AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Tokio Marine Canada Ltd. (TMC) (Toronto, ON). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect TMC’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The very strong balance sheet assessment reflects TMC’s very strong level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and ongoing support from its parent, Tokio Marine & Nichido Fire Insurance Co., Ltd. (Tokio Marine). Additional positive rating factors include TMC’s financial flexibility, high-quality assets, conservative investment portfolio and reinsurance programs that are placed with highly rated reinsurers. Conversely, AM Best views the execution risks associated with start-up companies as a negative factor.

AM Best assesses TMC’s operating performance as adequate, reflecting its recent achievement of underwriting profitability, expectations for continued earnings development and the underwriting expertise of TMC’s leadership team. The assessment also considers the company’s limited operating history and execution risk as it continues to scale its Canadian platform.

Additionally, AM Best assesses TMC’s business profile as limited, reflecting its developing market position in Canada and limited operating history. These factors are offset partially by TMC’s strategic importance to Tokio Marine, experienced management team, broad commercial and specialty product capabilities, and access to select broker and managing general agent relationships.

AM Best assesses TMC’s ERM as appropriate, reflecting a well-defined framework influenced by the established risk-management practices of Tokio Marine Holdings, Inc., as well as defined risk appetite and tolerances. The ratings also recognize the operational and financial support provided by TMC’s parent and affiliated entities, and TMC’s role in supporting Tokio Marine’s broader international strategy and diversification of revenues and customer segments.

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 Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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