Co-operators General Insurance Co. had its credit placed on CreditWatch Thursday by Standard & Poor’s rating service. The company is still listed as investment grade.

The CreditWatch placement reflects Standard & Poor’s heightened concerns that Co-operators will not meet the minimum financial targets set out for the company to maintain its ratings. These targets include achieving a preferred dividend coverage ratio of at least 3.0 times and a combined ratio of 108% or better for 2002. This reflects the difficult operating environment that continues to be experienced by the Canadian property and casualty insurance industry and the challenging investment environment that has resulted from the downturn in the credit and global equity markets.

The placement should be resolved by early November 2002, says Standard & Poor’s in its news release. It is not expected to result in more than a one-notch downgrade of the rating. A downgrade would see the company slide from a triple ‘B’ to a triple ‘B minus’ rating. There is a possibility that the outlook could remain negative considering the very challenging industry, investment, and macro-economic environment to which the company is currently exposed.