A.M. Best Places Ratings of Global Liberty Insurance Company of New York under Review with Negative Implications

OLDWICK, N.J.--(BUSINESS WIRE)--

A.M. Best has placed under review with negative implications the financial strength rating of B+ (Good) and the issuer credit rating of “bbb-“ of Global Liberty Insurance Company of New York (Global) (Melville, NY).

The rating actions follow the recent announcement that Atlas Financial Holdings, Inc. (Atlas) [NASDAQ:AFH] has entered into a definitive agreement to acquire Global along with its affiliated underwriting and premium finance companies for approximately $25 million.

The under review with negative implications status reflects Global's underwriting and operating losses in 2013, in part due to adverse loss reserve development, a current lower level of risk-adjusted capitalization, largely driven by high underwriting leverage, above average growth and a decline in surplus in 2013, in combination with the lower rating of Atlas' core property/casualty operations. The ratings will remain under review pending the close of the transaction and discussion with management regarding the impact the transaction will have on Global and Atlas' current operating companies. The transaction is expected to close in the first quarter of 2015, subject to customary closing conditions, including regulatory approval of the change in control of Global.

This transaction is expected to significantly accelerate Atlas' commercial automobile presence in select sub-segments of the large New York livery market, and will add valuable infrastructure on the East Coast to support Atlas' continuing growth. A.M. Best anticipates that Global will not become a member of Atlas' existing reinsurance pooling agreement, and that Atlas will maintain Global's local infrastructure, which will serve as an East Coast regional office of Atlas.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Rating Members of Insurance Groups
• Risk Management and the Rating Process for Insurance Companies
• Understanding BCAR for Property/Casualty Insurers
• Catastrophe Analysis in A.M. Best Ratings
• Insurance Holding Company and Debt Ratings

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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