Press Release - APRIL 18, 2019
AM Best Withdraws Credit Ratings of CIBC Reinsurance Company Limited
FOR IMMEDIATE RELEASE
OLDWICK - APRIL 18, 2019
The ratings reflect CIBC 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.
CIBC Re is a life reinsurance subsidiary that is ultimately owned by the Canadian Imperial Bank of Commerce (CIBC). CIBC Re assumes credit insurance business that has been underwritten by unaffiliated life insurance carriers on consumer mortgages, loans and credit cards originated by CIBC’s Canadian branches. CIBC Re subsequently retrocedes a portion of these risks to two unaffiliated reinsurers. Formerly, CIBC Re participated in excess retrocession pools within the United States and Canada but has since exited the market through a series of novations and natural runoff.
The company has a history of favorable performance metrics and profitability and maintains a conservative investment portfolio composed entirely of high-quality, liquid and relatively short duration bonds. These positive rating factors are offset partially by CIBC Re’s dependence on consumer loan originations for premium growth, which have seen stagnant growth in recent years partially due to the digitization of banking with further potential to decline if consumer loan originations in the Canadian market slow.
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.
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