Co-operators upgraded by S&P

Standard & Poor’s has upgraded the long-term counterparty credit and financial strength ratings on Guelph, Ontario-based Co-operators General Insurance Co. to “BBB” from “BBB-“. The rating agency also pushed the long-term national preferred stock rating on the company to “P-3” from “P-3 low”, and its long-term global preferred stock rating to “BB” from “BB-“. All ratings carry a positive outlook.
S&P says the ratings reflect the company’s improved operating performance. As well, the upgrades reflect “its position as one of Canada’s larger property and casualty insurers, its ties to the co-operative/credit union system, and its strong capitalization, asset quality and liquidity”, according to S&P credit analyst Donald Chu.
He credits the new management team which took over in 2001, as well as overall sector improvement with the company’s better results in recent quarters. He notes the high customer satisfaction and retention levels being achieved by the company’s strategy.
Partially offsetting these positives are the competitive business environment and the company’s own lack of access to capital markets as a result of its status as a co-operative stock company. However, this is also a positive, as the company is not required to pay dividends to its largely co-operative ownership and can thus reinvest cash generated in growth strategies.
S&P foresees further improvement in the company’s financial performance moving forward.