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AM Best Affirms Credit Ratings of Scotia Insurance (Barbados) Limited
[May 21, 2020]

AM Best Affirms Credit Ratings of Scotia Insurance (Barbados) Limited

AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of "a+" of Scotia Insurance (Barbados) Limited (Scotia Insurance) (Barbados). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Scotia Insurance's balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

Scotia Insurance is primarily a life reinsurer that ultimately is owned by The Bank of Nova Scotia (Scotiabank). Scotia Insurance principally reinsurers credit insurance policies underwritten by major third-party life insurance carriers on consumer loans originated by Scotiabank's retail branches throughout Canada. The company has a long history of favorable underwriting results through conservative underwriting that has continued through 2019. The company is bolstered further by a favorable risk-adjusted capitalization and an investment portfolio that provides the entity with substantial liquidity.

These strengths are offset partially by Scotia Insurance's dependence on consumer loan originations within Canada, which are likely to decline during the COVID-19 pandemic. This, coupled with a slowing of creditor insurance cross-sell on loans in recent years, is expected to lead to a decline in premium levels in the near term. Furthermore, the company maintains a high dividend payout ratio that has resulted in a lack of absolute capital expansion. However, M Best notes that in a stress scenario, Scotia Insurance could recapitalize by adjusting its shareholder dividend payout.

This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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