June 24, 2005 by Canadian Underwriter
The financial strength ratings for several of AXA Canada Inc.’s wholly owned property and casualty insurance subsidiaries were recently downgraded by A.M. Best.
The financial strength ratings have been downgraded to A (Excellent) from A+ (Superior) for AXA Assurances Inc. (Montreal, Quebec) and its wholly owned subsidiary, AXA Assurances agricoles inc., (Montreal, Quebec). In addition, downgrades have been given to the financial strength ratings to A- (Excellent) from A (Excellent) for AXA Pacific Insurance Company (British Columbia) and to B++ (Very Good) from A- (Excellent) for the Insurance Corporation of Newfoundland, Limited (Newfoundland).
A.M. Best has also affirmed the A- (Excellent) ratings of AXA Insurance (Ontario) and Anglo Canada General Insurance Company (Ontario). The outlook on all of the ratings is negative.
A.M. Best’s bases these downgrades on the opinion that the overall financial strength of the company, including its wholly owned property and casualty subsidiaries, does not support a superior rating in part because the future surplus growth could be challenged by dividend requirements due to excess regulatory capital, emerging soft market pricing particularly in commercial lines, the potential increase in claims frequency and the uncertainty that regulatory changes to automobile insurance will have upon the long-term underwriting performance of its subsidiary insurance companies.