OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has removed from under review with negative implications and downgraded the Financial Strength Rating to B+ (Good) from B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb-” from “bbb” of The Insurance Company of Prince Edward Island (ICPEI) (Prince Edward Island, Canada). Additionally, AM Best has removed from under review with negative implications and downgraded the Long-Term ICR to “bb-” from “bb+” of ICPEI’s publicly traded parent, Echelon Financial Holdings Inc. (EFH) (Mississauga, Ontario) [TSX: EFH]. The outlook assigned to these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn the ratings in response to the companies’ request to no longer participate in AM Best’s interactive rating process.
The ratings reflect ICPEI’s balance sheet strength, which AM Best categorizes as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The rating downgrades consider the recently completed transaction whereby EFH sold a larger insurance entity (Echelon Insurance), removing support and synergies that had benefited ICPEI’s ratings previously. ICPEI’s ratings also consider the company’s adequate balance sheet strength, which is offset somewhat by its exposure to weather-related catastrophe losses and its narrow geographic concentration in the Canadian Maritime provinces.
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