OLDWICK, NJ–(BUSINESS WIRE)–AM Best Affirmed Toyota Motor Insurance Company (TMIC) (Cedar Rapids, IA) financial strength rating of A (Excellent) and issuer long-term credit rating of “a” (Excellent). The outlook for these Credit Ratings (ratings) is stable.
The ratings reflect TMIC’s balance sheet strength, which AM Best rates as the strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
TMIC’s balance sheet strength is supported by its highest level of risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio (BCAR), low underwriting and investment leverage ratios, excellent liquidity metrics and steady organic growth in surplus, reflecting favorable operating results, particularly over the past two years and into 2022. The proper assessment of TMIC’s operating performance is supported by performance that outpaced the industry over a five- and ten-year average, with results continuing to be positively impacted by lower coverage frequency and severity trends, primarily due to reduced vehicle utilization, as well as supply chain shortages, which subsequently increased demand for used vehicles, thereby increasing sales and premiums written. TMIC’s neutral business profile benefits from its relationship with its U.S. parent company, Toyota Motor Credit Corporation (TMCC), partially offset by its dependence on TMCC and the same factors that can negatively impact the automotive industry . The company’s proper ERM uses traditional risk management techniques specific to the automotive industry, and TMIC benefits from TMCC’s enterprise-wide risk management approach to capital management, innovation and security protocols.
The stable outlook reflects AM Best’s expectation that TMIC will maintain its strongest balance sheet strength rating, adequate operating performance and a neutral business profile without deviating from its risk profile as the automotive market navigates. through supply shortages and carbon neutrality.
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