A.M. Best has assigned a financial strength rating of B++ (Good)
and an issuer credit rating of "bbb+" to Ally International
Insurance Company Ltd. (Ally IICL), which is ultimately owned by
Ally Financial, Inc. (Ally Financial). The outlook assigned to both
ratings is stable. Ally IICL is domiciled in Hamilton, Bermuda.
The ratings of Ally IICL reflect its strong capital position and solid
operating performance in recent years. Ally IICL is a licensed Bermuda
Class 3A reinsurer and currently assumes via a quota share agreement 50%
of Canadian-based vehicle service contract business from an affiliate, Motors
Insurance Corporation (Canada Branch) (Motors CAB).
In addition, beginning Sept. 1, 2014, Ally IICL will also act as a
surplus lines fronting company for auto physical damage policies, taking
over for the existing surplus lines carrier (a non-affiliated company).
This surplus lines business will then be reinsured via a 100% quota
share agreement back to another affiliate, Motors Insurance
Corporation (Motors), with all losses and expenses for operating
this line to be absorbed by Motors. As a result, no underwritng
or investment income will be recorded in Ally IICL associated with this
business. Ally IICL has and will continue to play a very important
strategic role to Ally Financial and its affiliated companies going
forward, both as a reinsurer and fronting company.
Ally Financial is comprised of a leading automotive financial services
business and direct banking franchise. Ally Financial's automotive
services business offers a full suite of financing products and
services, including new and used vehicle inventory and consumer
financing, leasing, inventory insurance, commercial loans and vehicle
Potential upward movement on Ally IICL's ratings over the near term is
unlikely due to the current financial constraints at Ally Financial. In
the medium term, possible upward rating movement could result from the
continued reduction in U.S. Government ownership of Ally Financial.
Possible downward movement on the ratings could result from a reduction
in profitability due to a decline in U.S. auto sales, a corresponding
decline in vehicle service contract revenues, and/or lower earnings at
The methodology used in determining these ratings is Best's Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best's rating process and contains the different rating criteria
employed in the rating process. Best's Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS
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