Best Affirms SCOR Canada ‘B++’ Rating

A.M. Best Co. announced that it has affirmed the financial strength rating of “B++” (Very Good) of SCOR Canada Reinsurance Company, and has assigned the company an issuer credit rating of “bbb+.” The outlook for both ratings is positive.

“These ratings reflect SCOR Re Canada’s good capitalization, favorable operating performance and market profile,” said Best. The ratings also reflect Best’s view that SCOR Re Canada is a core operating subsidiary of its parent, France’s SCOR Group. In this respect, Best noted that it has “refined its view of core as outlined in its updated methodology on rating members of insurance groups. (See Rating Members of Insurance Groups at http://www.ambest.com/ratings/membergroups.pdf.)”

SCOR Re Canada is a prominent player in the Canadian market. Best said the “company has maintained a favorable operating performance that has resulted in a favorable return on equity over the years. This performance has been the primary source of generated capital. In addition, SCOR Re Canada has historically benefited from the financial flexibility and explicit and implicit support from the Group.

“Partially offsetting these positive rating factors is that SCOR Re Canada will be challenged going forward to maintain its positive underwriting trend in light of market softening, overall lack of diversification outside the Group in respect to its retrocession arrangements. Moreover, SCOR Re Canada may be adversely impacted by further reserve development at the Group level.”