Excellent) from “a+” (Excellent) of Electric Insurance Company (EIC) (Beverly, MA). The outlook assigned to these Credit Ratings (ratings) is negative. Concurrently, AM Best has withdrawn these ratings as the company has requested to no longer participate in AM Best’s interactive rating process.
The ratings reflect EIC’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The rating downgrades reflect the change in ownership of EIC following the announcement of Riverstone International on acquiring EIC effective June 1, 2024. Prior to the announcement, EIC’s ratings benefited from implied support from its ultimate parent, General Electric (GE). Following this announcement, due to uncertainty around the future of EIC’s capital management, operating performance and future business profile, and detachment from GE, AM Best took negative rating actions on EIC’s FSR and Long-Term ICR. The negative outlooks reflect uncertainty of new ownership maintaining the level of capital to support the current balance sheet strength assessment of very strong.
Riverstone International specializes in legacy runoff insurance. It is domiciled in Jersey and owned by CVC Capital Partners. Riverstone International intends an orderly run-off of the obligations of EIC and to not issue or renew commercial or personal lines policies, except as may be required by applicable laws. EIC’s commercial lines have entered run-off effective Jan. 1, 2024. In addition, EIC exited all personal lines business and began non-renewing policies effective Jan. 1, 2024, while servicing policies through its respective expiration date. As part of the sale agreement, GE also has entered into a renewal rights agreement, upon individual policy expirations, with Plymouth Rock for personal lines policies. The renewal rights agreement provides replacement coverage to most policyholders in six states (Connecticut, Massachusetts, New Jersey, New Hampshire, New York, and Pennsylvania), which will be offered to eligible policy holders in these states, subject to regulatory approval.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
