Allianz Insurance Co. and Trafalgar ratings cut

Standard & Poor’s has lowered the counterparty credit and financial strength ratings of Allianz Insurance Co. of Canada and Trafalgar Insurance Co. of Canada to “BBB” from “BBB+”. The downgrade follows a review which began last October when it was announced the companies would be purchased by ING Canada.
That sale became final last month, and S&P has since had discussions with ING Canada over how it intends to handle the new business. “Initial discussions indicate that one or both of the purchased entities might have its policies rewritten in ING Canada or affiliates in the near future,” says S&P credit analyst Michael Gross. The rater is “uncertain regarding ING Canada’s strategic intent and what group resources are available to benefit the acquired companies”.
The rater is also maintaining “creditwatch developing” status on the two companies as it continues discussions with ING Canada.
The rating does not apply to Allianz Global Risks Canada, which was not part of the sale to ING Canada and operates as a branch of Allianz Global Risks U.S.