AM Best Revises Issuer Credit Rating Outlook to Stable for Echelon Insurance
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OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has revised the outlook to stable from negative for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term ICR of “bbb+” of Echelon Insurance (Echelon) (Mississauga, Ontario). The outlook of the FSR is stable.
The stable outlooks on Echelon’s Credit Ratings (ratings) reflect actions made with the support of its parent company, CAA Club Group, to sustain very strong risk-adjusted capitalization over the near term, as measured by Best’s Capital Adequacy Ratio (BCAR). including additional capital contributions and enhancements to its reinsurance program to manage growth. Additionally, the company reported notable improvements in underwriting results through 2020.
The ratings reflect Echelon’s balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management. Echelon continues to improve the balance between its personal and commercial products, as well as reduce the concentration to the Ontario Specialty auto business. Capital contributions from the parent and improved underwriting performance have driven growth in shareholders’ equity and supported risk-adjusted capitalization. However, the premium growth forecast negatively impacts projections in risk-adjusted capitalization, which could weaken the overall balance sheet strength. Echelon benefits from the financial strength of CAA Club Group and the continued integration into the parent’s operations and systems.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
Keith Behrmann, CFA, CAIA, ChFC, CLU
Senior Financial Analyst
+1 908 439 2200, ext. 5733
Manager, Public Relations
+1 908 439 2200, ext. 5159
Raymond Thomson, CPCU, ARe, ARM
+1 908 439 2200, ext. 5621
+1 908 439 2200, ext. 5644
Source: AM Best
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