AM Best Places Credit Ratings of Members of Lancer Insurance Group Under Review With Developing Implications Following Merger Announcement

AM Best has placed under review with developing implications the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of Lancer Indemnity Company (Long Beach, NY), Lancer Insurance Company (Chicago, IL) and Lancer Insurance Company of New Jersey (Ewing, NJ) (collectively referred to as the Lancer Insurance Group).

This Credit Rating (rating) action follows the recent announcement that Lancer Insurance Group will combine with Core Specialty Insurance Holdings, Inc. (Core Specialty) through a cash and stock deal, structured as a merger. Core Specialty’s subsidiaries include StarStone Specialty Insurance Company and StarStone National Insurance Company (both domiciled in Wilmington, DE).

While Lancer Indemnity Company is a member of the Lancer Insurance Group, it is not being sold and is not part of the merger agreement. Post close, Lancer Indemnity Company will no longer be part of the group or reinsured by Lancer Insurance Company, from which its rating was derived. Separately, AM Best will assign a stand-alone rating to Lancer Indemnity Company once the merger is complete.

The merger was unanimously approved by both companies’ Board of Directors and is expected to complete during the third quarter of 2021, subject to customary regulatory approvals. The under review with developing implications status reflects the potential execution risks associated with the two group’s merging, the need for AM Best to fully assess the financial and operational impacts of the merger, its impact on Lancer Indemnity Company as a separately rated stand-alone entity and the potential synergies recognized from this transaction.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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