June 20, 2001 by Canadian Underwriter
Rating agency A.M. Best has issued a financial strength rating of "A" (excellent) for CGU Insurance Co. of Canada and a rating of "A-" (excellent) to group subsidiaries Scottish & York Insurance Co., and Traders General Insurance Co. The rating agency also assigned an "A" (excellent) rating to Barbados-based Victoria Reinsurance Ltd., which reinsures the group’s Canadian business.
A.M. Best says that, partly offsetting these rating strengths assigned to the CGU group, is the extremely competitive conditions in the Canadian property and casualty insurance market. CGU’s poor underwriting results are attributed to this poor operating environment, particularly through the group’s exposure to auto business in Ontario and Atlantic Canada. CGU’s management has subsequently tightened its underwriting guidelines, the rating agency notes, but the positive impact of this will likely be slow felt. "A.M. Best expects a slow recovery, and the effects of these actions have yet to be demonstrated."
Furthermore, A.M. Best has given a rating of "A" (excellent) to Pilot Insurance Co. based on the company’s strong capitalization and underwriting results. Offsetting the insurer’s rating strength is its lack of geographic diversification, the rating agency says.