A.M. Best Affirms Ratings of Intact Financial Corporation and Its Subsidiaries
30 April 2015 - 10:02PM
Business Wire
A.M. Best has affirmed the financial strength ratings
(FSR) of A+ (Superior) and the issuer credit ratings (ICR) of “aa-”
of the members of Intact Insurance Group (Intact Group),
which are 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, Intact Group continues to demonstrate its pricing and
segmentation expertise 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 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 past
five years and quality surplus protection and synergies with IFC,
such as its corporate reinsurance program. Partially offsetting
these positive rating factors is IFI’s concentration of farm risk
in Quebec.
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 indicative 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 ratings and outlook of members of Intact Group could benefit
from a consistently favorable earnings trend that outperforms
peers, while maintaining superior risk-adjusted capitalization.
However, the ratings and outlook may come under negative pressure
if an unfavorable earnings trend develops and/or the group’s risk-
adjusted capital erodes.
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.
Key insurance criteria reports utilized:
- Catastrophe Analysis in A.M. Best
Ratings
- Insurance Holding Company and Debt
Ratings
- Rating Members of Insurance Groups
- Risk Management and the Rating Process
for Insurance Companies
- Understanding BCAR for Canadian
Property/Casualty Insurers
- Understanding Universal BCAR
This press release relates to rating(s) that have been
published on A.M. Best's website. For all rating information
relating to the release and pertinent disclosures, including
details of the office responsible for issuing each of the
individual ratings referenced in this release, please visit A.M.
Best’s Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2015 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
A.M. Best CompanyJacqalene Lentz, 908-439-2200, ext.
5762Senior Financial
Analystjacqalene.lentz@ambest.comorGreg Williams,
908-439-2200, ext. 5815Assistant Vice
Presidentgreg.williams@ambest.comorChristopher
Sharkey, 908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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