Press Release - MAY 10, 2019

AM Best Affirms Credit Ratings of Scotia Insurance (Barbados) Limited


CONTACTS:
 Kevin Varvaro
Financial Analyst
+1 908 439 2200, ext. 5487
kevin.varvaro@ambest.com

William Pargeans
Director
+1 908 439 2200, ext. 5359
william.pargeans@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - MAY 10, 2019
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of Scotia Insurance (Barbados) Limited (Scotia Insurance) (Barbados). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Scotia Insurance’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

Scotia Insurance is primarily a life reinsurer that ultimately is owned by The Bank of Nova Scotia (Scotiabank). Scotia Insurance principally reinsurers credit insurance policies underwritten by major third-party life insurance carriers on consumer loans originated by Scotiabank’s retail branches throughout Canada. The company has a long history of favorable underwriting results through conservative underwriting that has continued through 2018. The company is bolstered further by a favorable risk-adjusted capitalization, assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio.

These strengths are offset partially by Scotia Insurance’s dependence on consumer loan originations within Canada, and how such products are offered. The creditor insurance cross-sell on loans has slowed in recent years, due to a general slowdown in the Canadian retail lending market. Furthermore, the company maintains a high dividend payout ratio that has resulted in a lack of absolute capital expansion. However, AM Best notes that in a stress scenario, Scotia Insurance could recapitalize by adjusting its shareholder dividend payout.

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 Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.


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AMB# Company Name
030195 Bank of Nova Scotia
057051 Scotia Insurance (Barbados) Ltd