A.M. Best Affirms Ratings Of Tokio Millennium Re

February 19, 2016

A.M. Best has affirmed the financial strength rating of A++ [Superior] and the issuer credit rating of “aa+” of Tokio Millennium Re AG. and the outlook for both ratings is stable.

A statement from the ratings agency said, “TMR is a wholly owned subsidiary of Tokio Marine & Nichido Fire Insurance Co., Ltd. [TMNF], which is the main trading subsidiary of Tokio Marine Holdings, Inc. [Tokio Marine Group]. Both companies are domiciled in Tokyo, Japan. TMR is domiciled in Switzerland, with branches in Australia, Bermuda, the United Kingdom and the United States.

“The ratings reflect TMR’s superior financial strength, solid risk management, favorable historical operating performance and very strong risk-adjusted capital position. In addition, TMR benefits from the global recognition and balance sheet strength of its parent, TMNF, as well as the implicit and explicit support provided by TMNF. The ratings also consider the key role that TMR plays in transferring and accepting extreme risks in the international reinsurance markets, which is a part of the groups’ overall strategy for geographic diversification.

“Tokio Marine Group has unified its global reinsurance brand under TMR over the past few years. TMR writes predominately property catastrophe and specialty reinsurance but has been slowly expanding into casualty reinsurance and non-cat reinsurance to diversify its book of business. TMR also continues to be a leader in transforming and transferring reinsurance risk to the capital markets through its Tokio Solutions Management Ltd. and Shima Re subsidiaries.

“TMR continues to innovate and improve its already strong enterprise risk management platform by continuing to enhance the overall risk ownership by each business unit. TMR’s property catastrophe modeling uses multiple commercial models as well as proprietary models, which have a scientific and quantitative focus. This multi-model approach allows TMR to assume risks that it can identify and model with a high degree of certainty. Given the company’s catastrophe risk exposures, TMR has a conservative asset strategy in place.

“Partially offsetting these positive rating factors are TMR’s exposure to low frequency, high severity catastrophic events and continued growth into newer markets [particularly through its U.S. branch], as well as diversification into casualty lines of business.”

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