On Sep 24, the financial strength rating (FSR) and issuer
credit rating (ICR) of Nissan Global Reinsurance, Ltd., a
single-parent captive of
Nissan Motor Co. Ltd.
), was affirmed at "A-" and "a-", respectively, by A.M. Best Co.
The rating agency assigned a stable outlook for both the
The rating affirmations were based on Nissan Global's strong
track record of profitability since inception, sturdy capital
position, and conservative approach to business, partly offset by
risks related to exposure to product liability, property and
marine cargo claims. Additionally, the company's strategic role
as part of Nissan Motor, and the positive impact of the parent
company's risk management and loss control programs, also
supported the ratings.
Nissan Global has ample funds at its disposal and gets
significant support from Nissan Motor. Moreover, the company has
low underwriting risk due to its strategy of maintaining a low
leverage level. However, the large size of its individual
coverage leads to high gross exposures per loss occurrence.
As A.M. Best has affirmed the ratings after accounting for
Nissan Global's operating and financial strength, it does not
expect any rating upgrade or outlook revision before 1-2 years.
However, the rating agency can revise the ratings downward or
change the outlook on the ratings following several factors.
These include a significant decline in operating results, erosion
in capital base due to insured losses, fall in Best's Capital
Adequacy Ratio (BCAR), and major changes in the management team
and risk management controls and tolerances.
Nissan Motor currently carries a Zacks Rank #1 (Strong Buy).
Other outperformers in the foreign automobile sector that are
worth considering are
Honda Motor Co., Ltd.
Fuji Heavy Industries Ltd.
). Fuji and Volkswagen carry a Zacks Rank #1 (Strong Buy), while
Honda Motor carries a Zacks Rank #2 (Buy).
FUJI HEAVY ADR (FUJHY): Get Free Report
HONDA MOTOR (HMC): Free Stock Analysis Report
NISSAN ADR (NSANY): Get Free Report
VOLKSWAGEN-ADR (VLKAY): Get Free Report
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