Large Japanese property and casualty insurance group, Tokio Marine Holdings, Inc., has completed its previously announced acquisition of Privilege Underwriters, Inc. and its subsidiaries (Pure Group).
It was announced in October of last year that Tokio Marine was set to acquire the US high net worth insurance specialist for $3.1 billion.
Now, through its wholly owned subsidiary, HCC Insurance Holdings, Inc. (TMHCC), and following the satisfaction of all conditions of the acquisition including approval from all relevant authorities, the Japanese insurer has completed its takeover of Pure Group.
Tokio Marine states that the financial results of Pure Group will be consolidated into its financial statements from the first-quarter of fiscal year 2020 onwards.
In light of the completion of the deal, analysts at S&P Global Ratings have revealed that the ratings agency has maintained its ‘A-‘ issuer credit rating on TMHCC and maintained the CreditWatch with negative implications.
Furthermore, S&P has lowered its financial strength and issuer credit ratings on TMHCC’s core and guaranteed operating firms to ‘A+’ from ‘AA-‘, while the outlook for the operating subsidiaries is positive.
According to S&P, the downgrade of the operating subsidiaries relates to their greater interworking with its parent, leading the ratings agency to revise its view of both its importance to the group and level of independence from the parent. S&P adds that now, it assesses the subsidiaries as core to the Tokio Marine group, and have equalised its ratings with those on the parent.
S&P adds that its positive outlook on TMHCC’s subsidiaries reflects that on Tokio Marine’s core subsidiaries, with any future changes in ratings moving in tandem with those on Tokio Marine’s core insurance units.
