OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Rating of “a+” of Scotia
Reinsurance Limited (Scotia Re) (Barbados). The outlook of these Credit
Ratings (ratings) is stable.
The ratings reflect Scotia Re’s balance sheet strength, which AM Best
categorizes as very strong, as well as its strong operating performance,
neutral business profile and appropriate enterprise risk management. The
ratings also reflect rating enhancement from the company’s ultimate
parent, The Bank of Nova Scotia (Scotiabank).
Scotia Re is primarily a life reinsurance subsidiary that assumes
non-Canadian business largely from Mexico, South and Central America and
the Caribbean, sourced through Scotiabank branches. The initial book of
business was assumed in 2017 from its sister company, Scotia Insurance
(Barbados) Limited, which has a long history of favorable underwriting
results. The business assumed continued favorable results under Scotia
Re after its first full year in operation, resulting in highly favorable
return metrics. The company’s balance sheet strength is bolstered
further by the strongest level of risk-adjusted capitalization,
reflecting in part a conservative short duration investment portfolio.
These strengths are offset partially by the company’s dependence for
growth on consumer loan originations in economies outside of Canada,
many of which are deemed to have higher country risk profiles.
Furthermore, a high dividend payout ratio results in a lack of absolute
capital growth. AM Best notes, however, that in a stress scenario,
Scotia Re could recapitalize by adjusting its shareholder dividend
payout.
This press release relates to Credit Ratings that have been published
on AM 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 AM 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. For information on the proper media
use of Best’s Credit Ratings and AM Best press releases, please view Guide
for Media – Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.
Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.
Contacts
Kevin Varvaro
Financial Analyst
+1 908 439
2200, ext. 5487
[email protected]
William
Pargeans
Director
+1 908 439 2200, ext. 5359
[email protected]
Christopher
Sharkey
Manager, Public Relations
+1 908 439
2200, ext. 5159
[email protected]
Jim
Peavy
Director, Public Relations
+1 908 439
2200, ext. 5644
[email protected]
