AM Best has affirmed the financial strength rating of A (excellent) and the long-term issuer credit rating of “a” (excellent) of Bermuda-domiciled Nissan Global Reinsurance (NGRe). The outlook for the ratings is stable.
NGRe is a captive owned by Japanese car manufacturer, Nissan Motor Co, providing Nissan with a number of insurance coverages in the US 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 programmes.
While the company continues to generate strong annual earnings, the captive’s total surplus has declined over the past five years as its dividends returned to the parent have exceeded its earnings.
However, the company has ample liquidity with favourable cash flows for the captive’s selected risks and exposures.
AM Best expects there will not be changes in the parent’s willingness to support the captive even as it periodically returns excess capital to the parent.
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 balance sheet strength assessment is supported by NGRe’s level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), at the strongest level.