AM Best has revised the outlooks to positive from stable and affirmed the financial strength rating of B++ (good) and the long-term issuer credit ratings of “bbb+” of Canal Insurance Company and Canal Indemnity Company, collectively referred to as Canal Group. Both companies are domiciled in Greenville, S.C.
The credit ratings reflect Canal’s balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.
The positive outlooks are based on the group’s much-improved accident- and calendar-year results over the past several years and a myriad of corrective actions taken by Canal over an extended period. Among the more pronounced actions taken include re-underwriting initiatives (i.e., pricing and business mix), multiyear reserve strengthening, the discontinuation of unprofitable territories and agents, eliminating noncore lines of business and improvements to underwriting sophistication and discipline.
As a result, underwriting and operating results now are moving to levels that potentially could change AM Best’s assessment of operating performance to appropriate from marginal in the near to midterm. The revised outlooks also consider expectations of a similar trend through 2020.
Source: AM Best
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