AM Best Affirms Credit Ratings of Fairfax Financial Holdings Limited and Its Core Subsidiaries
AM Best has affirmed the Long-Term Issuer Credit Rating (Long-Term ICR) of bbb and the various Long-Term Issue Credit Ratings (Long-Term IR) on the unsecured debt and preferred equity of Fairfax Financial Holdings Limited (Fairfax) (Toronto, Canada).
AM Best has affirmed the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb” and the various Long-Term Issue Credit Ratings (Long-Term IR) on the unsecured debt and preferred equity of Fairfax Financial Holdings Limited (Fairfax) (Toronto, Canada). AM Best also has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICRs of “a+” of the subsidiaries of Odyssey Group Holdings, Inc. (Odyssey Group). Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a” of the members of the Crum & Forster Insurance Group (C&F), the members of the Zenith National Insurance Group (Zenith Group), the members of Northbridge Financial Corporation (Northbridge) (Toronto, Canada) and Wentworth Insurance Company Limited (Wentworth) (Barbados). In addition, AM Best has affirmed the Long-Term ICRs of “bbb” and the Long-Term IRs of Zenith National Insurance Corp. (headquartered in Woodland Hills, CA) and Fairfax (US) Inc. (Delaware), both of which are indirectly, wholly owned downstream holding companies of Fairfax. The outlook of all of these Credit Ratings (ratings) is stable. (See link below for a detailed listing of the companies and ratings.)
The ratings of Odyssey Group reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings also reflect group member Odyssey Reinsurance Company’s (Odyssey Re) ranking among AM Best’s top global reinsurers, supported by the group’s diversified global geographic footprint, which includes reinsurance and specialty primary insurance, large-line capacity and broad product offerings. Somewhat offsetting these strengths is Odyssey Re’s challenging operating environment, with the uncertainty brought by the current COVID-19 pandemic developments.
The ratings of C&F reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM. The ratings also reflect the benefits the group derives from its role within the larger Fairfax enterprise. C&F also benefits from its diversified and growing product portfolio and distribution networks. Management continues to focus on growth in its specialty business at appropriate rates, terms and conditions. Partially offsetting these positive rating factors are the competitive market conditions that persist in the commercial lines sector and relatively unfavorable expense levels.
The ratings of the Zenith Group reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM. The ratings also are enhanced by the benefits the group derives from its position in the Fairfax enterprise. Furthermore, the ratings reflect management’s expertise and commitment to maintaining underwriting discipline throughout market cycles. Zenith’s underwriting performance over many years has outperformed the workers compensation market. Somewhat offsetting these positive rating factors is Zenith’s concentration of written premium in California and Florida, as well as the job market impact caused by the COVID-19 reducing payrolls.
The ratings of Northbridge reflect the group’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM. The ratings of Northbridge also acknowledge the group’s position within Canada’s commercial insurance market, diversified commercial lines franchise and strong broker distribution network. The group continues to benefit from improved and strong underwriting performance within its small to mid-market commercial segment. Partially offsetting these positive rating factors are competitive market conditions that persist in Canada’s commercial and personal lines segments, and the group’s relatively unfavorable expense levels.
The ratings of Wentworth reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings also are enhanced by the benefits it derives from its position in the Fairfax enterprise. In addition, the ratings of Wentworth are supported by its historically profitable underwriting performance and loss reserve position. The company benefits from its investment portfolio, which includes a significant allocation of cash and short-term securities. Partially offsetting these positive rating factors is the company’s concentration of property catastrophe exposure within its book of business, which subjects it to a substantial degree of volatility as evidenced over the past few years.
A complete listing of Fairfax Financial Holdings Limited and its subsidiaries’ FSRs, Long-Term ICRs and Long-Term IRs also is available.
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.
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