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 Toyota Motor Insurance Company (TMIC) (Cedar Rapids, IA). The outlook for both ratings is stable.
The ratings reflect TMIC’s excellent risk-adjusted capitalization, underwriting income and overall earnings. Additionally, TMIC produces strong cash flows while maintaining liquidity and leverage metrics that outperform the industry composite. TMIC also benefits from support provided by its ultimate parent, Toyota Motor Corporation (Toyota). TMIC plays a strategic role within the Toyota organization by providing vehicle service agreements, guaranteed auto protection agreements, excess wear and use coverage and tire and wheel protection sold through Toyota, Lexus and affiliated dealerships throughout the United States.
Somewhat offsetting these positive rating factors are TMIC’s limited business profile as a single parent captive as well as its reliance on sales at Toyota’s level for premium generation.
Positive rating actions could occur if TMIC continues to produce sustainable robust overall earnings while maintaining its strong level of risk-adjusted capitalization. Negative rating actions could occur if underwriting performance shows decline and demonstrates volatility impacting negatively on earnings and capitalization over time. Negative rating actions could also occur if there is a material shift in the risk profile that could potentially undermine the stability and profitability of TMIC. Financial issues resulting in ratings pressure, and the credit profile of the parent could also impact the company’s ratings.
A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
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