AM Best Affirms Credit Ratings of The Wawanesa Mutual Insurance Company and Wawanesa Life Insurance Company

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a” (Excellent) of The Wawanesa Mutual Insurance Company (Wawanesa Mutual). At the same time, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Wawanesa Life Insurance Company (Wawanesa Life). The outlook of these Credit Ratings (ratings) is stable. Both companies are domiciled in Winnipeg, Manitoba, Canada.

The ratings of Wawanesa Mutual reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

Wawanesa Mutual’s very strong level of balance sheet strength is supported by its risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and its strong minimum capital test levels, partially offset by variability in reserve development in recent years. Despite an insurance service loss through the third quarter of 2024, due to elevated catastrophe activity and some prior year reserve development on auto, the company’s underwriting performance has improved relative to historical experience when viewed on a longer-term basis. This improvement reflects more disciplined underwriting and internal process efficiencies, including improved pricing sophistication through better leveraging of new and existing data sources. The decrease in insurance service results was more than offset by very strong investment performance through the third quarter of 2024.

The ratings of Wawanesa Life reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM. Wawanesa Life receives further rating enhancement given its strategic alignment with Wawanesa Mutual’s property/casualty business by diversifying revenue and providing life, annuity, accident and sickness and disability insurance products. Wawanesa Life maintains the strongest level of risk-adjusted capitalization, as measured by BCAR and robust life insurance capital adequacy test results. Underwriting profitability has been pressured by adverse claim experience, but has generally been offset by investment income from strong equity returns and favorable yield curve movements. Premium trends have been generally positive and are expected to continue as ongoing modernization will position the company for scalable growth and to execute on its long-term strategy.

The stable outlooks for Wawanesa Mutual and Wawanesa Life reflect AM Best’s expectation that the rating fundamentals will remain unchanged in the intermediate term.

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.

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