CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - AUGUST 24, 2022 11:23 AM (EDT)
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” (Excellent) of the members of Northbridge Financial Corporation (Northbridge), which include Federated Insurance Company of Canada (Manitoba, Canada), Northbridge General Insurance Corporation, Zenith Insurance Company and Verassure Insurance Company. The outlook of these Credit Ratings (ratings) is stable. All companies are domiciled in Ontario, Canada unless otherwise specified. Northbridge Financial Corporation is a subsidiary of Fairfax Financial Holdings Limited (Fairfax) [TSX: FFH].
The ratings of Northbridge reflect the group’s balance sheet strength, which AM Best assess as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The rating affirmations also reflect Northbridge’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 underwriting results in the small to midmarket commercial segment. Additionally, these ratings acknowledge the group’s favorable reserve development in most years and the financial flexibility provided by Fairfax, which maintains financial leverage that is in line with its current ratings, as well as additional liquidity sources given its access to capital markets and lines of credit.
Partially offsetting these positive rating factors are competitive market conditions that persist in Canada’s commercial and personal lines segments. Additionally, some volatility in the group’s investment gains exists, although the group has proven itself adept at managing its capital levels and offsetting volatility with generally favorable underwriting performance.
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.