S&P Lowers Canada’s Gore Mutual Ratings to ‘BBpi’

December 3, 2004

Standard & Poor’s Ratings Services announced that it has lowered its counterparty credit and financial strength ratings on Gore Mutual Insurance Co. to ‘BBpi’ from ‘BBBpi’ (the “pi” suffix indicates the rating is based on public information).

“The rating action reflects the company’s weak operating performance, marginal liquidity, and very high geographic concentration, which are partially offset by its adequate capitalization,” stated S&P credit analyst Tom E. Thun.

Gore Mutual is an Ontario-based company headquartered in Cambridge, with regional offices in Cambridge and Vancouver, B.C. It is a small Canadian mutual insurance company writing predominantly automobile business (55 percent of direct premium written in 2003) and property business (38 percent).

S&P noted: “Gore’s geographic concentration is very high, with about 84 percent of its direct premium written in 2003 from the province of Ontario.”

Further commenting on the “pi” subscript, S&P said such ratings are based on “an analysis of an insurer’s published financial information and additional information in the public domain. They do not reflect in-depth meetings with an insurer’s management and are therefore based on less comprehensive information than ratings without a ‘pi’ subscript. Ratings with a ‘pi’ subscript are reviewed annually based on a new year’s financial statements, but may be reviewed on an interim basis if a major event that may affect the insurer’s financial security occurs. Ratings with a ‘pi’ subscript are not subject to potential CreditWatch listings.”

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