US fronting Transverse upgraded post $400m+ MS&AD deal

AM Best has upgraded  Transverse Insurance Group’s financial strength rating and outlook following the  $400 million acquisition of the US hybrid fronting carrier by  Mitsui Sumitomo Insurance (MSI).

MS&AD Insurance Group Holdings, through its Mitsui Sumitomo Insurance arm, acquired Transverse from Virgo Investment Group in a deal valuing slightly over $400 million (approximately ¥54.2 billion). The transaction, first announced in August 2022, completed earlier this year.

AM Best has removed under review with positive implications and upgraded the financial strength rating to A from A- of Transverse Specialty Insurance Company (Wilmington, DE), Transverse Insurance Company (Dallas, TX) and TRM Specialty Insurance Company (Indianapolis, IN). These companies are collectively referred to as the Transverse Insurance Group. The outlook assigned to these credit ratings is stable.

The ratings reflect Transverse’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The rating action also considers the level of integration between Transverse and MSI and various agreements in place between the companies, AM Best noted.

Warren, New Jersey-based Transverse is a non-life insurer that delegates certain functions and authorities to MGAs and transfers risks underwritten by MGAs to reinsurers on an admitted or excess and surplus (E&S) lines basis.

Through its licenses in all 50 states in the US and network with various MGAs, Transverse serves as a platform for MSI to expand in the North American MGA market.

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