Topa Insurance acquisition deal called off; rating agency reacts
US property and casualty (P&C) insurance carrier Topa Insurance Group (TIG) and Altamont Capital Partners "will not go forward" with their previously announced acquisition deal, the companies have confirmed.
The two companies signed a definitive agreement in July 2019 wherein Altamont would acquire TIG from Topa Equities, which would maintain a minority equity stake in the business following the closing.
Topa and Altamont have scrapped the deal by "mutual agreement", according to ratings agency AM Best.
Best has removed from under review with developing implications and affirmed the financial strength rating of A- of Topa and its subsidiary Dorchester Insurance Company.
The agency has assigned a negative outlook to its ratings, reflecting "challenges the group faces to improve operating results in the near term given the potential for further adverse reserve development in the commercial auto liability line and ongoing expense pressures as the group works to gain traction with operating efficiencies and increase in scale."
It noted that Topa has reported consistently negative underwriting results and low overall operating profitability over the past five years, and the group is expected to produce an additional underwriting loss in 2020.
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