Nissan captive's rating affirmed

The Bermuda-based captive insurer of Japanese car giant Nissan has had its financial strength rating of A affirmed by AM Best. The outlook of these Credit Ratings is stable.

The ratings reflect NGRe’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The neutral business profile considers NGRe’s strategic role as a captive insurer for its parent, Nissan Motor Co.  

Am Best said the rating affirmations reflect NGRe’s continued profitable operations, which have resulted in consistent growth in surplus. NGRe’s balance sheet strength and the risks associated with its asset-backed securities (ABS) investments support its balance sheet strength. Although ABS investments have decreased over the past two years, they remain a material portion of NGRe’s portfolio. The company’s ABS investments originate at Nissan’s affiliated financing companies, which produce significant monthly income that contributes to strong operating cash flows. Despite its relative size, the underlying loans are considered of high credit quality and have been performing in accordance with expectations. The investment and liquidity risks related to ABS also were incorporated into this rating assessment.

In its role as a single-parent captive, NGRe provides Nissan with a host of insurance coverages in the United States and abroad, including but not limited to extended service contracts, product liability and inland marine.

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