AM Best downgrades the Credit Ratings of Nissan Global Reinsurance, Ltd. (NGRe), citing a moderate weakening in the credit profile of its parent, Nissan Motor Co., Ltd. The ratings action moves the Bermuda-based captive’s Financial Strength Rating (FSR) to ‘A-’ (Excellent) from ‘A’ (Excellent) and its Long-Term Issuer Credit Rating (Long-Term ICR) to ‘a-’ (Excellent) from ‘a’ (Excellent). The outlook on these Credit Ratings is ‘stable’. The downgrades reflect a moderate weakening in the parent company’s credit profile, which AM Best attributes to current global economic conditions and the recently enacted US tariff policy. Despite this, the captive remains an integral component of the parent’s business plan and risk management framework. NGRe’s balance sheet strength is assessed as very strong, supported by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Its operating performance is rated adequate, reflecting consistently favourable annual combined and operating ratios over the last five years. As a single-parent captive for one of the world's largest automakers, NGRe provides a wide range of insurance coverages, including extended service contracts, product liability and inland marine, in the United States and abroad. The captive benefits from the Nissan group’s proprietary data warehouse, extensive risk management practices and loss control programmes. AM Best notes that while NGRe has consistently generated strong annual earnings, its total surplus has declined over the past five years as dividends returned to the parent have exceeded those earnings. Negative rating action could occur if the captive’s risk-adjusted capitalisation weakens or if AM Best’s perception changes in the parent’s ability and willingness to support the organisation.
