Gulf Insurance Group Under Review

June 24, 2002

A.M. Best Co. placed the financial strength rating of “A++” (Superior) of members of the Gulf Insurance Group, Hartford, Conn., under review with negative implications.

The rating action follows Gulf’s May 20 announcement that a private-equity fund, Trident II, L.P., will invest $125 million in convertible preferred stock and notes of Commercial Insurance Resources Inc., the parent of the Gulf companies. As a result of this transaction, five Gulf companies will be removed from the Travelers Property Casualty Pool, and the Gulf Pool will be re-established. The negative implications reflect this removal of Gulf from the Travelers Pool.

Prior to becoming part of the Travelers Pool in October 2001, the Gulf Pool was separately rated “A+” (Superior) by A.M. Best. Trident II,L.P. is a private-equity fund managed by MMC Capital, a subsidiary of Marsh & McLennan Cos.

The assignment of a new rating by A.M. Best will take into consideration Travelers’ continued majority ownership in Gulf, as well as its role and strategic importance to Travelers’ overall operations. Gulf continues to be recognized as one of the leading specialty writers of insurance, including management and professional liability, environmental liability, entertainment, excess and surplus lines, fidelity, surety and umbrella coverages.

The five Gulf companies that will be removed from the Travelers Pool and are affected by the under review action are Atlantic Insurance Co., Gulf Group Lloyds, Gulf Insurance Co., Gulf Underwriters Insurance Co. and Select Insurance Co. In addition, Gulf Insurance Co. U.K. Ltd., a member of the Gulf Group, is also affected.

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Insurance Journal Magazine June 24, 2002
June 24, 2002
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