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) [TSX: FFH and FFH.U] (Toronto, Canada).
Concurrently, A.M. Best has affirmed the financial strength rating (FSR) of A (Excellent) and ICRs of “a” of the members of the Northbridge Companies (Toronto, Ontario), which represent Fairfax’s Canadian operations.
A.M. Best also has upgraded the FSR to A (Excellent) from A- (Excellent) and ICR to “a” from “a-“ of Northbridge Personal Insurance Corporation (Toronto, Ontario) due to its status as a member of the Northbridge Companies, which provides it with operating efficiencies, underwriting expertise and other implicit benefits such as marketing and common management.
In addition, A.M. Best has affirmed the FSR of A- (Excellent) and ICRs of “a-” of Commonwealth Insurance Company of America (CICA) (Seattle, WA), CRC Reinsurance Limited (CRC) and Wentworth Insurance Company Limited (Wentworth) (both domiciled in Barbados). CICA was a wholly owned subsidiary of Northbridge Indemnity Insurance Corporation before its January 2013 sale to an affiliate and its placement into run off. Concurrently, A.M. Best has withdrawn the ratings of CICA and CRC as Fairfax has requested that both companies no longer participate in A.M. Best’s interactive rating process.Additionally, A.M. Best has affirmed the FSRs of A (Excellent) and ICRs of “a” of the members of the Crum & Forster Insurance Group (C&F) (Morristown, NJ) and the Zenith National Insurance Group (Zenith Group) (Woodland Hills, CA), as well as the FSR of A (Excellent) and ICRs of “a+” of the members of the Seneca Insurance Group (New York, NY). At the same time, A.M. Best has affirmed the ICRs of “bbb” and the unsecured debt ratings of Zenith National Insurance Corp. (Woodland Hills, CA), an indirect wholly owned downstream holding company of Fairfax. The outlook for all ratings is stable. (See link below for a detailed listing of the companies and ratings.) The ratings of Fairfax reflect its historically favorable, albeit variable, levels of pre-tax operating and net income and its financial leverage and cash coverage levels, which are within A.M. Best’s requirements for its rating level. At December 31, 2012, Fairfax’s adjusted debt-to-total-capital level was 27.2% (excluding accumulated other comprehensive income), 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 $1.2 billion at year-end 2012, which provides additional liquidity and flexibility for the group.