A.M. Best Affirms Ratings of Intact Financial Corporation and Its Subsidiaries

A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa-” of the members of Intact Insurance Group (Intact Group), which include Belair Insurance Company Inc. (Quebec), Intact Insurance Company, Novex Insurance Company, The Nordic Insurance Company of Canada, Trafalgar Insurance Company of Canada, AXA Insurance Inc. (Quebec), AXA Insurance (Canada) and AXA Pacific Insurance Company (all three known as AXA Canada). All companies are domiciled in Ontario, unless otherwise specified.

A.M. Best also has affirmed the FSR of A+ (Superior) and the ICR of “aa-” of Intact Farm Insurance Inc. (Quebec). In addition, A.M. Best has affirmed the FSR of A- (Excellent) and the ICR of “a-” of InnovAssur, assurances générales inc. (Quebec).

Additionally, A.M. Best has affirmed the ICR of “a-” as well as all debt ratings of the Intact Group’s parent, Intact Financial Corporation (IFC) [TSX: IFC]. The outlook for all the above ratings is stable.

Concurrently, A.M. Best has upgraded the FSR to A+ (Superior) from A (Excellent) and the ICR to “aa-” from “a” and revised the outlook to stable from positive for the newly added Intact Group member, Jevco Insurance Company (Jevco) (Ontario). (Please see below for a detailed listing of the debt ratings.)

The ratings reflect Intact Group’s superior risk-adjusted capitalization, leading market position within the Canadian property/casualty insurance industry, improved financial leverage position of IFC since closing on the purchase of Jevco and the continued success with the integration of both the Jevco and AXA Canada businesses.

The rating upgrades for Jevco reflect its full integration into the Intact Group’s operations and strategic plans through the participation agreement, Intact Group’s internal reinsurance treaty.

The rating affirmations for Intact Farm Insurance Inc. acknowledge its superior risk-adjusted capitalization, expertise in farm property and liability insurance in Quebec, favorable earnings over the last five years and quality surplus protection and synergies with the parent, such as its corporate reinsurance program. Partially offsetting these positive rating factors are Intact Farm Insurance Inc.’s concentration of farm risk in Quebec, soft commercial lines market and growth through the continued assumption of Intact Insurance Company’s farm business.

The ratings for InnovAssur recognize its strong risk-adjusted capitalization, profitable operating performance and favorable business environment. These strengths are partially offset by the company's geographic and product line concentration and its single distribution channel.

The following debt ratings have been affirmed:

Intact Financial Corporation—
-- “a-” on CAD 250 million, Series 1, 5.41% senior unsecured medium-term notes, due September 3, 2019
-- “a-” on CAD 250 million, Series 2, 6.40% senior unsecured medium-term notes, due November 23, 2039
-- “a-” on CAD 300 million, Series 4, 4.70% senior unsecured medium-term notes, due August 18, 2021
-- “a-” on CAD 200 million, Series 5, 5.16% senior unsecured medium-term notes, due June 16, 2042
-- “a-” on CAD 50 million, Series 5, 5.16% senior unsecured medium-term notes, due June 16, 2042

The following debt ratings under the shelf registration have been affirmed:

Intact Financial Corporation—
-- “a-” on senior unsecured debt securities
-- “bbb+” on subordinated unsecured debt securities
-- “bbb” on Class A preferred shares
(included in the CAD 2 billion preliminary short form base shelf prospectus issued May 13, 2009)

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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