AXA swoops in to buy XL Group
Rating agency AM Best has placed under review with developing implications the financial strength rating (FSR) of A (Excellent) and the long-term issuer credit ratings (long-term ICR) of “a+” of the property/casualty subsidiaries of XL Group.
In addition AM Best has placed under review with developing implications the long-term ICR of “bbb+” of XLIT, (Cayman Islands) and the Long-Term Issue Credit Rating (Long-Term IR) of the preference share issues of Catlin Insurance Company (Bermuda). AM Best also has placed under review with developing implications the long-term ICR of “bbb+” of XL.
AM Best said that it has also has placed under review with developing implications the FSR of B++ (Good) and the long-term ICR of “bbb+” of XL Life (Bermuda), the FSR of A (Excellent) and the Long-Term ICR of “a+” of Lloyd’s Syndicate 2003 (United Kingdom), and the FSR of A- (Excellent) and the Long-Term ICR of “a-” of T.H.E. Insurance Company (New Orleans, LA).
The rating agency said that these rating actions follow the announcement of an agreement to purchase XL by AXA Group on March 5, 2018, for $15.3 billion. This transaction is expected to close in the second half of 2018, subject to approval by XL shareholders and other customary closing conditions, including the receipt of required regulatory approvals, and is expected to be financed as an all cash deal. The ratings will remain under review until the deal closes, and AM Best completes its evaluation of organisational changes and XL’s strategic position within the new structure.
A positive rating outcome could occur depending on the levels of implicit and explicit support provided to XL and its subsidiaries after the close of the transaction. However, if the transaction is unsuccessful there could be negative rating pressure on XL if operational issues emerge. The under review status may be updated in the interim period if new facts and circumstances present themselves.
AM Best said that the FSR of A (Excellent) and Long-Term ICRs of “a+” have been placed under review with developing implications for the following subsidiaries of XL Group: XL Bermuda, Catlin Indemnity Company, Catlin Insurance Company (UK), Catlin Insurance Company, Catlin Insurance Company, Catlin Re Switzerland, Catlin Specialty Insurance Company, Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, XL Insurance Company SE, XL Insurance Company of New York, XL Insurance Switzerland, XL Re Europe SE, XL Reinsurance America, XL Seguros México, S.A. de C.V., XL Select Insurance Company and XL Specialty Insurance Company.
XL Group, subsidiaries, AM Best, FSR, ratings, AXA, M&A