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AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Universal North America Insurance CompanyAM Best has maintained the under review with negative implications status for the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of "bbb-" (Good) of Universal North America Insurance Company (UNAIC) (Arlington, TX). The Credit Ratings (ratings) were initially placed under review with negative implications on Oct. 11, 2023, following a significant loss of policyholder surplus as the result of weather events in 2023, which deteriorated UNAIC's balance sheet strength and operating performance metrics. This status has been maintained after UNAIC's ultimate parent, Universal Group, Inc., entered into a definitive agreement to sell its U.S. operations, including UNAIC's holding company and its subsidiaries. Prior to the close of the transaction, Universal Group, Inc. will contribute $17 million in capital to support the deterioration in policyholder surplus, pursuant to SSAP No 72. This transaction is subject to regulatory approval and is projected to increase surplus to approximately $54 million as of year-end 2023. Universal Group, Inc. will provide several transitional services for the initial six to 12 months after the sale. The ratings will remain under review until the transaction is approved by the regulator and AM Best can fully analyze the impact of the sale, including the buyer's capital management strategy, and financial and operational wherewithal. In the absence of an adequate plan that is supportive of the current assessment, the ratngs will likely be downgraded. 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.
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