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AM Best Affirms Intact Financial Corporation's Ratings with Stable Outlook

Strategic Insights

— 2 min read

Intact Financial Corporation (IFC), a leading provider of property and casualty insurance in Canada, has had its Financial Strength Rating (FSR) of A+ (Superior) and Long-Term Issuer Credit Rating (Long-Term ICRs) of "aa-" (Superior) affirmed by AM Best. The rating agency also affirmed the Long-Term ICR of "a-" (Excellent) and Long-Term Issue Credit Ratings (Long-Term IRs) of IFC, the parent holding company. The outlook for these ratings is stable.

IFC's balance sheet strength is assessed as very strong, driven by its very strong risk-adjusted capitalization, long-term capital growth, and historically favorable reserve development trends. The company's financial leverage ratios remain within AM Best guidelines and have improved through first-quarter 2025, driven by favorable net earnings and repayment of debt through 2024. IFC benefits from financial flexibility through access to Canadian and U.S. capital markets.

AM Best views IFC's operating performance as strong, driven by consistently favorable underwriting results across all geographic territories. The company's focus on the integration of Direct Line Insurance Group plc's brokered commercial lines operations, as well as continued refinement following IFC's personal lines exit in the UK&I market, are expected to enhance its operating performance further.

The ratings reflect IFC's favorable business profile, supported by its diverse product and channel offerings, strong brand name recognition, and geographic diversification. The company's enterprise risk management (ERM) program is considered appropriate, with a comprehensive risk framework that includes robust internal controls, clearly defined risk appetites and tolerances, and effective mitigation strategies.

Key Takeaways:

  • AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICRs of "aa-" (Superior) of Intact Insurance Company, the lead company of Intact Financial Corporation.
  • The ratings reflect IFC's consolidated balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile, and appropriate ERM.
  • IFC's financial leverage ratios remain within AM Best guidelines and have improved through first-quarter 2025, driven by favorable net earnings and repayment of debt through 2024.
  • The company's operating performance is considered strong, driven by consistently favorable underwriting results across all geographic territories.
  • IFC's ERM program is considered appropriate, with a comprehensive risk framework that includes robust internal controls, clearly defined risk appetites and tolerances, and effective mitigation strategies.
  • The ratings reflect IFC's favorable business profile, supported by its diverse product and channel offerings, strong brand name recognition, and geographic diversification.
  • The outlook for these ratings is stable.

Statistics:

  • IFC's risk-adjusted capitalization is very strong, as measured by Best's Capital Adequacy Ratio (BCAR).
  • The company's financial leverage ratios have improved through first-quarter 2025, driven by favorable net earnings and repayment of debt through 2024.
  • IFC's operating performance is considered strong, driven by consistently favorable underwriting results across all geographic territories.
  • The company's ERM program is considered appropriate, with a comprehensive risk framework that includes robust internal controls, clearly defined risk appetites and tolerances, and effective mitigation strategies.

Sources:

  • AM Best press release: "AM Best Affirms Ratings of Intact Financial Corporation and Its Subsidiaries with Stable Outlook"
  • AM Best Guide to Best's Credit Ratings
  • AM Best Guide to Proper Use of Best's Ratings & Assessments
  • Business Wire press release: "Intact Financial Corporation Announces Strategic Actions to Enhance Operating Performance"

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