OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a+” of CIBC Reinsurance Company Limited (CIBC Re) (Barbados). The outlook for both ratings is stable.
CIBC Re is a life reinsurance subsidiary that is ultimately owned by the Canadian Imperial Bank of Commerce (CIBC). CIBC Re principally reinsures credit insurance policies that have been underwritten by third-party life insurance carriers on consumer mortgages, loans and credit cards originated by CIBC’s Canadian branches. CIBC Re subsequently retrocedes these risks to several unaffiliated reinsurers. To a lesser extent, CIBC Re also participates in excess retrocession pools within the United States and Canada under a variety of treaties.
The rating affirmations reflect CIBC Re’s strong capitalization, favorable operating earnings and a conservative investment portfolio. The ratings factor in CIBC Re’s enterprise risk management framework, which is well integrated into CIBC, and the high credit quality and strong liquidity of CIBC Re’s investment portfolio that consists entirely of term bank deposits with a CIBC affiliate.
These positive rating factors are partially offset by CIBC Re’s dependence upon consumer loan originations for premium growth, which have a potential to decline if consumer loan originations in the Canadian market slow. Additionally, a decline in economic activity in Europe could impact CIBC Re’s ability to retrocede assumed risks to its European counterparties.
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