A.M. Best has affirmed the financial strength ratings (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 and Jevco Insurance Company, as
well as its separately rated member, Intact Farm Insurance Inc.
(IFI) (Quebec). All companies are domiciled in Ontario, unless otherwise
specified.
In addition, A.M. Best has affirmed the ICR of “a-” and all debt ratings
of the ultimate parent company, Intact Financial Corporation
(IFC) [TSX: IFC]. The outlook for all ratings is stable. (Please see
below for a detailed listing of the debt ratings.)
The ratings reflect Intact Group’s strong risk-adjusted capitalization,
leading market position within the Canadian property/casualty insurance
industry and its market access through multiple channels of distribution
and geographic diversification. In addition, despite the severity of the
2013 catastrophic events in Canada, the Intact Group posted profitable
underwriting results, demonstrating—once again—its pricing and
segmentation prowess and efficient claims management. The ratings also
continue to benefit from the added financial flexibility of IFC, whose
shares are listed and traded on the Toronto Stock Exchange. Partially
offsetting these rating strengths are the challenges the organization
faces given the continuing soft commercial lines pricing, a trend of
more frequent and severe storms across Canada and the strong competition
for market share.
The rating affirmations for IFI acknowledge its strong 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 IFC, such as its corporate reinsurance
program. Partially offsetting these positive rating factors are IFI’s
concentration of farm risk in Quebec and its soft commercial lines
market.
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 250 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 3 billion
preliminary short form base shelf prospectus)
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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