AM Best Removes from Under Review with Positive Implications and Upgrades Credit Ratings of The Guarantee Company of North America and Its Subsidiary

Producers Careers Specialty Solutions Canada

Affirms Ratings of Intact Insurance Company and Remaining Subsidiaries

News Release

April 27, 2020

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has removed from under review with positive implications and upgraded the Financial Strength Rating (FSR) to A+ (Superior) from A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “aa-” from “a” of The Guarantee Company of North America (GCNA) and its subsidiary, The Guarantee Company of North America USA (GCNA USA) (Southfield, MI) which are newly added members to Intact Financial Corporation (Intact Financial). The outlook assigned to these Credit Ratings (ratings) is stable.

Concurrently, AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICR of “aa-” of Intact Insurance Company and the remaining subsidiaries of Intact Financial. In addition, AM Best has affirmed the Long-Term ICR of “a-” and the Long-Term Issue Credit Ratings (Long-Term IRs) of the parent holding company, Intact Financial [TSX: IFC]. The outlook of these ratings remains stable. Concurrently, AM Best has assigned a Long-Term IR of “a-” to Intact Financial’s recently issued CAD 300 million, Series 8, 3.691% senior unsecured medium-term notes, due March 24, 2025. The outlook assigned to this rating is stable.

At the same time, AM Best has affirmed the Long-Term ICR of “a-” and the Long-Term IR of Intact U.S. Holdings, Inc. (Delaware). Lastly, AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICR of “aa-” of IFC’s separately rated member, Intact Farm Insurance Inc. (Intact Assurance agricole) (Quebec). The outlook of these ratings remains stable. (Please see link below for a detailed list of the companies and Long-Term IRs.) All companies are domiciled in Ontario, Canada, unless otherwise specified.

The ratings reflect Intact Financial’s consolidated balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The ratings of Intact Assurance agricole reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate ERM.

Intact Financial maintains very strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). Strong pre-tax operating earnings have outperformed the industry composite over the most-recent five-year period, with operating earnings driven by net investment income and augmented by underwriting income. The favorable business profile reflects Intact Financial’s position as Canada’s largest insurer of homes, autos and businesses, with strong brand name recognition and multichannel distribution capabilities across Canada.

The rating upgrades of GCNA and GCNA USA reflect their strategic importance to, and strategic alignment with Intact Financial. With the acquisition of Atlantic Specialty Insurance Company in late 2017, followed by the GCNA and GCNA USA acquisitions in 2019, IFC has become a leading provider of specialty insurance within North America. These acquisitions highlight Intact Financial’s ability to leverage its position to take advantage of opportunities as they arise within the industry, while further bolstering its product portfolio. The acquisition of GCNA further strengthens IFC’s leadership position in Canada while enhancing IFC’s surety platform in Canada and in the United States. The acquisition also adds public entity capabilities while expanding personal lines offerings to include high net worth products in Canada.

Intact Assurance agricole maintains very strong risk-adjusted capitalization, as measured by BCAR. Strong pre-tax operating earnings have outperformed the property industry composite by a wide margin over the most-recent five-year period, with operating earnings driven by underwriting income and augmented by net investment income. Intact Assurance agricole maintains strong brand name recognition, writing agricultural risks in Quebec.

A complete listing of the members of Intact Financial Corporation’s FSRs, Long-Term ICRs and Long-Term IRs also is available.

Intact Insurance Specialty Solutions is the marketing brand for the insurance company subsidiaries of Intact Insurance Group USA LLC. Coverages may be underwritten by one of the following insurance companies: Atlantic Specialty Insurance Company, a New York insurer; Homeland Insurance Company of New York, a New York insurer; Homeland Insurance Company of Delaware, a Delaware insurer; OBI America Insurance Company, a Pennsylvania insurer; OBI National Insurance Company, a Pennsylvania insurer; or The Guarantee Company of North America USA, a Michigan insurer. Each of these insurers maintains its principal place of business at 605 Highway 169 N, Plymouth, MN 55441, except The Guarantee Company of North America USA, which is located at One Towne Square, Southfield, MI 48076. This material is intended as a general description of certain types of insurance coverages and services. Coverages and availability vary by state; exclusions and deductibles may apply. Please refer to your insurance policy or consult with your independent insurance advisor for information about coverages, terms and conditions. Some coverage may be written by a surplus lines insurer through a licensed surplus lines broker. Surplus lines insurers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds.