OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has removed from under review with negative implications and affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb” of The Insurance Company of Prince Edward Island (ICPEI) (Prince Edward Island, Canada). The outlook assigned to both ratings is stable.
The ratings of ICPEI were placed under review with negative implications in April 2014 following the disclosure that EGI Financial Holdings Inc. (EFH) (TSX:EFH) had entered into a definitive agreement with SGI Canada (SGI) to acquire SGI’s share of ICPEI.
The rating actions follow the completion of the acquisition and A.M. Best’s discussions with the new majority owner, EFH, regarding new management plans for ICPEI. The rating affirmations for ICPEI are based upon its good risk-adjusted capitalization and generally favorable operating performance. The affirmations also reflect the implicit and explicit support ICPEI will now receive from EFH, including investment and actuarial guidance as well as reinsurance protection.
These positive rating factors are partially offset by ICPEI’s exposure to weather-related catastrophe losses and its geographic concentration in the Canadian Maritime provinces.
Negative rating pressure could occur if there is deterioration in ICPEI’s risk-adjusted capitalization or an unfavorable earnings trend develops. Upward rating movement is not likely in the near term.
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. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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