News Column

A.M. Best Affirms Ratings of CIBC Reinsurance Company Limited

August 6, 2014



OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Besthas affirmed the financial strength rating of A (Excellent) and the issuer credit rating of ďa+Ē of CIBC Reinsurance Company Limited (CIBC Re) (Barbados). The outlook for both ratings is stable.

CIBC Re is a life reinsurance subsidiary that is ultimately owned by the Canadian Imperial Bank of Commerce (CIBC) (Toronto, Ontario). CIBC Re principally reinsures credit insurance policies that have been underwritten by third-party life insurance carriers on consumer mortgages, loans and credit cards originated by CIBCís Canadian branches. CIBC Re subsequently retrocedes these risks to several unaffiliated reinsurers and accepts non-Canadian risks of a similar nature from those unaffiliated reinsurers. To a lesser extent, CIBC Re also participates in excess retrocession pools within the United States and Canada under a variety of treaties.

The rating affirmations reflect CIBC Reís strong capitalization, favorable operating earnings and a conservative investment portfolio. Moreover, the ratings factor in CIBC Reís enterprise risk management framework, which is well integrated into CIBC, and the high credit quality and strong liquidity of CIBC Reís investment portfolio that consists entirely of term bank deposits with a CIBC affiliate.

These positive rating factors are partially offset by CIBC Reís dependence upon consumer loan originations for premium growth, which have a potential to decline if consumer loan originations slow in the Canadian market. Additionally, a decline in economic activity in Europe could impact CIBC Reís ability to retrocede assumed risks to its European counterparties.

Positive rating actions are unlikely in the near to intermediate term. Factors that could cause negative rating actions include a significant decline in the companyís capitalization or business outlook, a decline in operating performance that impacts its business model, or negative rating actions at CIBC. Additionally, potential tax changes announced by Revenue Canada may have a negative impact on the operating and business profile of CIBC Re.

The methodology used in determining these ratings is Bestís Credit Rating Methodology, which provides a comprehensive explanation of A.M. Bestís rating process and contains the different rating criteria employed in the rating process. Bestís Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2014 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.




A.M. Best Company, Inc.

Anthony McSwieney,908-439-2200, ext. 5715

Senior Financial Analyst

anthony.mcswieney@ambest.com

or

William Pargeans, 908-439-2200, ext. 5359

Assistant Vice President

william.pargeans@ambest.com

or

Christopher Sharkey, 908-439-2200, ext. 5159

Manager, Public Relations

christopher.sharkey@ambest.com

or

Jim Peavy,908-439-2200, ext. 5644

Assistant Vice President, Public Relations

james.peavy@ambest.com


Source: A.M. Best Company, Inc.


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