A.M. Best has revised the outlook of Canada-based Transportation Property and Casualty Company (TPCC) from stable to positive and affirmed its financial strength rating as “A-“ (“Excellent”) and issuer credit rating as “a-”.
TPCC is a pure captive insurance company that provides automobile physical damage, general liability and property insurance coverage for TransLink (the South Coast British Columbia Transportation Authority).
Its ratings are based on its “excellent” capitalisation and operating performance and a strong enterprise risk management programme, said A.M. Best. It added that "inuring to the benefit of the ratings is the captive’s favorable profile as part of TransLink".
TPCC has demonstrated its “usefulness and effectiveness” to TransLink over many years as it provides flexibility for insurance programme structuring and substantial insurance cost efficiencies, added the ratings agency.
A.M. Best said that TPCC’s ratings could improve if it maintains a stable underwriting performance and reduced overall net exposure over the next few years.
“Factors that could lead to a negative outlook or a downgrading of the company’s ratings are a material loss of capital from either claims or investments, a reduced level of capital that does not support the ratings or an increase in net retention.”
“TPCC’s ratings are somewhat linked to the rating of TransLink; therefore, unfavourable operating performance or material loss of capital could result in changes to the captive’s ratings.”
