S&P’s assigns ACE Canada a positive outlook

Standard & Poor’s Rating Services revised its outlook on ACE INA Insurance (ACE Canada) to positive from stable.
At the same time S&P’s affirmed the long-term ‘A’ financial strength and counterparty credit ratings on the company.
“The outlook revision reflects our assessment of the company’s underwriting performance, which we believe has been relatively consistent and strong despite softening market conditions,” an S&P’s release says.
“Although results were weaker in 2008 compared with previous years, they remain favourable, especially when compared with those of its industry peers.”
Weaknesses factored into the ratings include the company’s relative lack of size and scale in Canada, the very competitive business environment in which it operates, its lack of control over its independent broker distribution channel and its concentration in liability insurance products, the release continues.
“Despite these challenges, the company continues to produce strong underwriting profitability, with a combined ratio that has been below 100% since 2002,” it adds.
“Its average combined ratio during 2002-2007 was 75.6% (or 77.0% including 2008); this compares with an average of 86.3% for its predominantly commercial peers and an average of 95.5% for the overall industry during the same time period.”