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 30 th 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.