Ceres (NASDAQ:CERG)
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From Jun 2019 to Jun 2024
A.M. Best Co. has placed the financial strength rating
of B+ (Very Good) and the issuer credit ratings (ICR) of "bbb-" of
Ceres Group Inc.'s (Ceres) (Cleveland, OH) (NASDAQ: CERG) primary
life/health subsidiaries, Continental General Insurance Company
(Omaha, NE) and Central Reserve Life Insurance Company (Cleveland, OH)
under review with positive implications. A.M. Best has also placed the
ICR of "bb-" of Ceres under review with positive implications. These
rating actions follow Great American Financial Resources, Inc.'s
(GAFRI) (Cincinnati, OH) (NYSE: GFR) announcement that it has signed a
definitive merger agreement to acquire all of the outstanding shares
of Ceres for approximately $205 million in cash. GAFRI's ratings are
unchanged by these actions.
Ceres markets an array of health and life insurance products
through two primary business segments, senior and medical. The senior
segment includes Medicare supplement, life, long-term care and
annuities, while the medical segment includes major medical health
insurance for individuals, families, associations and small to
mid-size businesses. The proposed acquisition will nearly double
GAFRI's book of senior premium income and provides distribution
opportunities across all product lines. In addition, the transaction
expands its presence in the Medicare supplement market, propelling
GAFRI to a top-ten ranking based on Medicare supplement premiums.
A.M. Best views the transaction as an effective way for GAFRI to
utilize excess capital from the recently announced sale of Chatham
Bars Inn and the actual sale of its subsidiary in Puerto Rico. GAFRI's
gross investment in Ceres will be partially offset through reinsurance
arrangements with Hannover Life Re. In addition, Ceres' medical
segment is not consistent with GAFRI's core operations, and A.M. Best
expects GAFRI to address this in the near term. The transaction is
expected to close by the end of 2006, pending regulatory approval.
For Best's Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.
For current Best's Ratings, independent data and analysis on more
than 1,100 individual life/health companies and A.M. Best groups,
please visit www.ambest.com/lh.
A.M. Best Co., established in 1899, is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit A.M. Best's Web site at www.ambest.com.