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Press release content from Business Wire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Business Wire
Press release content from Business Wire. The AP news staff was not involved in its creation.

AM Best Affirms Credit Ratings of Toyota Motor Insurance Company

July 2, 2021 GMT

OLDWICK, N.J.--(BUSINESS WIRE)--Jul 2, 2021--

AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Toyota Motor Insurance Company (TMIC) (Cedar Rapids, IA). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect TMIC’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

TMIC continues to maintain balance sheet strength at the strongest level supported by its risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), low underwriting leverage, organic and steady growth of policyholders’ surplus, excellent liquidity and positive cash flows. AM Best assesses the company’s operating performance as adequate as the company’s results have recently returned to historical levels following a couple of years of higher than expected loss experience from its guaranteed auto protection (GAP) business, which has since been repriced and restored to profitability.

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Amid the COVID-19 pandemic and the overall weakening of the economy, the demand in new vehicle purchases declined; however, by the fourth quarter of 2020 and through the second quarter of 2021, consumer confidence and demand for auto products increased, and the true effects of rate increases and underwriting initiatives on the company’s GAP business had been realized, showing a marked improvement in TMIC’s results.

TMIC’s neutral business profile supports the Toyota organization as a wholly owned subsidiary and single-parent captive of Toyota Motor Insurance Services, Inc. TMIC provides vehicle service contracts, GAP coverage, excess wear and use coverage, tire and wheel protection, and key coverage for Toyota, Lexus, and Mazda customers, dealers and affiliated companies. AM Best considers TMIC’s ERM to be appropriate, as the captive has leveraged the robust and formal corporate management practices that have been established and implemented by its U.S. parent, Toyota Motor Credit Corporation.

The stable outlooks reflect AM Best’s expectation that the company will maintain its balance sheet strength assessment at the strongest level and its operating performance at the adequate level, while managing its volatile GAP product line and neutral business profile without diverging from its risk profile.

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AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com:https://www.businesswire.com/news/home/20210702005271/en/

CONTACT: Vicky Riggs

Senior Financial Analyst

+1 908 439 2200, ext. 5039

vicky.riggs@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.comDaniel Ryan

Senior Director

+1 908 439 2200, ext. 5325

daniel.ryan@ambest.com

Jim Peavy

Director, Communications

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

KEYWORD: NEW JERSEY EUROPE UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: INSURANCE PROFESSIONAL SERVICES

SOURCE: AM Best

Copyright Business Wire 2021.

PUB: 07/02/2021 10:10 AM/DISC: 07/02/2021 10:11 AM

http://www.businesswire.com/news/home/20210702005271/en