Nissan Global Ratings Affirmed
A.M. Best Co. yesterday [Oct. 11] affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Bermuda-based Nissan Global Reinsurance, Ltd. [NGRe] and the outlook for both ratings is stable.
The ratings reflect NGRe’s strong capitalization and conservative operating strategy. The ratings also consider the company’s critical role and favourable profile as part of the Nissan Motor Co. Ltd., as well as its excellent operating performance, since its inception in 2005.
Partially offsetting these positive rating factors are the significant exposures NGRe has to product liability, property and marine cargo claims. Additionally, the recent deterioration in the financial markets and the decline in the profitability of automakers has had some impact on premium volumes; although, investment results have not been significantly affected. Furthermore, NGRe is expecting a reversal of those trends in the current year.
NGRe is a single parent captive of Nissan, the seventh-largest automaker in the world and third-largest in Japan.
NGRe operates two distinctive lines of business: (1) global property/casualty programs for Nissan, which include global property (United States, Japan, Europe, Mexico and South Africa), US workers’ compensation, US and Japan product liability and marine transport, and (2) global platform for extended service contract business. NGRe benefits from the group’s extensive risk management and loss control programs.
The captive operates at conservative underwriting leverage levels; however, it provides coverages with large limits, as such its gross exposures per loss occurrence are therefore elevated. Nevertheless, A.M. Best recognises the quality of the substantial financial resources and support available to the captive.
