A.M. Best Removes Ratings of Aviva Insurance Company of Canada and Its
Affiliates From Under Review
OLDWICK, N.J. -- October 31, 2012
A.M. Best Co. has removed from under review with negative implications and
affirmed the financial strength rating (FSR) of A (Excellent) and issuer
credit ratings (ICR) of “a+” of Aviva Insurance Company of Canada and its
affiliates, Elite Insurance Company, Traders General Insurance Company, Pilot
Insurance Company, Scottish & York Insurance Company, Limited and S&Y
Insurance Company. The outlook assigned to the FSR is stable, while the
outlook assigned to the ICRs is negative. These companies are insurance
subsidiaries of their ultimate parent company, AVIVA plc (United Kingdom).
In June 2012, A.M. Best maintained the under review status for Aviva Insurance
Company of Canada and its affiliates’ ratings due to its strategic evaluation
of Aviva plc’s businesses and changes to its senior management, especially the
departure of the chief executive officer.
The main drivers for the rating affirmations are AVIVA plc’s improving
risk-adjusted capitalization as at June 2012, significant measures put in
place by the parent to improve financial performance and the ultimate capital
position in the medium term by narrowing AVIVA plc’s business profile. A.M.
Best expects that the stability of senior management and its strategic plans
will be prioritized by any new chief executive officer appointed in 2013.
The outlook assigned to the ICRs is negative as A.M. Best believes that the
execution risks associated with AVIVA plc’s plan to exit or restructure some
business segments is high in the current economic environment, since the group
is likely to experience temporary pressure in earnings and the full results of
the plan are not expected to be seen before the end of 2014. A.M. Best notes
that AVIVA plc’s extension of its debt de-leveraging timetable also has a
bearing on the ICRs’ negative outlook.
Aviva Insurance Company of Canada and its affiliates’ ratings continue to
reflect their leading position in the property/casualty market, along with
their continued strong operating performance.
The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Key criteria utilized include: “Risk Management and the Rating
Process for Insurance Companies”; “Understanding BCAR for Canadian
Property/Casualty Insurers”; “Catastrophe Analysis in A.M. Best Ratings”; and
“Rating Members of Insurance Groups.” Best’s Credit Rating Methodology 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. For more information,
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Co.
Jacqalene Catrino Lentz, (908) 439-2200, ext. 5762
Senior Financial Analyst
Greg Williams, (908) 439-2200, ext. 5815
Managing Senior Financial Analyst
Rachelle Morrow, (908) 439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, (908) 439-2200, ext. 5644
Assistant Vice President, Public Relations
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