AM Best maintains Toyota Motor Insurance ratings, outlook '"stable".
BANKING AND CREDIT NEWS-11 June 2010-AM Best maintains Toyota Motor Insurance ratings, outlook '"stable"(C)1994-2010 M2 COMMUNICATIONS http://www.m2.com
11 June 2010 - AM Best upheld on Thursday the A- (excellent) financial strength rating (FSR) and the issuer credit rating (ICR) of US Toyota Motor Insurance Company (TMIC).
The outlook is "stable".
The ratings reflect the company's adequate capitalisation and improved operating performance, AM Best explained.
TMIC's ultimate parent has consistently provided financial support to its subsidiary in order for it to maintain its current rating level. TMIC plays a strategic role as the insurer to providers of vehicle service agreements and guaranteed auto protection sold through Toyota, Lexus and affiliated dealerships throughout the US, the rater added.
Partially offsetting these positive rating factors are TMIC's leverage measures within the most recent five-year period, the analysts noted.
To improve underwriting results, management instituted rate increases on its vehicle service agreements programme (VSA programme) in both 2004 and 2009.
Rate increases to its guaranteed auto protection programme (GAP programme) went into effect in 2005.
As its re-priced policies continue to earn out, results have improved. Beginning in 2005, it changed the payment method of its administrative expenses from up front to as incurred. This change has lowered overall expense ratios, AM Best elaborated.
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|Publication:||M2 Banking & Credit News (BCN)|
|Date:||Jun 11, 2010|
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