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A.M. Best Affirms Ratings of ING Canada Group
OLDWICK, N.J.-(Business Wire)-June 17, 2008 - A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of "aa-" of ING Canada Group (the Group) (Toronto, Ontario). The Group includes Belair Insurance Company Inc. (Montreal, Quebec), ING Insurance Company of Canada, ING Novex Insurance Company of Canada, The Nordic Insurance Company of Canada and Trafalgar Insurance Company of Canada. Additionally, A.M. Best has affirmed the ICR of "a-" and the CAD 1 billion preliminary short form base shelf prospectus' indicative ratings of "a-" on senior unsecured debt securities, "bbb+" on subordinated unsecured debt securities and "bbb" on Class A preferred shares of the Group's holding company, ING Canada Inc. (TSX: IIC). All companies are domiciled in Toronto, Ontario, unless otherwise specified. The outlook for all ratings is stable.
The ratings are reflective of the Group's superior capitalization, above average profitability and leading market position within the Canadian property/casualty industry. In addition, the Group maintains strong internal investment and claims management and a knowledgeable executive management team experienced in growth through acquisitions. The Group has a competitive advantage in pricing and risk selection due to its superior size, geographic and product line diversification as well as its multi-channel distribution network and sound catastrophe management.
The FSR also considers the added financial flexibility of ING Canada Inc. as a publicly traded company. ING Canada Inc. operates under a participation agreement, spreading the net underwriting risk of the Group to each participating company, achieving a pooling effect through inter-company reinsurance.
Partially offsetting these strengths is the Group's above average investment risk exposure and market volatility, diminishing earnings trend due to weakness in the equities markets, soft market underwriting primarily in commercial lines, deterioration in its auto lines and strong competition for market share. In addition, A.M. Best is concerned about the recent legal challenge to Alberta's cap on minor injury claims and the impact this could have on pricing, profitability and the potential for similar challenges in Ontario. These concerns are partially mitigated by the Group's experienced management team, internal investment and claims management and a comprehensive reinsurance program.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
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