August 20, 2021
AM Best Upgrades Credit Ratings of Canal Insurance Company and Canal Indemnity Company
OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Ratings to “a-” (Excellent) from “bbb+” (Good) of Canal Insurance Company and Canal Indemnity Company, collectively referred to as Canal Group (Canal). The outlook of the Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect Canal’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The rating upgrades reflect Canal’s much improved operational performance, which is the result of re-underwriting initiatives introduced by management several years ago that are now being manifested in the group’s reported results over the past few years. The much improved results of late also take into consideration management’s more conservative reserving practices and the elimination of prior-year loss reserve development, which was a drag on earnings in previous years.
Canal’s business profile remains limited, given that the company is a monoline commercial automobile insurer, yet the group benefits from its specialty niche orientation, well-recognized brand and its long-standing broker distribution network. Canal’s balance sheet is assessed at very strong but is viewed as containing somewhat more volatile risk due to its higher-than-average investment in equities, as evidenced in 2020.
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 use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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