Press Release - JUNE 28, 2019

AM Best Affirms Credit Ratings of Toyota Motor Insurance Company


CONTACTS:
 Victoria Riggs
Senior Financial Analyst
+1 908 439 2200, ext. 5039
vicky.riggs@ambest.com

Susan Molineux
Director
+1 908 439 2200, ext. 5829
susan.molineux@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 - JUNE 28, 2019
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Toyota Motor Insurance Company (TMIC) (Cedar Rapids, IA). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect TMIC’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

TMIC continues to maintain balance sheet strength at the strongest level supported by risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), low underwriting leverage, organic and steady growth of policyholders’ surplus, excellent liquidity with metrics outperforming the industry, and positive cash flows. AM Best assesses the company’s operating performance as adequate and is expected to return to historical levels following the deterioration in profitability, which is attributed to losses from its guaranteed auto protection (GAP) business and the rise in frequency and severity, mitigated by rate increases to address the issue. TMIC’s neutral business profile supports the Toyota organization as a wholly owned subsidiary and single-parent captive of Toyota Motor Insurance Services, Inc., a California corporation. TMIC provides vehicle service agreements, GAP agreements, excess wear and use coverage, and tire and wheel protection coverage for Toyota and Lexus customers, dealers, and affiliated companies. AM Best considers TMIC’s ERM to be appropriate, as the captive has leveraged the robust and formal corporate management practices that have been established and implemented by its U.S. parent, Toyota Motor Credit Corporation.

The stable outlooks reflect AM Best’s expectation that the company will maintain its strongest assessed balance sheet strength, adequate operating performance attending to its volatile GAP product line, and neutral business profile without divergence from its risk profile.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

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
011099 Toyota Motor Insurance Company