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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - OCTOBER 07, 2010 12:00 AM (EDT)
A.M. Best Co. has assigned a financial strength rating of B++ (Good) and issuer credit rating (ICR) of "bbb" to Trisura Guarantee Insurance Company (Trisura) (Toronto, ON). Concurrently, A.M. Best has assigned an ICR of "bb" to 6436978 Canada Limited (Canada Limited) (Toronto, ON), the non-operating holding company of Trisura. The outlook assigned to all ratings is stable.
The ratings and outlook assigned to Trisura reflect its favorable risk-adjusted capitalization, improved operating performance and experienced management team. Trisura's operating performance has steadily improved since its inception in 2006, and it achieved favorable pre-tax operating income and a combined ratio that was just above breakeven by year-end 2008. In 2009, the company achieved an underwriting profit of $2.5 million with a combined ratio of 91.5%. These favorable results have continued through year-to-date 2010.
While Trisura operations are relatively new, its executive management team is represented by several seasoned industry professionals who have worked together previously in various capacities at other successful Canadian property/casualty insurance companies.
Partially offsetting these positive factors are the disproportionately higher expenses associated with the new book of business and increased competition in Canada. A.M. Best believes challenging economic conditions, along with continued soft market conditions, will place considerable pressure and execution risk on management to meet its growth targets and balance operating results.
Trisura is a Canadian property/casualty insurance company specializing in the niche markets of liability and surety coverage for small to medium-sized market risks.
The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "A.M. Best's Ratings and the Treatment of Debt"; and "Understanding BCAR for Canadian Property/Casualty Insurers." Methodologies can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.