AM Best has upgraded the Financial Strength Rating (FSR) of Northbridge Financial's member companies to A+ (Superior) from A (Excellent) and raised the Long-Term Issuer Credit Ratings (ICRs) to "aa-" (Superior) from "a+" (Excellent).
The upgrade applies to Federated Insurance Company of Canada, Northbridge General Insurance Corporation, Zenith Insurance Company and Verassure Insurance Company, all based in Ontario. The outlook for all ratings is stable.
AM Best also affirmed the A (Excellent) FSR and “a” (Excellent) Long-Term ICR of Wentworth Insurance Company Limited, located in Barbados. Both Northbridge and Wentworth are subsidiaries of Fairfax Financial Holdings Limited.
The higher ratings are underpinned by Northbridge’s strongest-level balance sheet, solid underwriting results, and effective enterprise risk management. The insurer has established itself as one of Canada’s leading commercial lines carriers, supported by a broad broker distribution network and a diversified risk portfolio.
According to AM Best, Northbridge’s underwriting discipline and focus on profitability have allowed it to outperform the broader commercial lines market. Its combined ratios and returns on equity remain consistently above industry averages, benefiting from firm pricing conditions and selective growth strategies.
The upgrade is also expected to enhance Northbridge’s market competitiveness and underwriting capacity. A stronger financial strength rating often translates into more favourable terms from reinsurers, potentially lowering reinsurance costs and improving capital efficiency. This could allow Northbridge to take on more complex or higher-limit risks without increasing exposure disproportionately.
AM Best noted that Northbridge’s capital position is supported by the financial flexibility of Fairfax Financial Holdings, which provides liquidity through access to credit and capital markets. The parent’s improved credit profile, coupled with investment management expertise and shared resources, was a key factor in the upgrade.
For Wentworth Insurance Company, the affirmed ratings reflect its very strong capitalization, profitable underwriting, and appropriate risk management framework. Fairfax has continued to back Wentworth through capital injections and portfolio de-risking to maintain a high level of risk-adjusted capitalization under Best’s Capital Adequacy Ratio (BCAR).
The upgrades reinforce Fairfax’s position as one of the more financially resilient insurance groups in the global market. For Northbridge, the improved rating is expected to strengthen broker confidence and support sustained growth in Canada’s commercial sector, where competition for quality risks and capacity remains intense.
Northbridge Insurance was one of the winners for The Best Insurance Companies for Construction in Canada. See the full list of winners on the 5-Star Construction special reports here.
