Press Release - MAY 11, 2018

A.M. Best Affirms Credit Ratings of Scotia Insurance (Barbados) Limited


CONTACTS:
 Kevin Varvaro
Financial Analyst
+1 908 439 2200, ext. 5487
kevin.varvaro@ambest.com

William Pargeans
Director
+1 908 439 2200, ext. 5359
william.pargeans@ambest.com
Christopher Sharkey
Manager, Public Relations
(908) 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
(908) 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - MAY 11, 2018
A.M. 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 A.M. Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. The company maintains the strongest level of risk-adjusted capitalization with a high return on equity while maintaining sufficient liquidity.

Scotia Insurance is primarily a life reinsurer that is ultimately owned by The Bank of Nova Scotia (Scotiabank). Scotia Insurance principally reinsurers credit insurance policies underwritten by 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 2017.

These strengths are offset partially by Scotia Insurance’s dependence upon consumer loan originations within Canada, and how such products are offered. The creditor insurance cross-sell on loans has slowed recently, due in part to the digitalization of banking and the loss of face-to-face sales. Furthermore, the company maintains a high dividend payout ratio that has resulted in a lack of absolute capital expansion. However, A.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 A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.


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AMB# Company Name
030195 Bank of Nova Scotia
057051 Scotia Insurance (Barbados) Ltd