GeoVera ratings placed under review pending restructure

Transactions expected to close in Q4 2024

GeoVera ratings placed under review pending restructure


By Kenneth Araullo

Credit ratings for the members of the GeoVera Insurance Group have been placed under review by AM Best pending the results of upcoming major transactions.

The FSR and Long-Term ICR for these entities, both rated as ‘A’ (Excellent), are now flagged with developing implications. The decision impacts several members within the group, including Coastal Select Insurance Company, GeoVera Insurance Company, GeoVera Reinsurance, Ltd., and GeoVera Specialty Insurance Company, all underpinned by an intercompany reinsurance agreement.

The review follows the April 9 announcement from GeoVera Insurance Holdings detailing a definitive agreement to restructure its operations. This includes selling its managing general agent (MGA) business to SageSure and its insurance carriers to GeoVera Nova Holdings, a newly established holding company.

Additionally, GeoVera Nova will acquire SafePort Insurance Company, a producer for SageSure. These transactions, which are still pending regulatory approval and other standard closing conditions, are projected to be finalized in the fourth quarter of 2024.

AM Best stated that the ratings will continue to be under review until the completion of these transactions and the subsequent full evaluation of the new operational structure.

The strategic realignment within GeoVera and its associated entities, AM Best noted, underscores a significant shift in the company’s structure and market strategy, pending the successful conclusion of the sales and regulatory green lights. The outcomes of these changes are expected to influence the future operational and financial stability of the involved companies.

Elsewhere for SageSure, the P&C MGA also announced the successful closure of the Gateway Re 2024-2 catastrophe bond, valued at $130 million, and finalized with pricing 75 basis points tighter than the initial midpoint price guidance.

The bond is SageSure’s second this year, following the closure of the Gateway Re 2024-1 catastrophe bond in March, which achieved a closure at $250 million, 67% above the midpoint of its initially targeted range of $100 million to $200 million.

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