December 6, 2005 by Canadian Underwriter
Toronto-based, ACE INA Insurance Co. (ACE Canada) recently received a ‘A’ long-term counterparty credit and financial strength ratings from S&P’s.
“The ratings reflect ACE Canada’s focused product selection in the Canadian commercial property and casualty (P&C) market, while recognizing the competitive business environment and the commodity-like nature of the sector,” St& P’s credit analyst Donald Chu says.
ACE Canada is a strategically important subsidiary of the ACE group of companies, according to S&P’s, and therefore its ratings are in part based on the support of its parent, Bermuda-based holding company of the ACE Group of Companies ACE Ltd.
S&P’s says that ACE Canada’s rating would have been lower without the benefit of the group.
ACE Canada is a relatively small commercial P&C insurance company that has an overall commercial market share position of about 2% based on 2004 gross written premiums.
However, S&P’s says the company is a significant provider within selected market niches including liability, property, automobile, accident and sickness, aircraft, marine, boiler and machinery, fidelity, hail, and surety.
ACE Canada is expected to maintain its good operating performance, conservative investment quality and liquidity, and solid capital adequacy position, according to S&P’s. However, the rating agency says that “industry consolidation and low barriers to entry will place continued pressure on ACE Canada’s asset growth and margins.”
“We expect the company to continue with its underwriting discipline and maintain an average combined ratio of under 100% through the cycle.”