A.M. Best Affirms Ratings of Several of AXA Canada Inc.'s Subsidiaries; Assigns Rating to InnoVassur, Assurances generales inc.OLDWICK, N.J. -- A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength ratings (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of several of AXA AXA Anguilla, Anguilla (Airport Code) AXA Alpha Chi Alpha AXA Animal Crossing Ahead (online forum community/guide to the game Animal Crossing) AXA Auxiliary Artery Canada Inc.'s property/casualty insurance subsidiaries. A.M. Best has affirmed the FSR of A (Excellent) of AXA Assurances Inc. (Montreal, Quebec) and its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , AXA Assurances agricoles inc. (Montreal, Quebec). A.M. Best has also affirmed the FSR of A- (Excellent) of AXA Insurance (Canada) (Ontario), AXA Pacific Insurance Company (British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography ) and Anglo Canada General Insurance Company (Ontario) and the FSR of B++ (Very Good) of the Insurance Corporation of Newfoundland, Limited (ICON) (Newfoundland). The outlook for these ratings has been revised to stable from negative. Furthermore, A.M. Best has assigned an FSR of A- (Excellent) to InnovAssur, Assurances generales inc. (Montreal, Quebec). The outlook for this rating is stable. In addition, the FSR for Citadel General Assurance Company (Ontario) has been changed to NR-3 (Rating Procedure Inapplicable in·ap·pli·ca·ble adj. Not applicable: rules inapplicable to day students. in·ap ) from B++ (Very Good) and removed from under review with developing implications. The affirmation A solemn and formal declaration of the truth of a statement, such as an Affidavit or the actual or prospective testimony of a witness or a party that takes the place of an oath. An affirmation is also used when a person cannot take an oath because of religious convictions. of AXA Assurances Inc.'s rating is reflective of its excellent capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. , which is enhanced and protected by an historically profitable operating performance; diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. by product line; conservative investment portfolio; stable reserve development; a comprehensive reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. program; strong experienced management team; and market leadership position in the Canadian property and casualty industry. In addition, the rating takes into consideration A.M. Best's favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. view of AXA Canada's plans to integrate Citadel General Assurance Company into AXA Assurances Inc. and several of its subsidiaries at the end of the second quarter of 2006. These positive rating factors are offset in part by the geographic concentration of the company's own book; above average expense ratio; below average investment returns; more competitive pricing pressures; potential dividend payments, which could hamper surplus growth; and the challenges the company faces in completing the integration process. These risks are partially mitigated by AXA Canada's strong experienced management team and the geographic diversification of the company's property/casualty insurance subsidiaries. The rating affirmation of AXA Assurances agricoles inc. is based upon its group rating status with its parent. The affirmation of the ratings of AXA Insurance (Canada), AXA Pacific Insurance Company and Anglo Canada General Insurance Company are based upon their excellent levels of capitalization; favorable underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. leverage; improvement in underwriting and operating performance over the last three years; strong broker relations; corporate reinsurance protection; the explicit financial support of AXA Assurances Inc.; and the synergies they derive from being part of the AXA Canada Group. These strengths are partially offset by their historical operating performance, which has been below average; the current downturn in the underwriting cycle placing pressure on pricing; rate restrictions imposed by regulators on the automobile insurance product in most provinces in Canada; and potential dividend payments. The affirmation of ICON's rating is based upon its historically strong profitability; leading market position as one of the top five property/casualty insurance companies in Newfoundland; the benefits from participating in the corporate reinsurance program, which includes external and internal reinsurance treaties Reinsurance Treaty (June 18, 1887) Secret agreement between Germany and Russia. Arranged by Otto von Bismarck after the collapse of the Three Emperors' League, it provided that each party would remain neutral if either became involved in a war with a third nation, and that providing surplus protection and capacity; and the explicit financial support of its parent. These positive factors are partially offset by ICON's weak risk-adjusted capitalization relative to its rating, below average investment returns, concentration of risk in personal lines in Newfoundland and the uncertainty surrounding the long-term benefits of regulatory changes to the automobile insurance product in that province. The rating assignment for InnovAssur, Assurances generales inc. reflects its excellent capitalization, strong liquid balance sheet, improving operating performance, conservative reserve philosophy, favorable business environment, its strategic role within the AXA Canada group and the explicit financial support of its parent. These strengths are partially offset by the company's geographic and product line concentration and historically below average profitability. The revision in the rating to NR-3 (Rating Procedure Inapplicable) from B++ (Very Good) of Citadel General Assurance Company is based upon the integration of this company into AXA Assurances Inc. and several of its subsidiaries at the end of the second quarter of 2006. This action will effectively result in creating a shell company with no insurance risk or liabilities on its balance sheet. At that time, the company will cease active operations. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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