Bermuda-based Tokio Millennium Re Ltd. has been affirmed the financial strength rating of A+ (superior) and issuer credit rating of "aa-" by AM Best Co.

The outlook for both ratings is stable.

Tokio is a wholly owned subsidiary of Tokio Marine and Nichido Fire Insurance Company Ltd., (TMNF) which is the main trading subsidiary of Tokio Marine Holdings Inc. (Tokio Marine Group).

The ratings agency said that Tokio remains strategically important to Tokio Marine Group's overseas expansion initiative to geographically diversify the group's aggregation of natural perils. It benefits from the global recognition and balance sheet strength of TMNF.

Best said the ratings reflect Tokio's excellent financial strength, favourable operating performance over the last several years and its prudent risk management practices.

"The excellent financial strength also takes into consideration the historical implicit and explicit support provided by TMNF. In 2008, Tokio was one of only a few companies in the Bermudian market to grow shareholders' equity year over year, which left it well-positioned to take advantage of market opportunities in 2009," Best said.

The ratings agency said that partially offsetting these positive rating factors was Tokio's exposure to low frequency, high severity catastrophic events, which could dampen profitability and/or inflict large losses on the company.