OLDWICK, N.J., SEPTEMBER 06, 2011
A.M. Best Co. has assigned a financial strength rating of A (Excellent) and issuer credit rating of “a” to Grain Insurance and Guarantee Company (Grain) (Manitoba, Canada). The outlook assigned to both ratings is stable.
The ratings reflect Grain’s continued solid operating results, strong risk-adjusted capitalization and favorable reserve development on both an accident and calendar year basis. In addition, Grain has a long-standing market presence, historically steady investment stream and a seasoned management team.
Partially offsetting these positive rating factors are the continued competitive pricing pressures throughout Canada, particularly in commercial lines, which affect the rate adequacies in the market, an elevated expense ratio, as well as Grain’s susceptibility to catastrophic events in the territories in which it operates.
Grain’s management continues to monitor and improve its performance, underwriting guidelines and rate adequacies. Indications are favorable as its book of business provides balance with sustained performance in several key financial measures, including operating earnings, net investment income and reserve development. While overall surplus appreciation has been somewhat dampened by dividends paid to shareholders, Grain’s risk-adjusted capitalization remains solid. Management continues to demonstrate its ability to effectively operate through various insurance cycles and a rapidly changing investment market.
The principal methodology used in determining these ratings is Best’s Credit Rating Methodology – Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies” and “Understanding BCAR for Canadian Property/Casualty Insurers.” Methodologies can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.
