New St. Paul Travelers Pool Upgraded
Insurance ratings standard-bearer A.M. Best Co. assigned a financial strength rating of “A+” (superior) and an issuer credit rating of “aa-” to the members of the newly formed pool, St. Paul Travelers Insurance. Cos., headquartered in St. Paul, Minn.
This rating action follows the St. Paul Travelers Cos. Inc.’s announcement that it has combined the St. Paul and Travelers pools, forming a new pool effective July 1, 2005, retroactive to Jan. 1, 2005. The company also announced it has merged Gulf Insurance Co.–the lead company of the former Gulf Insurance Group–with and into Travelers Indemnity Co., the lead company of the new pool, effective July 1, 2005. The 28 participants in the new pool, 17 reinsured affiliates and Travelers Casualty and Surety of America constitute the 46 members of Best’s new rating unit, St. Paul Travelers Cos.
As a result of the new pooling agreement, Best upgraded the financial strength ratings to “A+” (superior) from “A” (excellent) and the issuer credit ratings to “aa-” from “a” of the 18 members of the former St. Paul Cos. Best also affirmed the financial strength ratings of “A+” (superior) and issuer credit ratings of “aa-” of the 24 members of the former Travelers Property Casualty Pool. The agency also upgraded the financial strength ratings to “A+” (superior) from “A-” (excellent) and issuer credit ratings to “aa-” from “a-” of four members of the former Gulf.
Best said the upgraded ratings of the members of the former St. Paul and Gulf groups reflect their combining with the larger, higher-rated and more strongly capitalized group of companies, the former Travelers. St. Paul Travelers’ rating reflects the combined groups’ strong capitalization, superior earnings power and dominant market profile in commercial, specialty and personal lines. In addition, Best said the rating recognizes that about $1.7 billion of proceeds from St. Paul Travelers’ divestiture of Nuveen Investments Inc. will be contributed to its insurance subsidiaries in the third quarter.