The Royal Bank of Canada Insurance Company Ltd (RBCICL) has retained its stable position as one of the country’s strongest reinsurers after its financial strength was deemed “Excellent” by rating agency A.M. Best.
The long-established, widely-trusted A.M. Best awarded RBCICL a financial strength rating of A following an independent evaluation of the company’s ability to meet their ongoing insurance obligations. RBCICL further cemented their place as a reliable reinsurer when they were also awarded a near Superior issuer credit rating of A+.
The issuer credit rating is based upon how well A.M. Best analysts deem a company is able to meet its ongoing senior financial obligations and while the grade system applied to the issuer credit rating is slightly different to that of the financial strength rating, both fields were found to be Excellent.
Overall, RBCICL has achieved a concrete status of excellence, which A.M. Best feels is a result of the company’s broad operating profile, solid capitalization and strong liquidity position. The company also boasts enviable profitability, which has continued to improve over the last five years.
However, while it may seem like clear skies ahead for RBCICL, A.M. Best identified one possible grey cloud on the horizon. As premium growth depends upon the strength of the global economy, any decline in Europe’s economy could negatively impact the RBCICL’s ability to develop new counterparty treaties which could in turn affect their A.M. Best rating.
