AM Best Confirms Toyota Motor Insurance Company Credit Ratings
Business insurance

AM Best Confirms Toyota Motor Insurance Company Credit Ratings

OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best confirmed Toyota Motor Insurance Company (TMIC) (Cedar Rapids, IA) long-term issuer credit rating of A (excellent) and long-term issuer credit rating of “a” (excellent). The outlook for these credit ratings (ratings) is stable.

The ratings reflect the strength of TMIC’s balance sheet, which AM Best considers to be the strongest, as well as its adequate operational performance, neutral business profile and appropriate enterprise risk management (ERM).

TMIC continues to maintain the strength of its balance sheet at the highest level, supported by its risk-adjusted capitalization as measured by Best’s capital adequacy ratio (BCAR), low underwriting leverage, organic growth and steady policyholder surplus, excellent liquidity and positive cash flow. AM Best believes the company‘s operating performance is adequate as the company’s results recently returned to historic levels after a few years of higher-than-expected losses of its Guaranteed Automobile Protection (GAP) business, which has since been re-priced and restored to profitability.

Amid the COVID-19 pandemic and general weakening economy, demand for new vehicle purchases has declined; however, in the fourth quarter of 2020 and through the second quarter of 2021, consumer confidence and demand for automotive products increased, and the true effects of price increases and underwriting initiatives on the GAP business of the have been carried out, showing a marked improvement in the performance of TMIC. results.

TMIC’s Business Neutral Profile supports the Toyota organization as a wholly owned and captive single parent subsidiary of Toyota Motor Insurance Services, Inc. TMIC provides vehicle maintenance contracts, GAP coverage, wear and tear coverage and Excessive Use, Tire and Wheel Protection, and Key Coverage for Toyota, Lexus and Mazda Customers, Dealers and Affiliates. AM Best considers TMIC’s ERM to be appropriate as the captive has benefited from the strong and formal business management practices that have been established and implemented by its US parent company, Toyota Motor Credit Corporation.

The stable outlook reflects AM Best’s expectations that the company will maintain its assessment of top-level balance sheet strength and adequate operating performance, while managing its volatile GAP product line and business profile. neutral without deviating from its risk profile.

AM Best remains the leading rating agency for alternative risk transfer entities, with more than 200 such vehicles rated in the United States and around the world. For Best’s current credit scores 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 published on the AM Best website. For all rating information relating to the release and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best Recent rating activity Web page. For more information on the use and limits of credit rating opinions, please see Best Credit Score Guide. For more information on the appropriate media use of Best’s credit scores and AM Best press releases, please see Media Guide – Appropriate Use of Best 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. Based in the United States, the company operates in more than 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 AM Best Rating Services, Inc. and / or its affiliates. ALL RIGHTS RESERVED.

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