S&P raised its counterparty credit and financial strength ratings on Redland Insurance Co. to “AA-” to align it with the rating on Clarendon National Insurance Co., Redland’s parent and removed the company from CreditWatch negative. The outlook on Redland is stable.
The rating action followed Clarendon’s revision of its quota share reinsurance from 80 percent to 100 percent. Clarendon also agreed to “assume all outstanding loss, loss adjustment expense, and unearned premium reserves of Redland as of March 31,” according to an S&P credit analyst. For accounting purposes, the agreement has an effective date of Jan. 1, 2002. Clarendon contributed $10 million to Redland in 2001.
S&P views these actions as a positive reflection of the commitment of Clarendon National and its ultimate parent, Hannover Ruckversicherungs-AG (“AA”) to this operation. Redland is expected to continue to benefit from Clarendon’s expertise in the program business.
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