Travelers Insurance Designated Activity Company (TIDAC) (Ireland), the newly established European subsidiary of Travelers Companies, Inc., has obtained a Financial Strength Rating of A++ (Superior) from A.M. Best.
Travelers recently obtained a licence from the Central Bank of Ireland to write business from the Dublin-based unit, which will ensure continuity of service for Travelers’ European clients after Brexit.
A.M. Best also assigned the subsidiary a Long-Term Issuer Credit Rating of “aa+” and a stable outlook.
The rating agency explained that its assignments reflected Travelers’ impressive balance sheet strength, as well as its very strong operating performance, favourable business profile, and appropriate enterprise risk management.
The ratings also account for TIDAC’s importance to and integration within the Travelers group, A.M. Best said, in addition to the substantial reinsurance support the company receives from its immediate parent, Travelers Insurance Company Limited (TICL) (United Kingdom).
Travelers has stated that TIDAC will enable it to continue to service its policyholders across the European Economic Area (EEA), regardless of the terms of the UK’s withdrawal from the European Union (EU).
The unit reportedly benefits from strong explicit support from TICL, in the form of a significant whole account quota share and a stop loss “excess of assets over liabilities” cover that protects its minimum regulatory capital requirement under Solvency II.
The EU business previously written by TICL will be renewed into TIDAC beginning in March 2019, while TICL’s historical EU liabilities will be transferred to the new entity via a Part VII transfer.
A.M. Best expects TIDAC to underwrite a relatively small portfolio, mainly focused in property and general liability risks.
