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Member, Beacon International Group, Ltd.
TORONTOThe financial strength ratings of six commercial insurance subsidiaries of Northbridge Financial Corp. of Toronto have been upgraded to A from A- by insurer rating agency A.M. Best Co. Inc.
Oldwick, N.J.,-based Best said the ratings outlook for all six companies is stable.
The upgraded Northbridge units are Commonwealth Insurance Co. of Vancouver, British Columbia; Seattle-based Commonwealth Insurance Co. of America; Winnipeg, Manitoba-based Federated Insurance Co. of Canada; and Lombard General Insurance Co. of Canada, Markel Insurance Co. of Canada and Zenith Insurance Co., all of Toronto.
Best noted in a statement that the rating upgrades for the insurers "reflect their positive 10-year average underwriting and operating performance, which favorably compares with similarly rated insurers," as well as other factors that include the insurers' favorable reserving trends and niche business focus.
Losses from Hurricanes Katrina, Rita and Wilma hurt Commonwealth's and Northbridge's 2005 and 2006 financial results, but Commonwealth has largely exited the U.S. marine business responsible for those losses, and its ongoing business model relies on reinsurance, Best noted. Therefore, while Commonwealth's business model continues to incorporate a higher degree of risk compared with its sister companies, the company "received a lift from the Northbridge enterprise," Best stated.
The ratings of Markel, Federated and Lombard General acknowledge their respective niche profiles, Best said. For example, Markel is a leading transportation insurer in Canada; Lombard General focuses largely on small and midsize businesses, some specialty risks, commercial trade groups and associations, and selected large Canadian businesses.