A.M. Best Downgrades Rating of Gulf Insurance Group; Upgrades Rating of Travelers Casualty and Surety of Europe, Limited and Removes Both Ratings from Under Review.OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength rating to A- (Excellent) from A (Excellent) of Gulf Insurance Group (Gulf) (Hartford, CT). Additionally, A.M. Best has upgraded the financial strength rating to A+ (Superior) from A (Excellent) of Travelers Casualty and Surety of Europe, Limited (TC&S Europe) (Gloucester, England). Gulf and TC&S Europe are both units of The St. Paul St. Paul as a missionary he fearlessly confronts the “perils of waters, of robbers, in the city, in the wilderness.” [N.T.: II Cor. 11:26] See : Bravery Travelers Companies The Travelers Companies (NYSE: TRV) is the second largest underwriter of commercial property casualty and personal insurance in the United States. The company is headquartered in St. Paul, Minnesota and has major operations in Hartford, Connecticut. , Inc. (St. Paul Travelers) (NYSE NYSE See: New York Stock Exchange : STA) (St. Paul, MN). Both ratings have been removed from under review with developing implications and assigned stable rating outlooks. These rating actions contemplate the finalization Writing the table of contents (TOC) on a recordable CD or DVD disc. The finalization process ensures that the disc can be played back on most CD and DVD players. See disc-at-once. of an unlimited financial guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. provided by The Travelers Indemnity Company (Travelers Indemnity), the lead company of the Travelers Property Casualty Pool, to Gulf Insurance Company (Gulf Insurance), the lead company of Gulf. At the same time, an amendment to the Gulf inter-company pooling agreement is expected, eliminating Gulf Insurance's retrocession RETROCESSION, civil law. When the assignee of heritable rights conveys his rights back to the cedent, it is called a retrocession. Erskine, Prin. B. 3, t. 5, n. 1; Dict. do Jur. h.t. to other pool affiliates. In conjunction with this, all prior liabilities and obligations of Gulf's pooled affiliates will be ceded to Gulf Insurance and thereby will provide all existing policyholders of Gulf the benefits of the guaranty. The guaranty to be provided by Travelers Indemnity is designed to alleviate any potential business disruption and policyholder concerns while in the process of transitioning Gulf's business to other St. Paul Travelers' affiliates during the balance of 2004 and in 2005. In addition to the guaranty, Travelers Indemnity's intent is to continue to fully support the liabilities of Gulf, which is further corroborated cor·rob·o·rate tr.v. cor·rob·o·rat·ed, cor·rob·o·rat·ing, cor·rob·o·rates To strengthen or support with other evidence; make more certain. See Synonyms at confirm. by its recent buyout of outside preferred shareholders (Trident II L.P.) and an additional $50 million capital contribution that it provided Gulf Insurance on June 25, 2004. While recognizing the continued support provided by Travelers Indemnity, the downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. of Gulf's rating reflects the ancillary status of Gulf within the St. Paul Travelers organization, given its planned move of business to affiliates, its underwriting deterioration and increased earnings volatility over the past several years, as well as its diminished stand-alone capitalization. A.M. Best's view of Gulf's stand-alone capitalization acknowledges the potential for additional reserve strengthening and the credit risk associated with recoverables due from third party reinsurers, including those considered to be of low credit quality by A.M. Best. The upgrade of TC&S Europe's rating is based on the company's 100% quota share For This article is about quota shares (shares of the quota). For other usages of quota, see, see . A quota share is a specified number or percentage of the allotment as a whole (quota), that is prescribed to each individual entity (see Non-tariff barriers to trade). reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. agreement with Travelers Casualty and Surety of America, which currently has a financial strength rating of A+ (Superior) with a stable outlook. In addition, all prior year obligations of TC&S Europe were previously assumed by Gulf Insurance. Those assumed obligations of Gulf Insurance are expected to be covered by the guaranty provided by Travelers Indemnity. The financial strength rating has been downgraded to A- (Excellent) with a stable outlook for Gulf Insurance Group and its following subsidiaries: --Gulf Insurance Company --Gulf Underwriters Insurance Company --Select Insurance Company --Atlantic Insurance Company --Gulf Group Lloyds A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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