AM Best changes StarStone status on future business plan
AM Best has changed the under review status on the A- ratings of StarStone Specialty Insurance Company (SSIC) and StarStone National Insurance Company (SNIC) to developing from negative.
The move comes after the ratings agency received additional information regarding StarStone's business plan moving forward and reinsurance support provided by Enstar Group, the current majority shareholder.
The ratings were initially placed under review in June following the announcement of a re-capitalisation plan.
Going forward, Enstar will maintain a significant, but minority ownership position in the SSUS venture and continue to provide reinsurance support, while new investors will provide a material capital increase. The transaction is still subject to regulatory approvals and is expected to close by year-end 2020.
AB Best said that the under review status will be resolved post-close when it has completed its analysis of SNIC and SSIC to evaluate the impact of the planned transaction and change in strategic direction on these companies’ building block assessments.
A stable outlook could be assigned if the transaction closes under the conditions presented to AM Best. Negative rating actions could occur if the transaction is not successful or if there is a material change to the current business plan.
