Best’s News & Research Service - August 12, 2021 01:22 PM (EDT)
AM Best Affirms Credit Ratings of Certain Subsidiaries of Fairfax Financial Holdings Limited
- August 12, 2021 01:22 PM (EDT)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” (Excellent) for the members of Zenith National Insurance Group (Zenith Group), the members of Northbridge Financial Corporation (Northbridge) (Toronto, Canada) and Wentworth Insurance Company Limited (Wentworth) (Barbados). The outlook of these Credit Ratings (ratings) is stable. These companies are subsidiaries of Fairfax Financial Holdings Limited (Fairfax). (See below for a detailed listing of the companies and ratings.)
The ratings of the Zenith Group reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM. The ratings also are enhanced by the benefits the group derives from its position in the Fairfax enterprise. Zenith Group continues to produce solid operating returns despite soft market conditions in the U.S. workers’ compensation market. While the COVID-19 pandemic has resulted in premium reductions related to client payrolls, the impact to the Zenith Group has been somewhat muted by their specialization in agricultural businesses, which was deemed essential during the pandemic.
The ratings of Northbridge reflect the group’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM. The ratings of Northbridge also acknowledge the group’s position within Canada’s commercial insurance market, diversified commercial lines franchise and strong broker distribution network. In recent years, the group has benefited from hardening rates in the transportation segment, as well as strong performance in the small to midmarket commercial segment. Partially offsetting these positive rating factors are competitive market conditions that persist in Canada’s commercial and personal lines segments, and the group’s relatively unfavorable expense levels.
The ratings of Wentworth reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings also are enhanced by the benefits it derives from its position in the Fairfax enterprise. In addition, the ratings of Wentworth are supported by its historically profitable underwriting performance and loss reserve position. The company benefits from its investment portfolio, which includes a significant allocation of cash and short-term securities. Partially offsetting these positive rating factors is the company’s concentration of property catastrophe exposure within its book of business, which subjects it to a substantial degree of volatility as evidenced over the past few years.
The FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been affirmed with stable outlooks for the following members of Zenith National Insurance Group:
- Zenith Insurance Company
- ZNAT Insurance Company
The FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been affirmed with stable outlooks for the following members of the Northbridge Financial Corporation:
- Federated Insurance Company of Canada
- Northbridge General Insurance Corporation
- Zenith Insurance Company
- Verassure Insurance Company
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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.