AM Best has commented that the Credit Ratings (ratings) of New York Marine and General Insurance Company (New York, NY) and its wholly owned subsidiaries, Gotham Insurance Company (New York, NY) and Southwest Marine and General Insurance Company (Scottsdale, AZ) (collectively referred to as ProSight Specialty Group) remain unchanged following the announcement that TowerBrook Capital Partners L.P. (TowerBrook) and Further Global Capital Management L.P. (Further Global) have entered a definitive merger agreement under which their affiliates will acquire 100% of the common stock of ProSight Global, Inc. (ProSight Global) (Delaware), which is majority owned by affiliated entities of The Goldman Sachs Group, Inc. and TPG Global, LLC. The transaction is subject to customary closing conditions, including regulatory approvals. In addition, the rating of ProSight Global remains unchanged. The outlook of the ratings remains stable.
As a result of the above transaction, ProSight Global will become a private company. The cost of the transaction is estimated at approximately $586 million. TowerBrook will acquire a majority of ProSight Global and Further Global will hold a minority stake in the company. AM Best anticipates that the transaction will close in the third quarter of 2021 subject to customary closing conditions, including regulatory approvals, as well as ProSight Global entering into an adverse development cover (ADC)/loss portfolio transfer (LPT) agreement with a wholly owned subsidiary of Enstar Group Limited on the majority of its existing reserves.
The aforementioned reinsurance will comprise a ground up loss portfolio transfer of ProSight’s discontinued workers’ compensation and excess workers’ compensation lines of business and an adverse development cover on ProSight’s diversified mix of general liability classes of business. In the transaction, ProSight will cede net loss reserves of approximately $500 million and Enstar’s subsidiary will provide additional aggregate limit of $250 million. Based on the ADC/LPT agreement, AM Best anticipates that the transaction will initially reduce ProSight Specialty Group’s underwriting leverage.
AM Best plans additional discussions with company management over the near term to discuss further details of the proposed transaction as they become available and will provide further commentary as deemed appropriate.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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Robert Valenta, CPCU
Senior Financial Analyst
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Raymond Thomson, CPCU, ARe, ARM
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Manager, Public Relations
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