Jul 26, 2012 – Standard & Poor’s has assigned its long-term ‘A’ counterparty credit and financial strength ratings to Chartis Insurance Company of Canada, a core subsidiary of the Chartis group, ultimately owned by AIG. S&P also noted that the outlook is stable.
“The ratings reflect the core status of Chartis Canada to the Chartis Group –we rate the group’s core operating companies ‘A/Stable’ –through the company’s material contribution to the group (in form of dividend) and to the group’s strategy of bolstering its global franchise by geographical diversification and expanding its product offerings to Chartis’ global business,” said Standard & Poor’s credit analyst Patricia Kwan in a statement. “Chartis Canada is strongly integrated with and receives significant support from the wider group.”
S&P said the ratings also reflect “Chartis Canada’s strong competitive position in Canada’s nonlife insurance market, its strong capital, and strong operating earnings.”
The rating agency said Chartis Canada faces limited overall opportunity for growth due to Canada’s challenging market.
“Notwithstanding its track record of strong operating performance, the company is susceptible to earnings volatility due, in part, to reserves development and higher expected losses,” said the rating notice.
“We view Chartis Canada’s competitive position as “strong”. The company ranks sixth in overall commercial market share, with top 5 or better position in lines comprising over 65% of its book in commercial property, liability, and accident and health.”
“We believe Chartis Canada’s growth opportunities are somewhat constrained by the size of the Canadian market and the abundance of capacity due to the continuous entry of new competitors. While the Canadian insurance market remains profitable, we believe the competitive landscape will limit Chartis Canada’s market position in the next couple of years,” S&P added.
Chartis is a world leading property-casualty and general insurance organization serving more than 70 million clients around the world. With one of the industry’s most extensive ranges of products and services, deep claims expertise and excellent financial strength, Chartis enables its commercial and personal insurance clients alike to manage virtually any risk with confidence. Chartis is the marketing name for the worldwide property-casualty and general insurance operations of Chartis Inc. www.chartisinsurance.com