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Fitch puts Atlantic Mutual on negative watch
Fitch Ratings said it placed the BBB- insurance ratings of the other Atlantic Mutual Cos. and the BB- surplus note rating of Atlantic Mutual Insurance Co. on Rating Watch negative and place the BBB- insurer financial strength rating of Atlantic Specialty Insurance Co. on Rating Watch positive.
Fitch said the rating actions follow announcements that Atlantic Mutual will sell the renewal rights to its commercial business to OneBeacon Insurance Co. As part of the transaction, OneBeacon will acquire the unearned premium on the acquired book of business and ASIC.
The Rating Watch Positive on ASIC reflects its acquisition by a higher-rated entity, OneBeacon, whose insurer financial strength is rated A by Fitch.
The Rating Watch negative on the other Atlantic Mutual ratings recognizes that with this sale, and an earlier sale of Atlantic Mutual's marine book of business, Atlantic Mutual has now disposed of 65% to 75% of its premium base.
Going forward, Fitch said it believes that Atlantic Mutual's ability to achieve expense reductions commensurate with these premium reductions will be critical. Equally critical will be Atlantic Mutual's ability to retain and grow its remaining personal lines business.
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