AM Best Comments on Credit Ratings of Skyward Specialty Insurance Group Members Following Acquisition of Apollo Group Holdings Inc.

AM Best has commented on the credit ratings of Skyward Specialty Insurance Group members, including Great Midwest Insurance Company, Houston Specialty Insurance Company, Oklahoma Specialty Insurance Company, and Imperium Insurance Company. The ratings are unchanged following the announcement of the acquisition of Apollo Group Holdings for $555 million. Skyward's balance sheet strength is assessed as very strong, and its operating performance, business profile, and risk management are deemed adequate. The transaction is expected to close in Q1 2026, subject to regulatory approvals.

AM Best has confirmed that the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” (Excellent) for Great Midwest Insurance Company (GMIC), Houston Specialty Insurance Company (HSIC), Oklahoma Specialty Insurance Company (OSIC), and Imperium Insurance Company (IIC) remain unchanged following the announcement of Skyward Specialty Insurance Group's acquisition of Apollo Group Holdings Limited (Apollo) for $555 million [1].

The acquisition, which is expected to close in the first quarter of 2026 subject to regulatory approvals, involves Skyward Specialty Insurance Group, Inc. (Skyward Group) acquiring 100% of Apollo Group Holdings Limited from Alchemy, management, employees, and other strategic investors. Skyward Group is the ultimate parent of Skyward Specialty Insurance Group, which maintains a position as a leading writer in U.S. specialty markets. Apollo is a leading U.S. centric specialty underwriting platform operating at Lloyd’s of London and will join Skyward Specialty, with its management team continuing to lead the Apollo business [1].

AM Best assesses Skyward’s balance sheet strength as very strong, with adequate operating performance, a neutral business profile, and appropriate enterprise risk management. The transaction is not expected to materially change Skyward’s current rating fundamentals. However, there is an immediate increase in financial leverage to slightly over 25%, which Skyward expects to manage over time, along with execution risk associated with significant acquisitions. Skyward plans to maintain strong interest coverage without taking dividends from the insurance subsidiaries in the near to medium term [1].

Apollo will provide Skyward with a stream of unregulated earnings and cash flow, reducing its reliance on statutory entities. AM Best will continue to monitor the transaction’s progress and the effects on Skyward’s business profile, including the planned synergies and efficiencies [1].

References:
[1] https://finance.yahoo.com/news/am-best-comments-credit-ratings-180400978.html