OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best Co. has affirmed the financial strength rating of A
(Excellent) and issuer credit rating of “a+” of TD Reinsurance
(Barbados) Inc. (TD Re) (Barbados). The outlook for both ratings is
TD Re is a life reinsurer that is ultimately owned by The
Toronto-Dominion Bank (TD Bank) (Toronto, Ontario). TD Re
principally reinsures credit insurance policies underwritten by
third-party life insurance carriers on consumer loans originated by its
Canadian retail bank branches. Subsequently, TD Re retrocedes those
Canadian risks to several unaffiliated reinsurers and accepts
non-Canadian risks of a similar nature from those unaffiliated
The rating affirmations reflect TD Re’s continuing pattern of strong
profitability, solid capitalization, strong liquidity and conservative
investment portfolio. Additionally, the ratings recognize the high
credit quality of TD Re’s investment portfolio, which provides good
liquidity and is invested primarily in AAA-rated securities of short
duration that match its liability profile.
These strengths are partially offset by historically high shareholder
dividend payouts and dependence upon consumer loan originations for
growth. While overall operating fundamentals of TD Re and TD Bank remain
strong, a potential decrease in consumer loan originations in Canada
could impact TD Bank’s ability to sell credit insurance. Additionally, a
further decline in economic conditions in Europe could impact TD Re’s
ability to retrocede assumed risks to its European counterparties.
TD Re is considered well positioned at its current rating level.
Positive rating actions are unlikely in the near or intermediate term.
Factors that may cause negative rating actions include significant
adverse changes in TD Re’s capitalization, operating performance or
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Best’s Credit Rating Methodology can be
found at http://www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS
A.M. Best Co.Anthony McSwieney, 908-439-2200, ext. 5715Senior
Mirabella, CPA, CFA, 908-439-2200, ext.5892Managing Senior
Morrow, 908-439-2200, ext. 5378Senior Manager, Public
Peavy, 908-439-2200, ext. 5644Assistant Vice President,
Source: A.M. Best Co.