OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of TD Reinsurance (Barbados) Inc. (TD Re) (Barbados). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect TD Re’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. The company has a history of high returns on equity due to favorable underwriting results on a solid capital base that has continued through 2017. Furthermore, the company maintains a high quality, short duration investment portfolio that adequately matches its liability profile.
TD Re primarily is a life reinsurer that is ultimately owned by The Toronto-Dominion Bank (TD Bank). TD Re principally reinsures credit insurance policies underwritten by third-party life insurance carriers on consumer loans originated by TD Bank’s Canadian retail branches. In 2017, the company finalized its first general insurance transaction with another TD Bank subsidiary. The new business is primarily homeowners and private passenger auto insurance.
These strengths are offset partially by a dependence on Canadian consumer loan originations for growth and the recent move to take on what A.M. Best categorizes as higher risk products in the new general insurance transaction. While the company’s financial leverage has increased as a result of this business change, A.M. Best notes that the overall balance sheet strength and risk-adjusted capitalization remain very strong.
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