AM Best has downgraded the Financial Strength Rating to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Rating to “a-” (Excellent) from “a” (Excellent) of Nissan Global Reinsurance, Ltd. (NGRe) (Hamilton, Bermuda). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect NGRe’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The neutral business profile considers NGRe’s strategic role as a captive insurer for its parent, Nissan Motor Co., Ltd. (Nissan) [NASDAQ: NSANY].

The stable outlooks reflect AM Best's expectation that the captive will maintain its very strong balance sheet strength supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), through continued positive operating results.

The downgrades reflect moderate weakening in the parent company’s credit profile, driven by global economic conditions and the recently enacted U.S. tariff policy. That said, the captive remains an integral component of the parent’s business plan and risk management framework and continues to support its strategic objectives and risk mitigation efforts.

The balance sheet strength assessment is supported by NGRe’s level of risk-adjusted capitalization at the strongest level. While NGRe has consistently generated strong annual earnings, its total surplus has declined over the past five years as dividends returned to the parent have exceeded those earnings. However, the captive maintains sufficient liquidity, supported by positive cash flows from its selected risks and exposures. NGRe’s operating performance assessment of adequate reflects consistent favorable annual combined and operating ratios over the last five years. As a single-parent captive for Nissan, one of the largest automakers in the world, NGRe provides Nissan a wide range of insurance coverages in the United States and abroad, including, but not limited to, extended service contracts, product liability and inland marine. As part of the Nissan family of companies, NGRe benefits from the group’s proprietary data warehouse, extensive risk management practices and loss control programs.

Negative rating action could occur if the captive's risk-adjusted capitalization weakens to a level that no longer supports its balance sheet strength assessment or if the captive's financial condition materially differs from projections through extraordinary dividends. Negative rating action could also occur if AM Best's perception changes in the parent's ability and willingness to support the company. Although unlikely in the near term, positive rating action could occur from a sustained trend in the company's positive operating performance.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

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 www.ambest.com.

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