AM Best has downgraded the credit ratings of two Canadian subsidiaries of The Travelers Companies Inc. (Travelers), following the announcement that the insurer will sell its personal and most of its commercial operations in Canada to Definity Financial Corporation. 

The Dominion of Canada General Insurance Company had its Financial Strength Rating (FSR) lowered from A (Excellent) to A- (Excellent), and its Long-Term Issuer Credit Rating (Long-Term ICR) downgraded from “a” to “a-.” The ratings have been placed under review with developing implications. 

Travelers Insurance Company of Canada (TICC) saw its FSR downgraded from A++ (Superior) to A+ (Superior), and its Long-Term ICR lowered from “aa+” to “aa-.” AM Best has placed TICC’s ratings under review with negative implications. 

Both companies are headquartered in Toronto and form part of the broader Travelers Canada business. 

The ratings action follows the announcement in early 2025 that Travelers signed an agreement to sell its personal insurance business and the majority of its commercial insurance operations in Canada to Definity Financial Corporation. The transaction is expected to close in the first quarter of 2026, subject to regulatory approvals and other customary closing conditions. 

Definity, a Canadian-based insurer focused on personal and commercial lines, has said the acquisition will expand its presence in the Canadian insurance market and add to its product offerings. The deal includes the transfer of both companies’ existing insurance portfolios and associated operations. 

AM Best said the announcement led to the removal of the “TRV lift,” a ratings enhancement tied to the financial strength of the U.S.-based parent company. With Dominion and TICC preparing to transition to new ownership, AM Best reassessed their credit profiles independently, resulting in the current downgrades. 

According to AM Best, Dominion’s ratings reflect balance sheet strength assessed as strongest, marginal operating performance, a neutral business profile, and appropriate enterprise risk management. TICC, previously rated higher, was downgraded more substantially, with ratings placed under review with negative implications, reflecting the lower credit profile of its future parent. 

AM Best noted that while both insurers maintain strong balance sheets and sound risk management, the change in ownership creates uncertainty, warranting closer monitoring. 

The ratings agency said it will continue to evaluate developments related to the transaction and provide updates as conditions warrant.