AM Best affirmed the financial strength rating of A (Excellent) and the long-term credit rating of “a+” (Excellent) of
The ratings reflect the strength of TD Re’s balance sheet, which AM Best rates as very strong, as well as its strong operating performance, neutral business profile and appropriate management of business risks.
TD Re is a life and general insurance reinsurer ultimately owned by The Toronto-Dominion Bank (TD Bank). TD Re primarily reinsures credit insurance policies underwritten by third-party life insurance companies on consumer loans issued by TD Bank’s Canadian retail branches. The company has also reinsured homeowners and private passenger auto insurance with a 25% co-payment agreement with another TD Bank subsidiary since 2017. Despite the implications of the COVID-19 pandemic, TD Re maintained its strong return on equity through favorable underwriting results and favorable growth. risk-adjusted capital position through the end of its 2021 fiscal year. The company also continues to maintain multiple high-quality investment portfolios that are managed to match the specific liability profiles of the business it supports .
These strengths are partially offset by a reliance on Canadian consumer loans for growth and a slow shift in business mix over time towards general insurance. Due to the digitization of banking services, the elimination of face-to-face transactions and the acceleration thereof following the COVID-19 pandemic, creditor premiums have tended to decline over the long term. Additionally, while earnings have been favorable for the general insurance line of business so far, the homeowner and passenger vehicle lines of business are considered riskier and more capital intensive than the lines of business. creditors.
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Source: AM Best