A.M. Best has placed the credit ratings of Spinnaker Insurance Company under review with developing implications after it was announced the company is to be acquired by InsurTech firm Hippo.
As we wrote recently, Hippo has entered into a definitive agreement to acquire Spinnaker as the InsurTech looks to expand its geographical footprint.
In light of the transaction, which is expected to close in Q3 2020, the ratings agency has placed under review with developing implications the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Spinnaker.
A.M. Best states that the status reflects the need for it to fully assess both the financial and operational impacts of the deal, including any potential benefits Spinnaker may receive as part of the larger, Hippo family of companies.
The global financial services ratings agency says that it will continue to hold discussions with the insurer’s management and monitor its balance sheet strength, as well as operating performance, business profile, and enterprise risk management.
Following the deal, Hippo Insurance will continue to operate as an MGA with some of its premiums to be underwritten by its affiliate Spinnaker. Operating independently under the Hippo umbrella, Spinnaker will maintain its position as a best-in-class program and fronting company.
Additionally, Spinnaker will continue to service a diverse portfolio of top-quality program administrators and drive the growth of its value-added program platform.
