Best Puts Clarendon’s Ratings on Review/Negative for Enstar Sale

A.M. Best Co. has placed under review with negative implications the financial strength rating (FSR) of ‘A-‘ (Excellent) and issuer credit ratings (ICR) of “a-” of Delaware-based Clarendon Insurance Group and its members.

The ratings action affects the following companies in the Clarendon Insurance Group:
— Clarendon National Insurance Company
— Clarendon America Insurance Company
— Clarendon Select Insurance Company
— Harbor Specialty Insurance Company

Best explained that it has taken the rating actions following the announcement that Clarendon’s ultimate parent, German reinsurer Hannover Rueckversicherung AG (Hannover Re), has reached an agreement on the sale of all the operating companies of Clarendon Insurance Group, Inc. to Enstar Group Limited.

“Enstar specializes in the acquisition and management of insurance and reinsurance companies that are in run-off,” Best added. “The close of the transaction is anticipated to occur during the second quarter of 2011 and is still subject to customary regulatory approvals.

“The under review status with negative implications reflects the uncertainties associated with this transaction and any changes that may be brought on by changes in ownership.

Source: A.M. Best