Mid-Hudson Co-Operative Insurance Acquisition Strengthens Market Position

AM Best has confirmed that the Financial Strength Rating of B+ (Good) and Long-Term Issuer Credit Rating of "bbb-" (Good) for Mid-Hudson Co-Operative Insurance Company remain steady after the firm entered into a securities purchase agreement with Hanover Fire Holdings, Inc. This strategic acquisition will see Mid-Hudson, a mutual property/casualty insurer based in Montgomery, NY, purchase Hanover Fire Holdings, enabling a significant expansion in coverage and geographic reach.

Expanding Horizons through Acquisition

Hanover Fire Holdings, known for its expertise in underwriting personal property insurance such as fire, liability, burglary, theft, allied lines, and homeowners insurance, will enhance Mid-Hudson's product offerings. This acquisition aims to diversify Mid-Hudson’s premium sources and improve pricing flexibility. With a purchase value of $7.5 million, comprising $4 million in cash and $3.5 million from a bank loan, AM Best views the resultant debt leverage as manageable within its regulatory compliance requirements.

Regulatory Approval and Future Outlook

Despite the anticipated increase in debt leverage, AM Best projects that Mid-Hudson's risk-adjusted capitalization will remain robust, aligned with the Best's Capital Adequacy Ratio (BCAR) standards, post-acquisition. The transaction is subject to regulatory approval from Pennsylvania and New York authorities, ensuring adherence to industry compliance standards. For more details on AM Best's rating process, visit their Recent Rating Activity page or their official website at www.ambest.com.

For inquiries, contact Kevin Dorsey, Senior Financial Analyst, or Joseph Burtone, Director, at AM Best. Media liaisons include Christopher Sharkey, Associate Director of Public Relations, and Al Slavin, Senior Public Relations Specialist.