A.M. Best has affirmed the issuer credit rating (ICR) of “bbb” and the unsecured debt and preferred equity ratings of Toronto’s Fairfax Financial Holdings Limited.
At the same time, the ratings firm affirmed the financial strength rating (FSR) of A (Excellent) and ICRs of “a” of Northbridge Indemnity Insurance Corporation (NIIC) (formerly Commonwealth Insurance Company), Federated Insurance Company of Canada, Northbridge Commercial Insurance Corporation (formerly Markel Insurance Company of Canada), Northbridge General Insurance Corporation (formerly Lombard General Insurance Company of Canada) and Zenith Insurance Company.
Also, A.M. Best has affirmed the FSR of A- (Excellent) and ICR of “a-”of Northbridge Personal Insurance Corporation (formerly Lombard Insurance Company). In addition, A.M. Best has downgraded the FSR to A- (Excellent) from A (Excellent) and ICR to “a-” from “a” of Commonwealth Insurance Company of America (CICA), a wholly owned subsidiary of NIIC.
A.M. Best said the ratings of Fairfax reflect its historical favorable levels of pre-tax operating and net income and the company’s financial leverage and cash coverage levels that are within A.M. Best’s requirements for its rating level. At December 31, 2011, Fairfax’s adjusted debt-to-total-capital level was 32%, which includes the debt of its subsidiaries that are capable of supporting their own debt. In addition, Fairfax maintained holding company cash and investments of approximately $1.0 billion at year-end 2011.
In addition, A.M. Best made ratings actions to several of Fairfax’s U.S. holdings, notably:
- The FSRs of A (Excellent) and ICRs of “a” of the Crum & Forster Insurance Group (C&F) (Morristown, NJ) and Zenith National Insurance Group (Zenith Group) (Woodland Hills, CA) and their property/casualty members were affirmed.
- Affirmed the FSR of A (Excellent) and ICRs of “a+” of Seneca Insurance Group (New York, NY) and its property/casualty members.
- Downgraded the FSR to A- (Excellent) from A (Excellent) and the ICR to “a-” from “a” of CRC Reinsurance Limited (CRC) and affirmed the FSR of A- (Excellent) and the ICR of “a-” of Wentworth Insurance Company Limited (Wentworth) (both domiciled in Barbados).
- Affirmed the FSRs of B++ (Good) and the ICRs of “bbb” of Fairmont Specialty Group (Manchester, NH), its property/casualty members and General Fidelity Insurance Company (Charleston, SC). Fairmont Specialty Group and its members are no longer associated with the Fairmont Specialty brand, which is used by several C&F rating units.
- Affirmed the FSR of B+ (Good) and the ICR of “bbb-” of TIG Insurance Company (Manchester, NH).
- Downgraded the FSR to B+ (Good) from B++ (Good) and the ICR to “bbb-” from “bbb+” of Clearwater Insurance Company (headquartered in Stamford, CT). The outlook for the ICR has been revised to stable from negative, while the outlook for the FSR is stable.
- Affirmed the ICRs of “bbb” and the unsecured debt ratings of Crum & Forster Holdings Corp. (Morristown, NJ) and Zenith National Insurance Corp. (Woodland Hills, CA), both are indirect, wholly owned, downstream holding companies of Fairfax. The outlook for all ratings is stable, except where otherwise specified.