Moody’s could lower Assurant

Moody's Investors Service said it placed the Baa2 senior unsecured debt rating of Assurant Inc., the A2 insurance financial strength ratings of Assurant's property and casualty insurance operating subsidiaries and the A3 insurance financial strength ratings of Assurant's life insurance subsidiaries on review for downgrade.

The actions follow the Oct. 18 announcement that Assurant and Warranty Group (unrated) entered into a definitive agreement to combine operations in a transaction valued at $2.5 billion including Warranty’s existing debt. Assurant will become a wholly owned subsidiary of TWG Holdings Ltd., whose name will be changed to Assurant Ltd.

Moody's said the review reflects its view that the acquisition would meaningfully increase the company's financial leverage, significantly increase goodwill and intangibles; and carries integration and execution risks given the combination of two relatively complex organizations. The review will focus on Assurant's prospective profitability, operational flexibility and capital adequacy.

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