Best’s News & Research Service - October 31, 2019 04:18 PM (EDT)
AM Best Affirms Credit Ratings of Trisura Guarantee Insurance Company and Trisura Specialty Insurance Company
- October 31, 2019 04:18 PM (EDT)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Trisura Guarantee Insurance Company (Trisura Guarantee) (Toronto, Ontario, Canada), and its sister company, Trisura Specialty Insurance Company (Trisura Specialty) (Oklahoma City, OK). The outlook of these Credit Ratings (ratings) remains stable.
The ratings of Trisura Guarantee reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
Trisura Guarantee’s balance sheet strength is supported by consistent growth in surplus and conservative reserving practices. Operating performance remains favorable with solid underwriting performance, and is supported further by consistent solid net investment income over the prior five-year period.
Positive rating action could occur if the company were to expand its geographic and market presence successfully while maintaining a trend of favorable operating performance in excess of peer averages. Negative rating pressure may materialize if the company were to incur significant losses in its capitalization, experience a substantial reduction in the profitability of its core book of business or encounter substantial adverse reserve development relative to peers and industry averages.
The ratings of Trisura Specialty reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM.
Trisura Specialty has continued to expand its operations through 2019, meeting management’s projections to date. Underwriting performance is in line with expectations at this time, and AM Best expects greater underwriting diversification as the company continues to scale operations.
Positive rating action could occur if the company is able to demonstrate the implementation of its strategy through a trend of consistent and favorable operating results in excess of peer performance. Negative rating pressure could occur if the company is unable to leverage existing relationships to obtain favorable business or if the company demonstrates an inability to properly manage the degree of risk on its books, resulting in adverse performance.
Both companies’ ratings also consider the benefits received from the publicly traded ultimate parent, Trisura Group Ltd. [TSX: TSU]. The parent company remains well-capitalized and recently completed a $58 million equity raise; however, there is neither any rating lift nor drag afforded to the operating entities.
This press release relates to Credit Ratings that have been published on AM 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 see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency and information provider with an exclusive focus on the insurance industry.