Clarendon Natl, Clarendon America Put on S&PWatch Pos.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 9/2/98-- Standard & Poor's today placed its single-`A'-minus financial strength and counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit ratings on Clarendon National Insurance Co. and Clarendon America Insurance Co. on CreditWatch with positive implications. Both companies are members of the Clarendon Insurance Group. Standard & Poor's also affirmed its double-'A'-plus financial strength and counterparty credit ratings on German reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. Hannover Ruckversicherungs AG (Hannover Re Hannover Re (FWB: HNRGn), in German Hannover Rückversicherung AG, with gross premium of around €9 billion in 2006, is one of the five largest reinsurance groups in the world. Its headquarters are in Hanover, Germany. ) and its related entities, E&S Ruckversicherungs AG and International Insurance Co. of Hannover Ltd. The outlook remains stable. The CreditWatch placement follows the Aug. 26, 1998 announcement by Hannover Re that it will acquire 100% ownership of Clarendon Insurance Group's parent, Lion Holding Inc. Standard & Poor's expects that a large portion of the transaction's purchase price will be funded by the issuance of hybrid equity so that Hannover Re's capitalization will not be reduced significantly. Clarendon Insurance Group provides high-risk insurance coverage through program business, which is offered either on a primary or excess of loss basis and reinsured predominately through 80%-90% quota-share contracts. Various lines of business are offered with risk concentrations being in the workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. , personal and commercial nonstandard non·stan·dard adj. 1. Varying from or not adhering to the standard: nonstandard lengths of board. 2. auto, plus accident and health lines. For 1997, Clarendon Insurance Group had more than $1.08 billion in gross premium writings on policyholder surplus of $207 million. In 1996, Lion Holding's management implemented an effective buyout of its Finnish parent, Kansa International Corp. Ltd. by acquiring a 56% ownership in Clarendon Insurance Group. Since 1991 Lion Holding management has removed Clarendon Insurance Group from volatile product lines while focusing its niche market A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. strategy around disciplined pricing and underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. guidelines. Hannover Re, combined with its related entities, is the fifth-ranked global reinsurer and has diversified its operations through the life and aviation sectors. Hannover Re is one of Clarendon Insurance Group's larger international reinsurers and also provides 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. through its U.S. subsidiary, Insurance Corp. of Hannover. Both Hannover Re and this subsidiary provide Hannover Re a familiarity with Clarendon Insurance Group's operations. Standard & Poor's believes that this transaction prospectively benefits Clarendon Insurance Group as it is integrated into a strong, global organization. Conversely con·verse 1 intr.v. con·versed, con·vers·ing, con·vers·es 1. To engage in a spoken exchange of thoughts, ideas, or feelings; talk. See Synonyms at speak. 2. , prospective expectations are that Clarendon Insurance Group's primary program writings through the alternative market sector will provide a diversified product offering and earnings stream to Hannover Re, Standard & Poor's said. -- CreditWire.
CONTACT: Frederick Loeloff, New York, 212/208-8904
Donald S. Watson, New York, 212/208-8446
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