AM Best Downgrades and Withdraws Credit Ratings of Trusted Resource Underwriters Exchange

AM Best has downgraded the Financial Strength Rating to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Rating to “bbb+” (Good) from “a-” (Excellent) of Trusted Resource Underwriters Exchange (TRUE) (St. Petersburg, FL). Concurrently, AM Best has maintained the under review status for these Credit Ratings (ratings) and revised the implications status to developing from negative. At the same time, AM Best has withdrawn these ratings as the company has requested to no longer participate in AM Best’s interactive rating process.

The ratings reflect TRUE’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The rating downgrades reflect the significant changes in ownership and overall business strategy following the Jan. 2, 2024, announcement that American Family Insurance Group (American Family) and Gallatin Point Capital (Gallatin Point) closed on a transaction under which Gallatin Point will acquire a majority stake in the attorney-in-fact for TRUE. The transaction closed Dec. 31, 2023.

The prior ratings considered financial and operational support provided by American Family, which was shown by its commitment of capital to TRUE through surplus notes and supporting select day-to-day services. Although American Family remains a minority owner, it has sold 90% of its interest in TRUE, and TRUE no longer receives the benefit of American Family’s support through rating lift.

The under review with developing implications status reflects the lack of information around the new business plan for TRUE. While Gallatin Point committed to invest up to $1.25 billion into TRUE to expand its footprint nationally, the timing and volume of contributions will be tied to TRUE’s strategy and growth targets, which have not been shared with AM Best.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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