Best’s News & Research Service - May 21, 2021 11:31 AM (EDT)
AM Best Affirms Credit Ratings of TD Reinsurance (Barbados) Inc.
- May 21, 2021 11:31 AM (EDT)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of TD Reinsurance (Barbados) Inc. (TD Re) (Barbados). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect TD Re’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
TD Re is a life and general insurance reinsurer that ultimately is owned by The Toronto-Dominion Bank (TD Bank). TD Re principally reinsures credit insurance policies underwritten by third-party life insurance carriers on consumer loans originated by TD Bank’s Canadian retail branches. The company also reinsures homeowners and private passenger auto insurance with a 25% quota share agreement with another TD Bank subsidiary since 2017. Despite implications from the COVID-19 pandemic, TD Re maintained its high return on equity from favorable underwriting results and saw improved claims experience in private passenger auto due in part to less drivers on the road. The company also continues to maintain multiple high quality investment portfolios that are managed to match the specific liability profiles of the business they support.
These strengths are offset partially by a dependence on Canadian consumer loan originations for growth. Due to the digitization of banking services, removing face-to-face transactions and the acceleration of this from the COVID-19 pandemic, creditor premiums continue to fall. Furthermore, while earnings have been favorable for the general insurance line of business to date, this line of business could potentially see earnings volatility once economies return back to pre-pandemic levels of activity.
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 Guide to 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 credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.