FFH: S&P Assigns Positive Outlook

Standard & Poor’s has announced:

  • Fairfax continues to successfully leverage its growing insurance business platform and related balance sheet assets to deliver above-average long-term investment performance for the consolidated organization.
  • We believe the company’s consolidated competitive profile is improving and better positioned to drive profitable future growth.
  • Therefore, we are revising our outlook on ultimate parent Fairfax Financial Holdings and its core insurance and reinsurance companies to positive from stable.
  • We are affirming our ‘BBB-‘ counterparty rating on Fairfax Financial Holdings and its intermediary holding companies and our ‘A-‘ financial strength ratings on its core insurance operating companies.

The positive outlook reflects the 1-in-3 likelihood of a one notch upgrade on FFH’s core insurance and reinsurance operating companies in the next 24 months.

We could lower the ratings on Fairfax Group if its consolidated capital adequacy decreases below a very strong level, if the company reports major adverse reserve development–a development of more than two percentage points of prior year net loss reserves–if earnings volatility increases over a multiyear period excluding the effect of the equity hedge and Consumer Price Index-linked securities, or if its core subsidiaries’ underwriting performance consistently lags the underwriting performance of the industry.

Fairfax has the following preferreds outstanding: FFH.PR.C, FFH.PR.E, FFH.PR.G and FFH.PR.I. All are FixedResets; all are relegated to the Scraps index on credit concerns.

S&P rates the preferreds P-3; DBRS rates Pfd-3.

One Response to “FFH: S&P Assigns Positive Outlook”

  1. […] now obsolete Positive Outlook was reported on PrefBlog when it came into effect …. nearly two years […]

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