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BEST'S CREDIT RATING ACTION

Best’s News & Research Service - May 02, 2022 06:27 PM (EDT)

AM Best Affirms Credit Ratings of Intact Financial Corporation and Subsidiaries

  • May 02, 2022 06:27 PM (EDT)

Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “aa-” (Superior) of Intact Insurance Company, the lead company of Intact Financial Corporation (IFC) [TSX: IFC], as well as the other subsidiaries of IFC. Concurrently, AM Best has affirmed the Long-Term ICR of “a-” (Excellent) and the Long-Term Issue Credit Ratings (Long-Term IRs) of IFC, the parent holding company. In addition, AM Best has affirmed the Long-Term ICR of “a-” (Excellent) and the Long-Term IR of Intact U.S. Holdings Inc. (Delaware). The outlook of these Credit Ratings (ratings) is stable. All companies are domiciled in Ontario, Canada, unless otherwise specified. See below for a complete listing of the members of Intact Financial Corporation’s FSRs, Long-Term ICRs and Long-Term IRs.

The ratings reflect IFC’s consolidated balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

IFC maintains the strongest levels of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The very strong balance sheet strength assessment considers IFC’s significant surplus accumulation over the long term driven by capital raises (both debt and common stock offerings) in support of past acquisitions, which was partially offset by the increase in goodwill resulting from those acquisitions.

During 2021, IFC reported the largest level of earnings before interest and taxes (EBIT) of the recent five-year period, driven by a considerable increase in underwriting earnings. Pre-tax operating earnings driven by increasingly profitable underwriting results in recent years have been augmented by growth in investment income.

IFC maintains a favorable business profile, reflective of its excellent geographic, product and channel diversification. IFC, through its operating entities, enjoys strong brand name recognition across Canada, operating distinct brands throughout the provinces and territories. Intact US gives the organization a North America-based platform to write specialty lines. The RSA acquisition further expands Intact’s leadership position within Canada, augmenting the specialty lines platform with international expertise, and providing Intact with entry into the U.K., Ireland and international markets.

AM Best considers IFC’s fully integrated ERM program appropriate for its risk profile considering the scale, scope and complexity of the organization.

The FSR of A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) have been affirmed with stable outlooks for the following members of the Intact Financial Corporation:


  • Atlantic Specialty Insurance Company

  • Belair Insurance Company Inc.

  • Homeland Insurance Company of New York

  • Homeland Insurance Company of Delaware

  • Intact Insurance Company

  • Jevco Insurance Company

  • Novex Insurance Company

  • OBI America Insurance Company

  • OBI National Insurance Company

  • Split Rock Insurance, Ltd

  • The Guarantee Company of North America USA

  • The Nordic Insurance Company of Canada

  • Trafalgar Insurance Company of Canada

The following Long-Term IR has been assigned with a stable outlook:

— “bbb” (Good) on CAD 150 million, 5.25% preferred shares, due March 31, 2027

The following Long-Term IRs have been affirmed with stable outlooks:

Intact Financial Corporation—

— “a-” (Excellent) on CAD 250 million, Series 2, 6.40% senior unsecured medium-term notes, due 2039

— “a-” (Excellent) on CAD 100 million, Series 3, 6.2% senior unsecured medium-term notes, due 2061

— “a-” (Excellent) on CAD 250 million, Series 5, 5.16% senior unsecured medium-term notes, due 2042

— “a-” (Excellent) on CAD 250 million, Series 6, 3.77% senior unsecured medium-term notes, due 2026

— “a-” (Excellent) on CAD 425 million, Series 7, 2.85% senior unsecured medium-term notes, due 2027

— “a-” (Excellent) on CAD 300 million, Series 8, 3.691% senior unsecured medium-term notes, due 2025

— “a-” (Excellent) on CAD 300 million, Series 9, 1.928% senior unsecured medium-term notes, due 2030

— “a-” (Excellent) on CAD 300 million, Series 10, 2.954% senior unsecured medium-term notes, due 2050

— “a-” (Excellent) on CAD 375 million, Series 11, 1.207% senior unsecured medium-term notes, due 2024

— “a-” (Excellent) on CAD 375 million, Series 12, 2.179% senior unsecured medium-term notes, due 2028

— “a-” (Excellent) on CAD 250 million, Series 13, 3.765% senior unsecured medium-term notes, due 2053

— “bbb+” (Good) on CAD 250 million, 4.125% subordinated debentures, due 2081

— “bbb” (Good) on CAD 250 million, 3.396% non-cumulative five-year rate reset Class A Series 1 preferred shares

— “bbb” (Good) on CAD 250 million, 3.457% non-cumulative five-year rate reset Class A Series 3 preferred shares

— “bbb” (Good) on CAD 150 million, 5.2% non-cumulative fixed rate Class A Series 5 preferred shares

— “bbb” (Good) on CAD 150 million, 5.3% non-cumulative fixed rate Class A Series 6 preferred shares

— “bbb” (Good) on CAD 250 million, 4.9% non-cumulative five-year rate reset Class A Series 7 preferred shares, due 2023

— “bbb” (Good) on CAD 150 million, 5.4% non-cumulative fixed rate shares Class A Series 9 preferred shares

The following indicative Long-Term IRs under the shelf registration have been affirmed with stable outlooks:

Intact Financial Corporation—

— “a-” (Excellent) on senior unsecured notes

— “bbb+” (Good) on subordinated unsecured notes

— “bbb” (Good) on Class A preferred shares

The following Long-Term IR has been affirmed with a stable outlook:

Intact U.S. Holdings Inc.—

— “a-” (Excellent) on $275 million 4.60% senior unsecured notes, due 2022

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 Performance Assessments, 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.



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