JUNE 22, 2007 12:00 AM (EDT)
A.M. Best Affirms and Assigns Ratings to AXA Canada Inc.'s Property/Casualty Insurance Subsidiaries
Charles M. Huber
(908) 439-2200, ext. 5122
Joseph A. Burtone
(908) 439-2200, ext. 5125
(908) 439-2200, ext. 5644
(908) 439-2200, ext. 5378
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JUNE 22, 2007 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength ratings (FSR) of AXA Canada Inc.'s property/casualty insurance subsidiaries and assigned issuer credit ratings (ICR). A.M. Best has affirmed the FSR of A (Excellent) and assigned an ICR of "a" to AXA Assurances Inc. (Montreal, Quebec) and its wholly owned subsidiary, AXA Assurances agricoles inc. (Montreal, Quebec). A.M. Best has also affirmed the FSR of A- (Excellent) and assigned an ICR of "a-" to AXA Insurance (Canada) (Ontario), AXA Pacific Insurance Company (British Columbia), AXA General Insurance Company(Newfoundland) and InnovAssur, assurances generales inc. (Montreal, Quebec). The outlook on all ratings is stable.
In addition, A.M. Best has assigned an ICR of "bbb" to AXA Canada Inc. (Montreal, Quebec), the parent holding company. The outlook on this rating is stable.
The affirmation of the FSRs is a reflection of each company's respective risk-adjusted capitalization, strong liquid balance sheet, profitable operating performance, market leadership, respected brand name recognition and the benefits they receive from synergies derived from common senior management, corporate governance, centralized support functions and geographic and product line diversification.
These positive rating factors are partially offset by industry softening in commercial lines underwriting; increased pressure from major competitors for market share; the potential for adverse reserve development due to construction liability claims in Western Canada; catastrophic earthquake exposure in British Columbia and Quebec; and the uncertainty regarding the long-term benefits of regulated product reforms to auto insurance in the companies' major markets of Ontario and Alberta. These concerns are partially mitigated by knowledgeable local management teams, a conservative reserving philosophy and a comprehensive reinsurance program with primarily high quality reinsurers to protect surplus.
The ICR of AXA Canada Inc. is a reflection of the overall financial strength, profitable operating performance and excellent business profile of the underlying operating units and takes into consideration both the property/casualty insurance sector and its life insurance operations. In addition, the rating is based upon the credit risk implications of the holding company being a separate legal entity and the normal subordination of its creditors to the operating companies' policyholders.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.
Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors.