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A.M. BEST COMPANY RATES CONTINUING COMMERCIAL OPERATIONS OF CRUM & FORSTER COMPANIES

 OLDWICK, N.J., Sept. 7 /PRNewswire/ -- Effective immediately, A.M. Best Company has affirmed the "A-" (Excellent) Best's Ratings of the continuing commercial operations of the Crum & Forster Insurance Companies. The ratings apply to 19 commercial property/casualty insurers, formerly led by the United States Fire Insurance Company.
 This rating action reflects C&F's successful completion of its business restructuring and recapitalization plans announced back in October of 1992, along with its satisfactory execution of anticipated balance sheet strengthening of its various companies that was essential to Best's affirmation.
 The rating action follows C&F's announcement made earlier today regarding the final regulatory approval for its legal restructuring of the companies' insurance operations into stand-alone operating groups. With these regulatory approvals, C&F has broken up its inter-company underwriting pool and has established five commercial insurance operating groups, supported by 19 dedicated legal entities, that align with five separate business units -- each with a distinct market focus. Consistent with Best's prior expectations, C&F's immediate parent, Xerox Financial Services, Inc., (XFS), is contributing additional capital to C&F to facilitate the restructuring. This capital support consists of $335 million of cash and contributed notes, as well as $1.0 billion of additional aggregate excess of loss reinsurance protection provided by a special purpose reinsurance affiliate, Ridge Reinsurance Limited, which indemnifies various C&F companies for adverse loss reserve development and uncollectible reinsurance recoverables.
 This last level of capital support, which was necessary for regulatory approval and Best's rating affirmation, brings total parental support, since C&F's initial restructuring announcement in October, 1992, to $535 million of cash and contributed notes and nearly $1.5 billion of aggregate excess of loss reinsurance protection provided by Ridge Re. Despite nearly $800 million of extraordinary reserves established in the fourth quarter of 1992, C&F has been able to preserve its consolidated surplus, increasing it from $1.6 billion at year-end 1992, to $1.8 billion pro forma year-end 1992, from capital gains and contributed capital from XFS.
 "We are satisfied that C&F, through substantial parental support, has taken the necessary actions to secure its financial strength and A- rating for each of its legal entities that will allow each of its business units an outstanding opportunity to pursue their market strategies unencumbered by loss reserve and reinsurance overhang that have depressed C&F's operating results for years", said John H. Snyder, senior vice president of the property/casualty division.
 The Viking Insurance Company, Madison, Wis., an affiliate specializing in non-standard personal auto insurance, and Constitution Reinsurance Corp., New York, N.Y., a professional reinsurer affiliate, were not affected by Best's rating action today. Currently their respective ratings are A- (Excellent) and A+ (Superior). Viking County Mutual Insurance Company, Austin, Texas, was also not affected by Best's rating action and retains its rating of A-(Excellent).
 -0- 9/7/93
 /CONTACT: Rhonda J. Ruch of A.M. Best Company, 908-439-2200, ext. 5684/


CO: Crum & Forster Companies ST: New Jersey IN: INS SU: RTG

TM -- NY061 -- 9461 09/07/93 16:11 EDT
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Publication:PR Newswire
Date:Sep 7, 1993
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