Tokio Millennium Re Ltd’s financial strength rating has been upgraded to A++ (superior) from A+ (superior) and its issuer credit rating to “aa+” from “aa-” by AM Best Co.The outlook for both ratings is stable.Tokio Millennium is a wholly-owned subsidiary of Tokio Marine & Nichido Fire Insurance Co Ltd, which is the main trading subsidiary of Tokio Marine Holdings Inc. Both companies are domiciled in Tokyo, Japan.Best said that Tokio remained strategically important to Tokio Marine Group’s initiatives to geographically diversify its aggregation of natural perils, help enhance its enterprise risk management and ultimately establish a diversified portfolio that provides earnings stability. Over the past year, Tokio Marine Group has taken steps to unify its global reinsurance brand under Tokio Millennium, said the ratings agency.Best said that the ratings reflected Tokio Millennium’s superior financial strength, favourable operating performance over the past several years and its prudent risk management practices. In addition, the ratings were enhanced by the implicit and explicit support provided by Tokio Marine & Nichido Fire. The ratings also consider Tokio Millennium’s role within the Tokio Marine Group and its strategic importance to the organisation, which has become more evident given the branding initiative and structural realignment that was approved by Tokio Marine Group in the second half of 2010, said Best.Furthermore, Best said that Tokio Millennium maintained a conservative investment portfolio, in part, to position itself for strong risk taking capacity from an underwriting perspective.Partially offsetting these positive rating factors was Tokio Millennium’s exposure to low frequency, high severity catastrophic events, as evidenced by the New Zealand earthquake in February 2011. The losses from the New Zealand earthquake have significantly impacted Tokio Millennium’s financial performance for this year; however, the company remained well capitalised and well-positioned to take advantage of improving property catastrophe rates in the global market place, said Best.Tatsuhiko Hoshina, Tokio Millennium’s president and CEO, said: “We are very pleased that AM Best has recognised our financial strength, commitment to enterprise risk management, and significance of TMR as a key pillar of Tokio Marine Group’s globalisation plan.“We believe that our upgrade will continue to enhance the confidence and trust that our clients, brokers and business partners have placed in us, as well as encourage new partners to work with our talented team of professionals.”