AM Best Comments on Credit Ratings of Trean Insurance Group, Inc. Following Announced Merger Agreement

AM Best has commented that the Credit Ratings (ratings) of the members of Benchmark Insurance Group (BIG) and its ultimate parent, Trean Insurance Group, Inc. (Delaware) (Trean Insurance) [NASDAQ: TIG], remain unchanged following an announced merger agreement with affiliates of Altaris, LLC. (Altaris).

BIG is comprised of Benchmark Insurance Company (headquartered in Wayzata, MN), Benchmark Specialty Insurance Company (Little Rock, AR), American Liberty Insurance Company (Provo, UT) and 7710 Insurance Company (Summerton, SC).

Altaris currently owns approximately 47% of Trean’s outstanding common stock. Under the terms of the merger agreement, Altaris will acquire the remaining common stock of Trean for $6.15 in cash per share, representing a 97% premium to Trean’s closing price on Dec. 15, 2022, the last trading day prior to this announcement and a 133% premium to the 30-day volume-weighted average price per share of $2.64 as of Dec. 15, 2022.

The transaction is expected to be completed during the first half of 2023, pending government and regulatory approvals, as well as other customary closing conditions. Following completion of the transaction, Trean will become a privately held company and its common stock will no longer be traded on Nasdaq.

As a result of the proposed acquisition, AM Best anticipates that the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb” (Good) of Trean will be remain unchanged. Additionally, the Financial Strength Rating of A (Excellent) and Long-Term ICR of “a” (Excellent) of Benchmark Insurance Group members will also remain unchanged.

AM Best expects that BIG's risk-adjusted capital, financial leverage, operating performance and reserve adequacy measures will remain within acceptable ranges to support its current ratings. However, AM Best will further evaluate the ratings and outlooks as it contemplates the impact of business plan or strategy and potential dividend projections provided by Altaris management.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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