Poor operating results see Gore Mutual downgraded by A.M. Best

Rating agency A.M. Best has downgraded the financial strength rating of Ontario’s Gore Mutual Insurance Company to B+ from B++ on the back of deteriorating operating results and its heavy concentration of business in the troubled Ontario market.
“For the past three years, net income has declined due to large underwriting losses and declining investment returns,” states an A.M. Best release. Gore is credited with good capitalization and adequate reserves. “The company’s surplus is supported by a consistently favorable loss development,” the release goes on to say.
At the same time, TD Bank’s Meloche Monnex say the rating of one subsidiary, Primmum Insurance Company in Ontario, upgraded to B++ from B+. This reflects the company’s adequate capitalization, sound liquidity and strong operating results, says A.M. Best. Adverse reserve development for the accident years 1999 and 2000 is an offsetting factor. An initial rating of B+ was assigned to fellow subsidiary TD General Insurance Company in Quebec, based on its strong capitalization and adequate reserves. Another Meloche Monnex company, Security National in Quebec, had its B+ rating affirmed.
An upgrade was also given to Desjardins Group’s Personal General Insurance Company, Quebec, to A- from B++. The move reflects excellent capitalization and operating results that have outpaced the industry. Fellow Desjardins subsidiary Assurances Generales des Caisses Desjardins was affirmed at A-, and an initial rating of B+ was assigned to Ontario-based Personal Insurance Company of Canada.
Also affirmed were the ratings of Royal Bank of Canada insurance operations, RBC General Insurance Company at B+, and RBC Travel Insurance Company at B++. Both are based in Ontario, and both were praised for strong capitalization and reserves. However, A.M. Best notes that RBC General has shown poor operating results and is too heavily concentrated in Ontario. “Moderate investment returns have been inadequate to compensate for sizeable underwriting losses generated from RBC General’s core Ontario auto book of business.”