A.M. Best has assigned a financial strength rating of “A (Excellent)” and a long-term issuer credit rating of “a+” to Scotia Reinsurance, located in Barbados.
Scotia Reinsurance in primarily a life reinsurance subsidiary that is ultimately owned by The Bank of Nova Scotia in Toronto, Ontario.
The reinsurance company will assume the existing non-Canadian source business from its sister company, Scotia Insurance (Barbados).
It will also assume new business mainly from Mexico, South and Central America and the Caribbean, sourced by its banking parent.
According to A.M. Best, the existing book of business has a long history of favourable premium growth and strong underwriting results underpinned by low loss ratios.
The assigned ratings assume continued favourable operating results, adequate capitalisation and maintenance of a conservative investment profile.
The rating agency explained that these strengths are partially offset by its dependence for growth upon consumer loan originations in local economies outside Canada that have elevated country risk profiles, and an expected high dividend payout ratio to its parent.
