AM Best Comments on Credit Ratings of Intact Financial Corporation and Subsidiaries Following UK Pension Buy-In Transaction
01 Marzo 2023 - 9:04AM
Business Wire
AM Best has commented that the Financial Strength Rating
of A+ (Superior) and the Long-Term Issuer Credit Ratings of “aa-”
(Superior) of Intact Insurance Company (Ontario, Canada), the lead
company of Intact Financial Corporation (IFC) [TSX: IFC], as well
as the Credit Ratings (ratings) for all subsidiaries of IFC, remain
unchanged following the recent announcement of a GBP 6.5 billion
U.K. pension buy-in agreement between IFC, RSA UK Pension Trustees
(RSA UK) and Pension Insurance Corporation plc (PIC).
The transaction is being structured as a pension risk transfer
buy-in and will result in significantly lower pension risk to IFC’s
balance sheet by substantially insuring its RSA UK defined benefit
pension liabilities with PIC, which were acquired in its purchase
of RSA Insurance Group Limited (RSA) in June 2021. IFC will
facilitate this transaction through an upfront contribution to the
Pension Schemes of approximately GBP 500 million. The transaction
is expected to be funded using approximately CAD 300 million of
excess capital, CAD 300 million of hybrid capital and/or preferred
share issuance, as well as short-term debt. As a result, short-term
financial metrics are expected to decrease due to the finance costs
associated with the transaction. On a prospective basis, the
transaction is expected to reduce funding contributions of RSA UK
pension liabilities by GBP 75 million annually and release
approximately GBP 150 million of required capital. AM Best notes
that capital ratios in all jurisdictions are expected to remain in
line with target operating levels, and well above regulatory
requirements. Additionally, AM Best expects that financial leverage
and interest coverage ratios will remain within acceptable
guidelines.
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 Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
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 © 2023 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Cristian Sieira Financial Analyst +1 908 439
2200, ext. 5714 cristian.sieira@ambest.com
Rosemarie Mirabella Director +1 908 439 2200,
ext. 5892 rosemarie.mirabella@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 439 2200, ext. 5098 al.slavin@ambest.com
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