AM Best Affirms Credit Ratings of Scotia Reinsurance Limited

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

The ratings reflect Scotia Re’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile, appropriate enterprise risk management, and implicit support from the greater organization.

Scotia Re is primarily a life reinsurance subsidiary that assumes non-Canadian business, largely from Mexico, South and Central America and the Caribbean, sourced through retail operations of the company’s ultimate parent, The Bank of Nova Scotia (Scotiabank). The initial book of business was assumed in 2017 from Scotia Insurance (Barbados) Limited, which has a long history of favorable underwriting results. The assumed business produced favorable return metrics under Scotia Re after its fourth full year in operation despite challenges from operating within the COVID-19 pandemic environment. The company’s balance sheet strength is bolstered further by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), reflecting in part a conservative short duration and highly liquid investment portfolio.

These strengths are offset partially by the company’s dependence for growth on lending product originations in economies outside of Canada, many of which are deemed to have higher country risk profiles.

With a slowdown of the global economy from the lasting effects of the COVID-19 pandemic, it is likely Scotia Re will continue to see a decline in assumed premiums over the near term. Furthermore, AM Best notes that despite the company managing capital to specific internal targets, which has kept absolute capitalization levels largely flat, Scotia Re could recapitalize in a stress scenario 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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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