Press Release - MAY 10, 2019

AM Best Affirms Credit Ratings of Scotia Reinsurance 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 Reinsurance Limited (Scotia Re) (Barbados). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Scotia Re’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. The ratings also reflect rating enhancement from the company’s ultimate parent, The Bank of Nova Scotia (Scotiabank).

Scotia Re is primarily a life reinsurance subsidiary that assumes non-Canadian business largely from Mexico, South and Central America and the Caribbean, sourced through Scotiabank branches. The initial book of business was assumed in 2017 from its sister company, Scotia Insurance (Barbados) Limited, which has a long history of favorable underwriting results. The business assumed continued favorable results under Scotia Re after its first full year in operation, resulting in highly favorable return metrics. The company’s balance sheet strength is bolstered further by the strongest level of risk-adjusted capitalization, reflecting in part a conservative short duration investment portfolio.

These strengths are offset partially by the company’s dependence for growth on consumer loan originations in economies outside of Canada, many of which are deemed to have higher country risk profiles.

Furthermore, a high dividend payout ratio results in a lack of absolute capital growth. AM Best notes, however, that in a stress scenario, Scotia Re 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
095145 Scotia Reinsurance Limited