A.M. Best Places Credit Ratings of GBG Insurance Limited Under Review With Positive Implications

A.M. Best has placed under review with positive implications the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” of GBG Insurance Limited (Guernsey). GBG Insurance Limited is a wholly owned subsidiary of GBGI Limited (GBGI), its non-operating holding company, which consolidates the GBG group (GBG).

The Credit Rating (rating) actions follow the announcement on 5 November 2018, that Elm Bidco, L.P. (Bidco) and the board of GBGI reached agreement on the terms of a recommended all-cash offer, to be made by Bidco for the entire share capital of GBGI. Bidco is a Cayman Island exempted limited partnership that is controlled by affiliates of Further Global Capital Management, L.P., a private equity firm that invests in the financial services industry.

The under review with positive implications status reflects A.M. Best’s opinion that, based on information currently available, there is a reasonable likelihood that GBG’s ratings will be raised following the acquisition. In particular, this reflects Bidco’s intention to make a capital injection into GBG of USD 10 million shortly after the close of the transaction in order to improve GBG’s risk-adjusted capitalisation and support its prospective business plans. In addition, following the announcement of the offer by Bidco, a new designated chief executive officer with substantial expertise in the life/health insurance sector, was appointed. Over time, A.M. Best believes that there is potential for GBG’s enterprise risk management framework to strengthen under the new leadership.

The ratings will remain under review pending the completion of the transaction and A.M. Best’s assessment of the impact of the planned change in ownership on GBG’s rating fundamentals.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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