A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of Toyota Motor Insurance Company (TMIC). The outlook for both ratings is stable.
The ratings reflect TMIC’s excellent risk-adjusted capitalisation, underwriting income and overall earnings. Additionally, TMIC produces strong cash flows while maintaining liquidity and leverage metrics that outperform the industry composite.
TMIC also benefits from support provided by its ultimate parent, Toyota Motor Corporation. TMIC plays a strategic role within the Toyota organisation by providing vehicle service agreements, guaranteed auto protection agreements, excess wear and use coverage and tire and wheel protection sold through Toyota, Lexus and affiliated dealerships throughout the US.
Somewhat offsetting these positive rating factors are TMIC’s limited business profile as a single parent captive as well as its reliance on sales at Toyota’s level for premium generation.
Positive rating actions could occur if TMIC continues to produce sustainable robust overall earnings while maintaining its strong level of risk-adjusted capitalisation.
Negative ratings actions could occur if underwriting results deteriorate and/or there is a significant decline in surplus.
