A.M. Best Co. has commented that the financial strength rating (FSR) of A (Excellent) and issuer credit rating (ICR) of “a+” of National Interstate Group (the group) (Richfield, OH) and its members and the ICR of “bbb+” of the group's publicly traded parent, National Interstate Corporation (National Interstate) (Richfield, OH) [NASDAQ: NATL] are unchanged. The outlook for these ratings is stable. (See below for a detailed listing of the companies.)

This commentary follows the recent announcement that the lead property/casualty insurance company of the group, National Interstate Insurance Company (NIIC), has entered into a definitive agreement to acquire Vanliner Group, Inc., and its wholly-owned property/casualty subsidiary, Vanliner Insurance Company (Vanliner) from UniGroup, Inc. The transaction is expected to close by the end of second quarter 2010 pending customary closing conditions and regulatory approvals.

Under the terms of the agreement National Interstate will pay approximately $125 - $135 million in cash, which represents Vanliner’s tangible book value at closing. As part of the definitive agreement, UniGroup, Inc. has agreed to provide National Interstate with comprehensive financial guarantees related to the run-off of Vanliner’s balance sheet following the close, whereby guaranteeing both favorable and unfavorable balance sheet development inures to UniGroup, Inc.

Vanliner is primarily a provider of insurance solutions to the moving and storage industry, which compliments National Interstate’s niche orientation and focus on the transportation industry. Subsequent to the planned acquisition, Vanliner is expected to be reinsured by NIIC and become a member of the group. The group maintains more than adequate risk-adjusted capital for its current ratings to fund the proposed transaction and the group is expected to maintain solid risk-adjusted capitalization post closing.

The FSR of A (Excellent) and ICRs of “a+” are unchanged for National Interstate Group and its following members:
  • National Interstate Insurance Company
  • National Interstate Insurance Company of Hawaii, Inc.
  • Triumphe Casualty Company

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

Copyright Business Wire 2010

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX