Gore Mutual ratings lowered on performance concerns: S&P

Cambridge, Ontario-based Gore Mutual Insurance Co. has seen its counterparty credit and financial strength ratings lowered to “BB” from “BBB” by rating agency Standard & Poor’s. The ratings are based on public data, rather than an interactive rating process, S&P notes.
“The rating action reflects the company’s weak operating performance, marginal liquidity, and very high geographic concentration, which are partially offset by its adequate capitalization,” says S&P credit analyst Tom E. Thun.
S&P notes that the company has high geographic concentration with 84% of its direct written premiums in Ontario. The company did post a net loss of $6.1 million in 2003, with an underwriting loss of $24.1 million, according to filings with the federal regulator. However, results in 2004 have improved and as of the end of the third quarter, the company had posted net income of $16.4 million on underwriting profit of $16.0 million.
In terms of capitalization, Gore holds a score of 250% on the federal government’s minimum capital test (MCT) with total assets of $336.1 million, up from a score of 216% and assets of $315.5 million at the end of 2003.