AM Best has placed under review with developing implications the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of F&G Re.
The rating change comes after parent F&G and US title insurer Fidelity reached an agreement to sell F&G Re to Aspida Holdings, an indirect subsidiary of Ares Management.
F&G Re is the Bermuda domiciled reinsurance arm of F&G, with approximately $2 billion in invested assets as of the end of the second-quarter.
In connection with the transaction, AM Best notes that F&G and Aspida (via F&G Re) will enter into a flow reinsurance agreement with respect to F&G’s multi-year guaranteed annuity products on a coinsurance fund withheld basis.
The under review status partially reflects the fact that F&G Re is no longer strategically important to F&G.
AM Best says the ratings will remain under review with developing implications until the close of the transaction and a review by AM Best of the post-transaction details.
The transaction is expected to close in the fourth quarter of 2020, subject to customary closing conditions, including regulatory approval.
