SOUTHFIELD, Mich., Aug. 5, 2013 /PRNewswire/ -- Meadowbrook Insurance Group, Inc. (NYSE: MIG) today announced that it has entered into an agreement which will provide the Company the use of an "A" rated policy issuance company for a portion of its business. The agreement, which is effective immediately, is with State National Insurance Company, with which Meadowbrook has had a long and mutually beneficial relationship.
Robert S. Cubbin, Meadowbrook President and Chief Executive Officer, commented: "Following A.M. Best's decision on Friday to downgrade our financial strength rating to "B++" (good, with a stable outlook), we immediately completed an assessment of all our programs and specialty divisions to determine where an "A" rated policy issuer is required.
"Over the weekend, we had substantive discussions with a number of our insurance and reinsurance company partners, regarding the need for an "A" rated policy issuer to support a portion of our business. We were able to reach an agreement with State National to meet our immediate needs. We are grateful to the State National team for working through the weekend with us to put this agreement in place and to implement a solution so quickly.
"I want to personally assure our agency partners, policyholders and shareholders, that despite the challenges we encounter, Meadowbrook is committed to providing secure, quality insurance products. We have taken steps to enhance our capital and we now have nearly $500 million in statutory surplus.
"After we evaluate the portion of our business for which we will selectively utilize State National policy issuing companies, examine expense reduction initiatives and quantify the impact on our expectations for the second half of 2013 and 2014, we will provide an update on earnings guidance. Our current expectation is that the changes in circumstances since our earnings release on Tuesday July 30th will modestly lower our previously disclosed earnings guidance for the Third and Fourth quarters of 2013."
As indicated in the previous press release, Meadowbrook has retained Willis Capital Markets to assist the Company in exploring all of its strategic alternatives.
About Meadowbrook Insurance Group
Meadowbrook Insurance Group, Inc., based in Southfield, Michigan, is a leader in the specialty program management market. Meadowbrook includes several agencies, claims and loss prevention facilities, self-insured management organizations and six property and casualty insurance underwriting companies. Meadowbrook has twenty-eight locations in the United States. Meadowbrook is a risk management organization, specializing in specialty risk management solutions for agents, professional and trade associations, and small to medium-sized insureds. Meadowbrook Insurance Group, Inc. common shares are listed on the New York Stock Exchange under the symbol "MIG". For further information, please visit Meadowbrook's corporate web site at http://www.meadowbrook.com.
Certain statements made by Meadowbrook Insurance Group, Inc. in this release may constitute forward-looking statements including, but not limited to, those statements that include the words "believes," "expects," "anticipates," "estimates," or similar expressions. Please refer to the Company's most recent 10-K, 10-Q, and other filings with the Securities and Exchange Commission for more information on risk factors.
Actual results could differ materially. These forward-looking statements involve risks and uncertainties including, but not limited to the following: ; actions taken by regulators, rating agencies or lenders, including the impact of the downgrade by A.M. Best of the company's and its subsidiaries' financial strength rating; efforts to make arrangements with an A rated insurance company and with regard to the review of strategic alternatives; premium volume and operating leverage, the frequency and severity of claims; uncertainties inherent in reserve estimates;; catastrophic events; a change in the demand for, pricing of, availability or collectability of reinsurance; increased rate pressure on premiums and on underwriting criteria; ability to obtain rate increases in current market conditions; investment rate of return and losses (whether realized or unrealized) in the Company's investment portfolio; changes in and adherence to insurance or other regulation; attainment of certain processing efficiencies; changing rates of inflation; impairment of intangibles; general economic conditions; the Company's possible ability to implement its capital raising and capital preservation strategies in a timely manner; and other risks identified in the Company's reports filed with the Securities and Exchange Commission, any of which may have a material and adverse effect on the Company's results of operations and financial condition. Meadowbrook is not under any obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
SOURCE Meadowbrook Insurance Group, Inc.