AM Best Information Services

JUNE 24, 2022 03:22 PM (EDT)

AM Best Affirms Credit Ratings of Scotia Insurance (Barbados) Limited

 Kevin Varvaro
Financial Analyst
+1 908 439 2200, ext. 5487

Edward Kohlberg
+1 908 439 2200, ext. 5135

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jeff Mango
Managing Director, Strategy & Communications
+1 908 439 2200, ext. 5204


OLDWICK - JUNE 24, 2022 03:22 PM (EDT)
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of Scotia Insurance (Barbados) Limited (Scotia Insurance) (Barbados). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Scotia Insurance’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.

Scotia Insurance is primarily a life reinsurer that ultimately is owned by The Bank of Nova Scotia (Scotiabank). Scotia Insurance principally reinsurers credit insurance policies underwritten by major third-party life insurance carriers on consumer loans originated by Scotiabank’s retail operations throughout Canada. The company has a long history of favorable underwriting results that have continued through 2021 despite challenges brought on from operating in the COVID-19 pandemic environment. The company is bolstered further by a very strong risk-adjusted capitalization, as measured by Best’s Capital Ratio (BCAR), and an investment portfolio that provides the entity with substantial liquidity due to its short duration.

These strengths are offset partially by Scotia Insurance’s dependence on lending product originations within Canada, which are heavily dependent on macro-economic conditions. In recent years, creditor insurance premiums have been on a slow decline under the COVID-19 pandemic, and this trend is expected to continue over the near term. AM Best notes that despite the company managing capital to specific internal targets, which has kept absolute capitalization levels largely flat, Scotia Insurance could recapitalize in a stress scenario 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 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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AMB# Company Name
030195 Bank of Nova Scotia
057051 Scotia Insurance (Barbados) Ltd