AM Best Comments on Credit Ratings of Randall & Quilter America Holdings Inc.’s Members Following Sale Update

AM Best has commented that the under review with developing implications status for the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) of Accredited Specialty Insurance Company (ASI) (Gilbert, AZ), Accredited Surety and Casualty Company, Inc. (ASC) (Orlando, FL) and Accredited Insurance (Europe) Limited (AIEL) (Malta), collectively known as Accredited, remains unchanged following a recent update on their pending sale.

On June 13, 2024, Randall & Quilter Insurance Holdings Ltd., (R&Q), provided an update on its proposed sale of Accredited to funds advised by Onex Corporation (Onex). R&Q stated that Onex had provided R&Q with an alternative transaction structure to the original sale that would be implemented if the closing conditions of the original sale could not be met. The alternative would involve the parent company, R&Q, filing for a provisional liquidation in Bermuda and then completing the sale of Accredited through that process. This follows R&Q incurring significant additional unexpected costs and expenses, in addition to the company being constrained in its ability to consummate external legacy transactions. These factors, as well as further adverse reserve development, have had a material negative impact on the company’s stability as a business and as a going concern. The R&Q board is exploring available options, including the alternative proposal and potential sources of liquidity while trying to complete the original sale. AM Best notes that the alternative structure appears to be incrementally credit-positive for Accredited, relative to the original proposal.

AM Best placed the ratings under review with developing implications on Oct. 22, 2023, when R&Q entered into a conditional agreement to sell 100% of its equity interest in Randall & Quilter America Holdings Inc., the intermediate holding company of Accredited, to funds advised by the Onex.

The ratings are expected to remain under review until the sale process is complete, which is expected to be end of the second quarter for 2024 or shortly thereafter, at which point AM Best will assess the quality and extent of support provided by Onex to Accredited and resolve the ratings review.

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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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