Tokio Marine Canada Ltd. Receives A- Rating from AM Best

AM Best has confirmed an A- (Excellent) Financial Strength Rating and an "a-" (Excellent) Long-Term Issuer Credit Rating for Tokio Marine Canada Ltd. (TMC), based in Toronto, Ontario. The outlook for these ratings remains stable.

The evaluation of TMC's ratings emphasizes the company's solid balance sheet, categorized by AM Best as very strong. This strong financial position is attributed to TMC's risk-adjusted capitalization, validated through the Best’s Capital Adequacy Ratio (BCAR), and the ongoing support from its parent company, Tokio Marine & Nichido Fire Insurance Co., Ltd. TMC also benefits from financial flexibility, a conservative investment strategy, high-quality assets, and reinsurance with top-rated reinsurers. Nevertheless, AM Best points out that the execution risks typical of new ventures are potential concerns.

AM Best regards TMC's operating performance as satisfactory, highlighting the company's recent underwriting profitability and projected earnings growth. This assessment considers the expertise of TMC’s management team in underwriting, despite the challenges posed by its short operational history as it expands within the Canadian market.

The business profile of TMC is seen as limited, attributed to its emergent market presence in Canada and its brief operational history. However, TMC's strategic value to Tokio Marine, combined with its diverse range of commercial and specialty products and robust industry relationships, helps mitigate these concerns.

Enterprise Risk Management (ERM) at TMC is considered suitable, underpinned by a comprehensive framework modeled on the established risk management protocols of Tokio Marine Holdings, Inc. This includes clear risk appetite and tolerance parameters. Additionally, the operational and financial support from TMC’s parent company reinforces its role in Tokio Marine's international growth and revenue diversification.

For further information on these ratings or additional disclosures, visit AM Best’s Recent Rating Activity web page. Additional guidance on using Best’s Credit Ratings, Best’s Performance Assessments, and AM Best press releases is available in the Guide to Proper Use of Best’s Ratings & Assessments. AM Best is a leading credit rating agency and data analytics provider within the insurance sector, operating from its U.S. headquarters and offices worldwide.