A.M. Best Removes From Under Review and Affirms Ratings of Intact Insurance Group and Its Members

OLDWICK, N.J.--(BUSINESS WIRE)--

A.M. Best Co. has removed from under review with negative implications and affirmed the financial strength ratings (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa-” of Intact Insurance Group (Intact Group) and its members, Belair Insurance Company Inc. (Quebec), Intact Insurance Company, Novex Insurance Company, The Nordic Insurance Company of Canada and Trafalgar Insurance Company of Canada. All companies are domiciled in Ontario, unless otherwise specified.

Concurrently, A.M. Best has removed from under review with developing implications and upgraded the FSR to A+ (Superior) from A (Excellent) and the ICR to “aa-” from “a+” of newly added Intact Group members, AXA Assurances inc. (Quebec), AXA Insurance (Canada) (Ontario), and AXA Pacific Insurance Company (Toronto). A.M. Best also has removed from under review with developing implications and upgraded the FSR to A+ (Superior) from A (Excellent) and the ICR to “aa-” from “a+” of Intact Assurances agricoles inc. (formerly AXA Assurances agricoles inc.) (Quebec). A.M. Best also has removed from under review with developing implications and affirmed the FSR of A (Excellent) and the ICR of “a+” of AXA General Insurance (Ontario). In addition, A.M. Best has removed from under review with developing implications and affirmed the FSR of A- (Excellent) and the ICR of “a-” of InnovAssur, assurances générales inc. (Quebec).

Additionally, A.M. Best has removed from under review with negative implications and affirmed the ICR of “a-” as well as all debt ratings of Intact Financial Corporation (IFC) [TSX: IFC]. (Please see below for a detailed listing of the debt ratings.) The outlook assigned to all ratings is stable.

Finally, A.M. Best has removed from under review and withdrawn the ICR of “bbb+” of AXA Canada Inc.

The ratings reflect the Intact group's superior risk-adjusted capitalization, leading market position within the Canadian property/casualty insurance industry, improved financial leverage position of IFC since closing on the purchase of the AXA Canada Group of companies, and the continued success with the integration of AXA's approximately $2.0 billion in direct premiums.

The rating upgrades for AXA Assurances inc., AXA Insurance (Canada) and AXA Pacific Insurance Company reflect each company's full integration into the group's operations and strategic plans through the participation agreement, Intact's internal reinsurance treaty.

The rating upgrades for Intact Assurances agricoles inc. reflect the company's superior risk-adjusted capitalization, expertise in farm property and liability insurance in Quebec, favorable earnings over the last five years and quality surplus protection and synergies with the parent, such as its corporate reinsurance program. Partially offsetting these positive rating factors is Intact Assurances agricoles inc.'s concentration of farm risk in Quebec, soft commercial lines market and growth through the assumption of Intact Insurance's farm business.

The rating affirmation of AXA General Insurance reflects its good risk-adjusted capitalization and continued positive earnings trend. Although the company is fully integrated into IFC's operations and strategic plan, AXA General Insurance is scheduled to merge with Novex (a member of Intact Insurance Group) on May 1, 2012, pending OSFI approval.

The following debt ratings have been removed from under review with negative implications and affirmed with a stable outlook:

Intact Financial Corporation—

-- “a-” on CAD 250 million, Series 1, 5.41% senior unsecured medium-term notes, due September 3, 2019

-- “a-” on CAD 250 million, Series 2, 6.40% senior unsecured medium-term notes, due November 23, 2039

-- “a-” on CAD 300 million, Series 4, 4.70% senior unsecured medium-term notes, due August 18, 2021

The following debt ratings under the shelf registration have been removed from under review with negative implications and affirmed:

Intact Financial Corporation—

-- “a-” on senior unsecured debt securities

-- “bbb+” on subordinated unsecured debt securities

-- “bbb” on Class A preferred shares

(included in the CAD 2 billion preliminary short form base shelf prospectus issued May 13, 2009)

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Rating Members of Insurance Groups”; “A.M. Best's Ratings & the Treatment of Debt”; and “Understanding BCAR for Canadian Property/Casualty Insurers.” Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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