A.M. Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” of Nissan Global Reinsurance (NGRe), based in Hamilton, Bermuda.
The outlook of these credit ratings remains stable.
A.M. Best stated that the ratings reflect NGRe’s balance sheet strength, which they categorised as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
NGRe is a single-parent captive of Nissan Motor Company. In its role as a single-parent captive, NGRe provides Nissan with a host of insurance coverages in the US and abroad, including extending service contracts, product liability and inland marine.
As a member of the Nissan family of companies, NGRe benefits from the group’s proprietary data warehouse, extensive risk management practices and loss control programmes.
The rating affirmations reflect NGRe’s steady growth in surplus driven by consistent premium growth and favourable profitability over the past 10 years.
The rating company suggested that NGRe maintains a large portion of investments in asset-backed securities (ABS), which produce significant monthly income that contributes to strong operating cash flows.
“Despite the substantial proportional size of the underlying loans, these ABS instruments are considered to be of high credit quality and have performed in accordance with expectations,” A.M. Best added.
Additionally, it highlighted that they incorporated the investment and liquidity risks related to ABS into this rating assessment.
A.M. Best noted that while the auto industry will be negatively impacted by the COVID-19 pandemic NGRe’s overall balance sheet strength remains very strong and its operations remain profitable.
