DBRS Morningstar Assigns a Rating of R-1 (low) With a Stable Trend to Intact Financial Corporation's Short Term Promissory Notes.

ENPNewswire-October 8, 2021--DBRS Morningstar Assigns a Rating of R-1 (low) With a Stable Trend to Intact Financial Corporation's Short Term Promissory Notes

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Release date- 07102021 - DBRS Limited (DBRS Morningstar) assigned a rating of R-1 (low) with a Stable trend to Intact Financial Corporation's (Intact or the Company) Short Term Promissory Notes.

The rating is consistent with DBRS Morningstar's notching approach for debt instruments issued by insurance companies.

RATING DRIVERS

Intact's ratings would be upgraded if the RSA Insurance Group Plc acquisition is successfully executed by achieving the expected financial results, while maintaining a similar risk profile. This would include strengthened market positions that result in a sustained improvement in profitability, and lowering financial leverage to below 30%. Material strengthening of capital buffers would also have positive rating implications.

Conversely, the Company would be downgraded if there were material integration issues, or if Intact experienced a persistent decline in underwriting results or significant unfavourable reserve developments. The ratings would also be downgraded if Intact experienced a material decline in capital buffers above regulatory target ratios together with a sustained deterioration in financial leverage over 35%.

ESG CONSIDERATIONS

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

The Grid Summary Grades for Intact are as follows: Franchise Strength - Strong; Risk Profile - Strong/Good; Earnings Ability - Strong/Good; Liquidity - Strong/Good; Capitalization - Strong/Good.

Notes:

All figures are in Canadian dollars unless otherwise noted.

The principal methodology is the Global Methodology for Rating Insurance Companies and Insurance Organizations (July 16, 2021; https://www.dbrsmorningstar.com/research/381667). Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (February 3, 2021; https://www.dbrsmorningstar.com/research/373262).

For more information regarding rating methodologies and...

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