AM Best Upgrades Credit Ratings of Definity Financial Corporation and Its Subsidiary

AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a” (Excellent) from “a-” (Excellent) of Definity Insurance Company (Definity Insurance). Concurrently, AM Best has upgraded the Long-Term ICR to “bbb” (Good) from “bbb-” (Good) of Definity Financial Corporation (Definity Financial). The outlook of these Credit Ratings (ratings) has been revised to stable from positive. Both companies are domiciled in Waterloo, Ontario, Canada.

The ratings of Definity Insurance reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The upgrades reflect Definity Insurance’s five-year trend of improving profitability, driven by disciplined underwriting, streamlined claims management practices and refined risk segmentation strategies, particularly in its commercial lines business. Definity Insurance has also made significant investments into its underwriting, claims and distribution capabilities, fostering growth and profitability improvements. These initiatives have substantially strengthened the company’s financial performance. Additionally, the integration of sophisticated pricing models and predictive analytics has led to a more profitable and higher-quality portfolio, further solidifying Definity Insurance’s competitive position in the market. As a result of these improvements, its operating performance relative to peer benchmarking is now assessed at adequate.

Risk-adjusted capitalization is anticipated to remain at a level supporting robust business growth in line with the group’s strategy to be a top five property/casualty carrier in Canada. The ratings acknowledge the diversification in its lines of business and distribution systems, which contribute to its overall business profile. Definity Financial became public in November 2021, and to date, maintains an unlevered balance sheet. AM Best expects that in the future, Definity Financial will manage financial leverage and interest coverage ratios at a level that is commensurate with its current rating.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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