A.M. Best Co. has placed the financial strength ratings of A- (Excellent) of the members of the Century Insurance Group (Westerville, Ohio) under review with developing implications.
This is the result of a series of transactions completed on April 26, which concluded with the successful completion of the Initial Public Offering (IPO) of 8,900,000 common shares by Century Surety Company’s (Century Surety) parent company, ProCentury Corp. The net proceeds generated by the IPO were approximately $77,120,000, of which a minimum $55,000,000 is expected to be contributed to Century Surety.
The series of transactions in conjunction with and immediately preceding the close of the ProCentury Corporation IPO resulted in a transfer of ownership of Century Surety’s two subsidiary insurance carriers, Evergreen National Indemnity Company and Continental Heritage Insurance Company (both of Ohio). The ownership of these two former subsidiaries was transferred to a separate, newly formed holding company, ProAlliance Corporation, which was not party to the IPO.
Operationally, the dissolution of the pooling agreement will allow Century Surety to re-focus on its core excess and surplus lines business. A.M. Best will meet with the management teams of Century Surety, Evergreen National Indemnity and Continental Heritage shortly to discuss the individual business plans and overall direction for them in the near term.
The developing implications reflect the need for A.M. Best to analyze how the additional capital will be deployed in support of Century Surety’s business plans for 2004 and beyond.
In addition, the developing implications reflect A.M. Best’s need to meet with the management of Evergreen National Indemnity and Continental Heritage to discuss the direction of these companies following their separation from Century Surety.
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