Ratings analysts at AM Best see the pending acquisition of Safety Insurance Group by Mapfre as “strategically compelling” as the carriers have complementary geographic and product profiles.
Last week Safety, a property/casualty insurer in Massachusetts and New England, announced it has agreed to be acquired by Spain’s Mapfre S.A. in an all-cash transaction valued at approximately $1.54 billion.
AM Best said its ratings for Mapfre operating subsidiaries remain unchanged following the announcement.
Mapfre’s rated operating subsidiaries have a Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Rating of “a+” (Excellent). The outlook of these ratings is stable. The ratings reflect Mapfre’s balance sheet strength, which AM Best said it assesses as very strong, as well as its “strong” operating performance, “favorable” business profile and “appropriate” enterprise risk management.
“The transaction is strategically compelling as both companies share a similar footprint and product offering. Furthermore, it will enable Mapfre to further consolidate its strong position in Massachusetts and expand into New England,” AM Best said in a release.
AM Best said Mapfre has a “successful track record” of acquiring companies. This transaction will help expand its footprint within the Northeast as Safety’s book complements Mapfre’s existing portfolio within Massachusetts.
At the same time, AM Best placed Safety Group’s ratings “under review with developing implications” following the announcement of the merger agreement.
Safety has a leading market position in Massachusetts and a presence in several states in the Northeast. The plan calls for Safety to merge with a Mapfre subsidiary and become the surviving entity
AM Best said the “developing implications” reflect the need for further analysis as details of the strategic plan and integration of Safety into Mapfre are established. “Operational synergies are expected considering the overlap of the geographic footprint and lines of business,” AM Best added.
The ratings agency said Safety Group’s ratings will remain under review with developing implications pending customary approvals and AM Best’s evaluation of the integration and future business plans.
The acquisition is subject to regulatory approvals and is expected to be completed at the end of first-quarter 2027.