April 21, 2011 by Canadian Underwriter
A.M. Best Co. has upgraded the financial strength rating (FSR) to A- (Excellent) from B++ (Good) and issuer credit rating (ICR) to “a-” from “bbb” of The Sovereign General Insurance Company (Alberta).
Concurrently, A.M. Best affirmed the FSR of A- (Excellent) and ICR of “a-” of Co-operators General Insurance Company (Co-operators General).
Sovereign is a wholly owned subsidiary of Co-operators General.
“The upgrading of the ratings of Sovereign reflects its continued favorable operating earnings trend and solid risk-adjusted capital position,” AM. Best said in a press release. “In addition, the company’s ratings also reflect a rating enhancement from a
formal guaranty issued by Co-operators General with respect to Sovereign’s liabilities.”
Meanwhile, the ratings of Co-operators General recognize its “strong risk-adjusted capitalization, generally historical profitable operating performance, as well as its market leadership position driven by strong brand name recognition, product line and geographic diversification and the effective use of subsidiaries and multiple channels of distribution,” A.M. Best said.
The rating company went on to note that “partially offsetting these strengths is the continued soft market in the commercial lines sector, strong competitive pressure in personal lines, challenging automobile markets and a trend of more frequent and severe losses from storms across Canada.”