A.M. Best has revised the long-term issuer credit rating outlook to positive from stable and affirmed the financial strength rating of “A (Excellent)” of Toyota Motor Insurance Company (TMIC), located in Iowa.
According to A.M. Best, the credit ratings reflect TMIC’s “excellent” risk adjusted capitalisation and “strong” profitability driven by favourable underwriting returns supplementing net investment income.
TMIC also benefits from support provided by its ultimate parent, Toyota Motor Corporation (Toyota).
A.M. Best said: “Offsetting these positive rating factors are TMIC’s limited business profile as a single-parent captive and its reliance on new and used automobile sales at Toyota dealerships to generate premium.”
The ratings company suggested that negative rating actions could occur if the TMIC’s underwriting performance shows a decline or demonstrates volatility.
However, positive ratings actions could occur with “sustainable robust overall earnings while maintaining its strong level of risk-adjusted capitalisation,” said A.M. Best.
