A.M. Best Takes Various Rating Actions on R&SA Canada Group's Subsidiaries

    OLDWICK, N.J., June 27 /CNW/ - A.M. Best Co. has affirmed the financial
strength ratings (FSR) of A- (Excellent) and assigned issuer credit ratings
(ICR) of "a-" to Royal & Sun Alliance Insurance Company of Canada (RSA Canada)
and Quebec Assurance Company (Quebec Assurance) (Quebec, Canada). A.M. Best
has also affirmed the FSRs of B++ (Good) and B+ (Good) and assigned ICRs of
"bbb" and "bbb-" to Western Assurance Company (Western Assurance) and Ascentus
Insurance Ltd. (Ascentus) (both of Ontario, Canada), respectively.
Additionally, A.M. Best has upgraded the FSR to C+ (Marginal) from C
(Marginal) and assigned an ICR of "b-" to Unifund Assurance Company (Unifund)
(Newfoundland). The outlook for the FSRs has been revised to stable from
negative, and the outlook assigned to the ICRs is stable. All companies are
subsidiaries of R&SA Canada Group.

    The affirmation of the FSRs of RSA Canada, Quebec Assurance and Western
Assurance reflects each company's risk-adjusted capitalization, favorable
operating performance and sound reserve development. The ratings of Ascentus
are based on its solid level of capitalization to support its underwriting and
investment risk. However, direct premium volume has sharply declined in recent
years, and all private passenger auto and personal property business is being
renewed into RSA Canada.

    Unifund's FSR upgrade is based on its improved risk-adjusted
capitalization and profitable operating performance. However, Unifund, which
is used as a growth vehicle, is impacted by rapid premium expansion and
elevated underwriting leverage measures.

    Going forward, A.M. Best remains concerned about softening market
conditions, fierce competition and the long-term benefits of regulated product
reforms to auto insurance in the core operating territories of Ontario and
Alberta. As a result, the companies will be challenged to maintain current
levels of profitability.

    For Best's Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.

    Founded in 1899, A.M. Best Company is a full-service credit rating
organization dedicated to serving the financial services industries, including
the banking and insurance sectors. For more information, visit www.ambest.com.

For further information:

For further information: A.M. Best Co. Analyst: Joseph Burtone,
908-439-2200, ext. 5125 joseph.burtone@ambest.com or Public Relations: Jim
Peavy, 908-439-2200, ext. 5644 james.peavy@ambest.com or Rachelle Morrow,
908-439-2200, ext. 5378 rachelle.morrow@ambest.com

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