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Best’s News & Research Service - May 09, 2024 04:08 PM (EDT)

AM Best Affirms Credit Ratings of Tokio Marine Canada Ltd.

  • May 09, 2024 04:08 PM (EDT)
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//BestWire// - AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Tokio Marine Canada Ltd. (TMC) (Toronto, ON). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect TMC’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The very strong balance sheet assessment reflects TMC’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as ongoing support from the parent, as needed. Additional positive rating factors include financial flexibility, high-quality assets, a conservative investment portfolio and reinsurance programs that are placed with highly rated reinsurers. Conversely, AM Best views the execution risks associated with start-up companies as a negative factor.

AM Best assesses TMC’s operating performance as adequate based on the company’s results and projections. Additionally, AM Best views the company’s business profile as limited given that TMC is a start-up entity and also recognizes TMC’s ERM capabilities, which benefit from the overall framework developed at the ultimate parent’s level. Finally, the ratings consider implicit and explicit support provided by Tokio Marine Holdings, Inc. (TMHD), and its lead insurance operating company, Tokio Marine & Nichido Fire Insurance Co., Ltd. (TMNF), and the affiliation between TMNF’s U.S. subsidiaries. TMC aligns with TMHD’s strategy of expanding its international business in developed and emerging markets, in addition to providing diversification of revenues and customer segments.

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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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. 

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