A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit rating of “a+” of Royal Bank of Canada Insurance Company Ltd. The outlook for both ratings is stable.

Barbados-based RBC Insurance Co. is primarily a life reinsurance company, which is ultimately owned by Toronto-based Royal Bank of Canada.

RBC Insurance Co. primarily reinsures life and health insurance risks from unaffiliated international reinsurers as well as credit reinsurance risk from European reinsurers.

The ratings consider the leading market position of the firm’s relative to its peers, its solid risk-adjusted capitalization and broad geographical spread of risk, A.M. Best says.

A.M. best notes that the insurer’s financial strength and high profitability margins are based upon a sound business model, conservative investments in high quality assets and liquidity resources that are well matched to the company’s liability profile.

The investment portfolio does not hold the mortgage related securities that are causing significant problems at many financial institutions, it adds.

“A.M. Best believes that RBC Insurance Co. is well positioned to profitably grow premium volume over the long term,” the ratings agency says.

IE