A.M. Best Co. has placed the financial strength ratings of the insurance subsidiaries operating within Combined Specialty Group, Inc. (CSG) under review with negative implications.
The rating action follows Aon Corporation’s second quarter earnings announcement in which Aon announced its decision to withdraw its previous plans to spin-off CSG, which comprises the accident and health and property/ casualty underwriting operations of the organization. The rating action further signals the significant uncertainties surrounding the ultimate ownership of CSG, the adverse impact from one-time charges taken in the second quarter, weaker than expected profits from Aon’s underwriting operations and the potentially unfavorable resolution of financial reporting matters involving the SEC.
The ratings will remain under review as Aon evaluates its various options regarding the disposition of CSG. The financial strength ratings of the property/ casualty and life/health insurance companies currently reflect A.M. Best’s view of CSG assuming the proposed spin-off would occur. Despite the negative implications, A.M. Best believes that CSG’s core specialty accident/health and warranty operations remain fundamentally sound, and acknowledges the breadth and depth of its new management team.
A.M. Best’s indicative senior debt rating of “a-” on securities to be issued by CSG is also placed under review with negative implications and will move in tandem with the financial strength ratings of the group.
Was this article valuable?
Here are more articles you may enjoy.
Camp Mystic, Where Texas Floods Killed 28, Files Bankruptcy 
Viewpoint: Boom in Hyperscale Data Centers Puts Re/Insurers to the Test 
Florida’s Unemployment Rate Is Surging Even as High-Profile Companies Move In 
Endless Shrimp Deal Was Scheme to Squeeze Red Lobster, Suit Says 
