Coachman Insurance financial strength rating upgraded from B to B++

A.M. Best Co. has upgraded the financial strength rating of Coachman Insurance Company (Coachman) from B to B++.
The outlook has been revised to stable from positive.
A.M. Best has also affirmed the financial strength rating of A- of SGI Canada (SGI).
Additionally, A.M. Best has affirmed the financial strength rating of B++ of SGI CANADA Insurance Services Limited (SCISL).
A.M. Best also has affirmed the financial strength rating of B++ of SCISL’s majority owned subsidiary, The Insurance Company of Prince Edward Island (ICPEI).
The outlook for these ratings is stable. All companies are subsidiaries of SGI.
Coachman is a niche automobile writer in Ontario and is a wholly owned subsidiary of SCISL.
The rating upgrades are reflective of Coachman’s excellent risk-adjusted capitalization, improved profitability and the explicit financial support of SGI, according to A.M. Best.
“These positive rating factors are partially offset by Coachman’s exposure to the volatile Ontario automobile market, strong competitive market pressure, rising claims cost inflation and volatility in the investment markets,” according to an A.M. Best release. “However, the company has shown excellent profitability ratios over the last few years and benefits from operational support and reinsurance protection from SGI.”
The rating affirmations of SGI, SCISL and ICPEI are reflective of their relative risk-adjusted capitalization, modest leverage positions, historical profitability and business profiles within their respective markets, A.M. Best continued.
“These companies face challenges that are similar to Coachman’s, in addition to risks associated with expansion into new territories and a trend of more frequent and severe weather-related events across Canada,” according to the ratings agency. “However, SGI provides both internal and external reinsurance to help protect surplus and provide capacity.”