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A.M. Best Affirms and
Assigns Ratings to Wawanesa Insurance Companies
OLDWICK, N.J., OCTOBER 25, 2007
A.M. Best Co. has
affirmed the financial strength rating (FSR) of A+ (Superior) and
assigned issuer credit ratings (ICR) of "aa" to The Wawanesa
Mutual Insurance Company (WMIC) (Winnipeg) and The Wawanesa
Mutual Insurance Company (United States Branch). Additionally,
A.M. Best has affirmed the FSR of A (Excellent) and assigned an ICR
of "a" to WMIC's wholly owned life/health subsidiary, The
Wawanesa Life Insurance Company (Wawanesa Life) (Winnipeg). The
outlook for the FSRs is stable, and the outlook assigned to the ICRs
is stable.
A.M. Best also has affirmed the FSR of A+
(Superior) and assigned an ICR of "aa-" to WMIC's wholly owned
subsidiary, Wawanesa General Insurance Company (WGIC) (San
Diego, CA). The outlook for the FSR has been revised to negative
from stable, and the outlook assigned to the ICR is negative.
The ratings of WMIC are based on its superior level of
capitalization and strong, liquid balance sheet supported by
profitable operating performance, geographic diversification and its
market position among the Canadian property/casualty insurance
industry leaders, as well as WMIC's diversified product mix and
experienced management team.
These rating strengths are
offset in part by the challenges WMIC faces in the personal lines
automobile market due to regulatory reforms, increasing claims
frequency, increased competitive pricing pressures mainly on
commercial lines business and the weaker capitalization and
operating performance of WGIC in the United States.
WGIC's
revised rating outlook is due to a decline in its risk-adjusted
capitalization and a continuance of its below average operating
performance, which are not consistent with its current ratings.
Partially offsetting these rating weaknesses is the explicit
financial support of WGIC's Superior rated parent, WMIC, and WGIC's
competitive marketing strategies as a direct writer in the
California personal auto and property markets.
The ratings of
Wawanesa Life recognize its strong risk-adjusted capital position,
profitable operations and the support it receives from WMIC through
shared management, operating platforms and common customer base.
Wawanesa Life continues to compete in markets dominated by
considerably larger players, which have significant economies of
scale to drive down unit costs.
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.
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