A.M. Best Upgrades Ratings of Coachman Insurance Company.

OLDWICK, N.J. -- A.M. Best Co. has upgraded the financial strength rating (FSR) to B++ (Good) from B (Fair) and issuer credit rating (ICR) to "bbb" from "bb+" of Coachman Insurance Company (Coachman) (Ontario, Canada). The outlook has been revised to stable from positive.

Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and ICR of "a-" of SGI CANADA (SGI) (Saskatchewan, Canada). Additionally, A.M. Best has affirmed the FSR of B++ (Good) and ICR of "bbb+" of SGI CANADA Insurance Services Limited (SCISL) (Saskatchewan, Canada). A.M. Best also has affirmed the FSR of B++ (Good) and ICR of "bbb" of SCISL's majority owned subsidiary, The Insurance Company of Prince Edward Island (ICPEI) (Prince Edward Island, Canada). The outlook for these ratings is stable. All companies are subsidiaries of SGI.

Coachman is a niche automobile writer in Ontario, and is a wholly owned subsidiary of SCISL. The rating upgrades are reflective of Coachman's excellent risk-adjusted capitalization, improved profitability and the explicit financial support of SGI.

These positive rating factors are partially offset by Coachman's exposure to the volatile Ontario automobile market, strong competitive market pressure, rising claims cost inflation and volatility in the investment markets. However, the company has shown excellent profitability ratios over the last few years and benefits from operational support and reinsurance protection from SGI.

The rating affirmations of SGI, SCISL and ICPEI are reflective of their relative risk-adjusted capitalization, modest leverage positions, historical profitability and business profiles within their respective markets. These companies' face challenges that are similar to Coachman's in addition to risks associated with expansion into new territories and a trend of more frequent and severe weather-related events across Canada. However, SGI provides both internal and external reinsurance to help protect surplus and provide capacity.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors, which may have been considered, can be found at www.ambest.com/ratings/methodology.

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.