A.M. Best Places Ratings of The Toa Reinsurance Company, Limited and The Toa Reinsurance Company of America Under Review With Negative Implications

A.M. Best Co. has placed under review with negative implications and affirmed the financial strength rating of A+ (Superior) and issuer credit rating of “aa-” of The Toa Reinsurance Company, Limited (Toa Re) (Japan) and its subsidiary, The Toa Reinsurance Company of America (TRA) (Morristown, NJ).

The rating actions reflect that Toa Re has not provided an estimate for its losses in the 2011 Thailand floods.

A.M. Best is of the opinion that Toa Re's actual losses will be sizable relative to its capitalization, stemming from its exposure through its head office and overseas branches. As the sole domestic reinsurance company in Japan, Toa Re wrote a large portion of proportional treaty businesses with the major Japanese insurance companies, which in turn have high exposure to Thailand floods. TRA does not expect losses from the Thailand floods.

A.M. Best will revisit the under review status once Toa Re announces its losses from the Thailand floods.

The principal methodology used in determining these ratings is Best's Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Understanding Universal BCAR”; “Understanding BCAR for Property/Casualty Insurers”; “Catastrophe Analysis in A.M. Best Ratings”; and “Risk Management and the Rating Process for Insurance Companies.”

Methodologies can be found at www.ambest.com/ratings/methodology.

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