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Argus under review by rating agency pending purchase

BF&M Insurance headquarters on Pitts Bay Road in Pembroke (File photograph)

News that a subsidiary of Argus Group Holdings Limited has agreed to acquire a significant stake in BF&M Limited in a deal valued at $100 million has prompted a major ratings agency to issue updates regarding both companies.

AM Best has placed under review with developing implications the financial strength rating of A- (Excellent) and the long-term issuer credit ratings of “a-” (Excellent) of Argus Insurance Company Limited and Bermuda Life Insurance Company Limited.

The latter company has entered into a share-purchase agreement with Lawrie (Bermuda) Limited, a wholly owned subsidiary of Camellia plc, to purchase Camellia’s 36.9 per cent shareholding in BF&M.

The deal would make the Argus subsidiary the largest shareholder in BF&M.

Both companies are subsidiaries of Argus Group Holdings Limited.

Concurrently, AM Best has placed under review with developing implications the long-term issuer credit rating of “bbb-” (Good) of Argus Group.

While the balance sheet strength assessment is expected to remain supportive of the ratings, the new equity investment, financed partially through a debt facility, is projected by AM Best to have a moderate impact on risk-adjusted capital.

Operating results at either Argus or BF&M between the signing of the share purchase agreement and the close of the transaction could impact this assessment.

The ratings will remain under review with developing implications pending regulatory approvals from the Bermuda Monetary Authority and purchase of shares by Argus. This is expected to occur late in the third quarter of 2023 or in early fourth quarter.

Meanwhile, the agency commented that the credit ratings of BF&M Limited and its insurance subsidiaries, BF&M Life Insurance Company Limited, BF&M General Insurance Company Limited and Island Heritage Insurance Company Ltd (Cayman Islands) remain unchanged.

AM Best expects BF&M to continue its normal course of business operations and financial position remaining unaffected by this share-purchase agreement.

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Published June 09, 2023 at 3:42 pm (Updated June 11, 2023 at 6:19 pm)

Argus under review by rating agency pending purchase

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