A.M. Best Co. announced that it has assigned a financial strength rating of “A” (Excellent) to TD Reinsurance (Barbados) Inc. with a stable outlook.
“The rating reflects TD Re’s very strong and consistent operating performance, excellent capitalization and favorable liquidity position,” said best. “Partially offsetting these strengths is the highly competitive nature of the life reinsurance market and historical reliance upon credit insurance for new business growth.”
Best noted that “the company’s financial strength is enhanced by superior returns, which recognizes its disciplined underwriting, a focused strategy on its core life reinsurance business and adherence to sound investment practices resulting in strong annual earnings growth. Although surplus growth has been offset by stockholder dividends, TD Re maintains a capital position, which adequately supports its life reinsurance activities. Moreover, TD Re’s balance sheet is supported by a portfolio of high quality assets. Its superior underwriting results and liquidity position are sustained by its conservative operating philosophy.”
Despite the strong operating fundamentals, Best said it believes “the company is subject to business fluctuations and competitive pressures prevailing in its core life and health business. Additionally, the continued low interest rate environment and the highly competitive nature of the life reinsurance market may pressure future earnings growth and present challenges to the maintenance of superior financial performance.”
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