Best Affirms Munich Re (Canada) ‘A+’ Rating; Lowers Temple

April 2, 2004

A.M. Best Co. announced that it has affirmed the financial strength rating of “A+” (Superior) of Munich Reinsurance Company of Canada (MROC) (Toronto, Ontario) with a stable outlook.

Best noted that the rating reflects MROC’s role as a core subsidiary of its parent company, Germany’s Munich Re Group. “The rating also recognizes MROC’s importance to the group and its overall integration with the parent, said Best. “MROC is the Canadian platform for the group and, as such, has achieved prominence as the reinsurance market leader in Canada. Furthermore, the rating reflects its strong capitalization and favorable operating performance, as well as the implicit and explicit support of its parent.

“Partially offsetting these positive rating factors is the group’s unsatisfactory but improving underwriting results.”

Concurrently, however Best announced that it has downgraded the financial strength rating to “A” (Excellent) from “A+” (Superior) of MROC’s affiliate, Temple Insurance Company (Toronto, Canada), and assigned a stable rating outlook.

“The rating of Temple acknowledges its strategic role to MROC and the overall Munich Re Group,” said Best. “As such, the company is rated one level below the group. Temple is positioned as a niche insurer for MROC, specializing in primary liability coverages. The rating further reflects Temple’s strong capitalization, favorable operating performance and its integration with MROC’s management structure, product focus and technical expertise.”

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