HONG KONG--(BUSINESS WIRE)--A.M. Best has assigned a Financial Strength Rating (FSR) of A (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” to The Toa 21st Century Reinsurance Company, Ltd. (TTFC) (Switzerland). The outlook assigned to these Credit Ratings (ratings) is stable. Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a+” of The Toa Reinsurance Company, Limited (Toa Re) (Japan) and The Toa Reinsurance Company of America (TRA) (headquartered in Morristown, NJ). The outlook of these ratings is stable. TTFC is a newly added member of Toa Re, of which TRA is the other member.
The ratings of Toa Re reflect the company’s consolidated balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
Toa Re’s balance sheet strength is assessed at the strongest level, owing to its conservative risk management in its underwriting and investment strategies. The company’s risk-adjusted capitalization has improved significantly in the past five years from stable and positive operating results. Despite a series of catastrophe events in North America, the company maintained profitable underwriting results in fiscal year 2017. Offsetting rating factors include limited growth opportunities in Japan’s domestic reinsurance market and intense competition in the global reinsurance market, owing to abundant capacity.
Negative rating actions could occur if there is a substantial decline in risk-adjusted capitalization resulting from significant underwriting losses, or adverse movements in the financial markets.
TTFC has been a wholly owned reinsurance subsidiary of Toa Re since 2002 that mainly assumed captive business from its parent. In May 2018, Toa Re announced that TTFC will underwrite third-party business under the brand name of Toa Re Europe. The company will strengthen its experienced underwriting team by adding other reinsurance professionals locally to TTFC and will serve as the group’s major European underwriting platform. In addition, the Toa Re will gradually transfer part of its existing European book of business to TTFC.
The addition of TTFC to the Toa Re’s rating unit reflects its strategic importance to Toa Re’s growth and geographic diversification strategy. Toa Re provides various explicit and implicit support, such as business transfer, risk management and operational support to TTFC. A.M. Best views Toa Re as strongly committed to TTFC’s development and long-term success and will provide necessary financial support if needed.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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