CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - SEPTEMBER 14, 2012 12:00 AM (EDT)
A.M. Best Co. has upgraded the financial strength rating to A- (Excellent) from B++ (Good) and issuer credit rating (ICR) to “a-” from “bbb+” of Trisura Guarantee Insurance Company (Trisura). Concurrently, A.M. Best has upgraded the ICR to “bbb-” from “bb+” of 6436978 Canada Limited (Canada Limited), the non-operating holding company of Trisura. The outlook for all ratings has been revised to stable from positive. Both companies are domiciled in Toronto, Ontario.
The upgrades reflect Trisura’s excellent levels of risk-adjusted capitalization, favorable operating performance and strategic focus on small to medium-sized market risks. The positive rating factors are derived from the company's consistent operating profitability driven by favorable underwriting results and a steady stream of investment income. These favorable results have continued through 2012.
Partially offsetting these positive factors is Trisura’s elevated gross underwriting leverage and competitive market pressures that continue to reflect the soft market conditions in the liability and fidelity lines. While the company's equity continues to support premium and liability exposures, the net and gross underwriting leverage measures are elevated.
A.M. Best believes that Trisura is well positioned at its current rating level. However, key rating factors that could lead to negative rating actions include unprofitable growth leading to an unfavorable earnings trend and/or a significant deterioration in the company’s risk-adjusted capital level.
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. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Canadian Property/Casualty Insurers”; and “Rating Members of Insurance Groups.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.