AM Best Affirms Credit Ratings of Nissan Global Reinsurance, Ltd.
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of 'a' (Excellent) for Nissan Global Reinsurance, Ltd. (NGRe). The ratings reflect NGRe's very strong balance sheet strength and adequate operating performance. NGRe has reported consistent profitable operations leading to surplus growth, with significant contributions from asset-backed securities (ABS) linked to Nissan. Despite a decrease in ABS investments over the past two years, they remain crucial for NGRe's cash flows. The ratings outlook is stable.
- Affirmation of Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Rating of 'a' (Excellent).
- Strong balance sheet strength assessed as very strong.
- Consistent growth in surplus from profitable operations.
- High credit quality of ABS investments contributing to strong cash flows.
- Decrease in ABS investments over the past two years.
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Nissan Global Reinsurance, Ltd. (NGRe) (Hamilton, Bermuda). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect NGRe’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The neutral business profile considers NGRe’s strategic role as a captive insurer for its parent, Nissan Motor Co., Ltd. (Nissan) [NASDAQ: NSANY].
The rating affirmations reflect NGRe’s continued profitable operations, which have resulted in consistent growth in surplus. NGRe’s balance sheet strength and the risks associated with its asset-backed securities (ABS) investments support its balance sheet strength. Although ABS investments have decreased over the past two years, they remain a material portion of NGRe’s portfolio. The company’s ABS investments originate at Nissan’s affiliated financing companies, which produce significant monthly income that contributes to strong operating cash flows. Despite its relative size, the underlying loans are considered of high credit quality and have been performing in accordance with expectations. The investment and liquidity risks related to ABS also were incorporated into this rating assessment.
NGRe is a single-parent captive of Nissan, one of the largest automakers in the world. In its role as a single-parent captive, NGRe provides Nissan with a host of insurance coverages in the United States and abroad, including but not limited to extended 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 programs.
AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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