S&P Raises Canada’s Co-Operators General Ratings to ‘BBB+’

Standard & Poor’s Ratings Services announced that it has raised its long-term counterparty credit and financial strength ratings on Guelph, Ont.-based Co-operators General Insurance Co. (CGIC) to ‘BBB+’ from ‘BBB’.

S&P also said it has “raised its Canadian national scale preferred stock rating on the company to ‘P-3(High)’ from ‘P-3’ and its global scale preferred stock rating to ‘BB+’ from ‘BB’.” The rating outlook is stable

“The insurer financial strength rating on CGIC reflects its position as one of Canada’s larger property and casualty insurers; its diversified mix of personal and commercial products; the strength of its sister organization, Co-operators Life Insurance Co.; its strong ties to the co-operative/credit union system; and its strong capitalization, asset quality, and liquidity,” explained S&P credit analyst Foster Cheng.

“CGIC’s much improved operating performance is attributed to the general improvement within the sector, and to internal changes brought about by a new CEO and executive team that took over in 2001,” S&P’s analysis continued. “The company’s customer relationship management and multiproduct strategy are gaining traction, as client satisfaction is at an all-time high and customer retention remains stable.

“CGIC is viewed as a core subsidiary of The Co-operators Group Ltd. The challenges facing the company include the cyclical nature of this sector’s operating performance, a very competitive business environment, the commodity-like nature of CGIC’s products, and the consolidation occurring in the insurance and financial services industry.

“The stable outlook on CGIC reflects Standard & Poor’s expectation the company will continue to experience strong and consistent operating performance. The company’s ties to the co-operative/credit union system are viewed as a competitive advantage; this, together with the company’s diversified mix of products, should help business franchise growth.”