OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A++ (Superior) and the Long-Term Issuer Credit Rating of “aa+” of Tokio Millennium Re AG (TMR) (Switzerland). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect TMR’s superior financial strength, its effective risk management, favorable historical operating performance and strong risk-adjusted capital position. In addition, TMR benefits from the global recognition and balance sheet strength of Tokio Marine & Nichido Fire Insurance Co., Ltd. (TMNF), as well as the implicit and explicit support provided by TMNF. The ratings also consider the key role that TMR plays in transferring and accepting extreme risks in the international reinsurance market, which is a part of the overall group’s strategy of geographic diversification.
Originally established in 2000 to write predominantly property/catastrophe reinsurance, TMR has been expanding into specialty and casualty reinsurance since 2010 in order to diversify its book of business. In addition, TMR continues to be a leader in transforming and transferring reinsurance risk to the capital markets through its Tokio Solution Management Ltd. and Shima Re subsidiaries.
Partially offsetting these positive rating factors are TMR’s exposure to low frequency, high severity catastrophic events, its continued growth into newer markets (in particular through its U.S. branch), as well as its diversification into casualty lines of business.
Positive rating actions could be caused by stronger than expected risk-adjusted capital, or a sustained and material improvement in the underwriting performance leading to returns above its peers. Negative rating actions could occur if the company’s growth is significantly higher than its peers and underwriting performance is consistently below the market by a significant margin, if there is a material decline in the risk-adjusted capital, or loss of explicit parental support.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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