Standard & Poor’s Ratings Services today assigned “A+” ratings to the subsidiaries of ING Canada Inc., including Belair Insurance Co. Inc., ING Insurance Co. of Canada, ING Novex Insurance Co. of Canada, and The Nordic Insurance Co. of Canada.

S&P also raised the ratings on Allianz Insurance Co. of Canada and Trafalgar Insurance Co. of Canada to “A+”.

The various companies represent the primary operating subsidiaries of Toronto-based insurance holding company ING Canada. S&P says the outlook for all of the companies is stable.

S&P says that through participation reinsurance agreements, all of the insurance companies within ING Canada effectively operate as one. Accordingly, the financial strength ratings have been equalized.

The ratings agency notes the ratings on the Canadian operating companies benefit from the implied support of the very strong ING Group. Allianz and Trafalgar had been placed on CreditWatch with developing implications back on Oct. 8, 2004, following the announcement that these companies were being acquired by ING Canada.

The ratings on ING Canada reflect its leading market position, its strong underwriting discipline and operating performance, S&P explains. “This follows from a reduction in claims frequency, the introduction of government auto reforms, rate increases, and capital gains generated within the companies’ investment portfolio,” it says. “The challenges facing the company include the cyclical nature of this sector’s operating performance, very competitive business environment, commodity-like nature of the company’s products, and the consolidation that continues to occur within the insurance and financial services sector.”

Major rating factors include: ING Canada is the leading player in the property and casualty (P&C) insurance market by both market share and market cap; it has well-established multichannel distribution channels, and is well diversified by geography and product line; a good history of strong operating performance; an experienced management team; financial flexibility; and, the firm has a good acquisition record.

“The stable outlook reflects the strong operating performance of ING Canada. Through disciplined underwriting and claims management, the company has been able to outperform its competitors. We believe that this trend will continue and this is reflected in the ratings on the companies,” S&P says. “Nevertheless, recently implemented government caps, regulatory reforms, and premium freezes and rollbacks are expected to reduce profitability to a more normal level in future. Moreover, the continued low interest rate environment will continue to put pressure on investment returns.”