Co-operators General rating affirmed, outlook positive

Co-operators General Insurance Co. of Guelph, ON has seen its “BBB-” rating affirmed and its outlook revised to positive by rating agency Standard & Poor’s.”The financial strength rating on CGIC reflects the insurance company’s position as one of Canada’s larger property and casualty insurers, and its strong capitalization, asset quality and liquidity,” says S&P analyst Donald Chu. “The company’s much improved operating performance is attributed to the general improvement within the sector, and the internal changes brought about by the CEO and executive team that took over in 2001.”S&P predicts further improvement in results for Co-operators General, and also cites the insurer’s strong investment portfolio. As well, the rater notes that while 20% of the company’s equity base is made up of preferred stock, it is under no pressure to declare shareholder dividends, so income generated can be used to fund growth.S&P says further improvement in the company’s operating results could spur a ratings upgrade.In the first half of 2004, Co-operators General produced net income of $72.4 million, and a combined ratio of 94.6%.