A.M. Best Co.
has affirmed the issuer credit rating (ICR) of “bbb” and the unsecured debt and preferred equity ratings of
Fairfax Financial Holdings Limited
(Fairfax) (Toronto, Ontario) (TSX: FFH and FFH.U). Additionally, A.M. Best has affirmed the ICR of “bbb” and unsecured debt rating of
Crum & Forster Holdings Corp.
(Morristown, NJ), an indirect, wholly owned, downstream holding company of Fairfax.
A.M. Best also has upgraded the ICRs to “a+” from “a” and affirmed the financial strength rating (FSR) of A (Excellent) of
Seneca Insurance Group
(Seneca) (New York, NY) and its property/casualty members. In addition, A.M. Best has affirmed the FSR of A (Excellent) and ICRs of “a” of
Crum & Forster Insurance Group
(Crum & Forster) (Morristown, NJ) and its property/casualty members.
At the same time, A.M. Best has affirmed the FSR of B+ (Good) and ICRs of “bbb-” and the FSR of B++ (Good) and ICRs of “bbb” of
TIG Insurance Group
Fairmont Specialty Group
(Fairmont) (both of Manchester, NH), and their property/casualty members, respectively, which are both in run-off. The outlook for all ratings is stable. (See link below for a detailed listing of the companies and ratings).
The ratings of Seneca reflect its consistently better-than-average underwriting and operating performance, which has been sustained over many years; strong level of risk-adjusted capitalization and management of loss reserves that has resulted in favorable development of prior years’ loss reserves.
Partially offsetting these positive factors are Seneca’s above-average level of expenses relative to premiums and a five-year average investment yield that lags that of its commercial casualty peer group, although Seneca’s yield improved in 2009.
The ratings of Crum & Forster recognize its underwriting performance (as reflected in its better-than-average loss and loss adjustment expense levels); its diversified product portfolio; favorable development of recent accident years’ loss reserves; reduced reliance on finite reinsurance; and risk-adjusted capital levels that are well-supportive of the ratings. Crum & Forster’s ratings also reflect the support of Fairfax.