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FOR IMMEDIATE RELEASE
OLDWICK - MARCH 04, 2020 12:45 PM (EST)
AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb+” of Echelon Insurance (Echelon) (Mississauga, Ontario). The outlook assigned to the Long-Term ICR is negative, while the outlook assigned to the FSR is stable.
These Credit Ratings (ratings) reflect Echelon’s balance sheet strength, which AM Best categorizes as strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM). The negative outlook on the Long-Term ICR reflects the projected downturn in risk-adjusted capitalization, which could weaken balance sheet strength given the impact of the company’s planned premium growth combined with the expiration of quota share reinsurance at year-end 2020. The outlooks reflect Echelon’s balance sheet strength assessment level of strong, inclusive of the benefits derived from its parent, CAA Club Group, marginal operating performance as evidenced by the variability in pre-tax operating earnings over the recent five-year period, and neutral business profile operating as a niche specialty insurer within Canada’s property and casualty marketplace.
AM Best will continue to monitor CAA Club Group’s strategic initiatives for developments with Echelon and the overall impact on Echelon’s prospective balance sheet strength, operating performance, business profile and ERM.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.