AM Best has upgraded the credit ratings of the Bermudian-based captive insurer of the Japanese car maker Nissan.
Nissan Global Reinsurance Ltd’s financial strength rating was raised a notch to A from A-, while its long-term issuer rating was lifted to “a” from “a-”.
AM Best said the ratings reflected NGRe’s balance sheet strength, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The ratings of NGRe were upgraded based on AM Best’s assessment of NGRe’s balance sheet strength and the risks associated with its significant asset-backed securities (ABS) investments. “The company’s sizeable ABS investments originate at Nissan’s affiliated financing companies,” AM Best commented.
Despite its substantial relative size, the underlying loans are considered of high credit quality and have been performing in accordance with expectations. These investments play an integral role in NGRe’s capital resources and generate substantial cash flows that also drive a principal source of earnings for NGRe.
“The investment and liquidity risks related to ABS also were incorporated into this rating assessment.”
NGRe is a single-parent captive of Nissan, one of the largest automakers in the world. In its role as a single-parent captive, NGRe provides Nissan with a host of insurance coverages in the US and abroad.