For example, based on the agreement in principle for the acquisition of Safeco by Liberty Mutual, A.M. Best Co. has placed Safeco and it’s members’ issuer credit ratings (ICRs) of A+ under review with negative implications. The ratings organization also has placed the ICR of BBB+ and debt ratings of BBB+ of Safeco Corp under review with negative implications. Safeco’s financial strength rating of A (Excellent) with a positive outlook currently remains unchanged.
The positive outlook on Safeco’s financial strength rating is expected to be revised to stable following the close of the transaction.
Fitch Ratings also placed Liberty Mutual on “ratings watch negative” following the Safeco announcement, saying “industry-wide softening premium rates will likely place additional strain on (Liberty Mutual Group) to successfully integrate its recent acquisitions while retaining recent run-rate profitability.”