News

Primarily as a result of reserve strengthening, A.M. Best announced late yesterday that it will lower the rating for Tower Insurance Group companies from an A- u to a B++ u. The A.M. Best press release indicated the rating is under review with negative implications. 

In a letter to business partners, the company president, Michael H. Lee stated, “As you know, our second quarter earnings release was delayed on August 8 in order for us to perform a comprehensive review of our reserves. This review process, related to our reserves and other items on our financial statement such as goodwill, has taken us longer than we expected due to its complexity. On Monday, we announced the results of this comprehensive review of the Company's loss reserves, which will require us to strengthen our reserves by approximately $365 million. Attached is the press release, which provides additional information. We also announced that we expect to report a non-cash goodwill impairment charge of approximately $215 million due to this reserve strengthening. Our shareholder’s equity, which was $1.2B as of March 31, 2013, will decrease as a result of these charges.”

Tuscano will continue to monitor the financial strength of our companies as we are sure you do as well.