A.M. Best rates ING ‘A+’ but warns of soft market impact on profits

A.M. Best Co. has affirmed the financial strength rating of A+ of the ING Canada Group, but noted: ING Canada will be challenged to maintain current profitability levels due to pricing pressure from competitors for commercial lines products and the impact of regulated automobile business.
The ratings agency said capitalization is strongly supported by the group’s positive returns and by the added financial flexibility of ING Canada Inc. The individual companies within the group provide localized expertise and flexible pricing in various geographic markets and allow ING Canada to deliver its products through multiple channels of distribution, while maintaining strong relations with local brokers.
The agency further noted: disciplined underwriting and pricing, conservative reserving and in-house claims handling have consistently resulted in better than average underwriting ratios.
A.M. Best observed that INGs favourable underwriting results of recent years may lead to voluntary rate decreases among competing companies to attract market share. But soft-market pricing is something of which the company should be aware, the agency added.
Partially offsetting rating strengths is the current softening in the commercial lines underwriting cycle, strong competition for market share and the uncertainty of the long-term impact on profitability due to regulatory actions to reform the automobile insurance product in most provinces.