MAY 14, 2020 02:44:01 Eastern Daylight Time

AM Best Upgrades Credit Ratings of Lion Reinsurance Company Limited


CONTACTS:
 Salvador Smith
Financial Analyst
+52 55 1102 2720, ext. 109
salvador.smith@ambest.com

Alfonso Novelo
Senior Director, Analytics
+52 55 1102 2720, ext. 107
alfonso.novelo@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

MEXICO CITY - MAY 14, 2020 02:44:01 Eastern Daylight Time
AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” from “a-” of Lion Reinsurance Company Limited (Lion Re) (Bermuda). The outlook of these Credit Ratings (ratings) remains stable.

Lion Re is a subsidiary of ASSA Compañía Tenedora S.A. (ASSA Tenedora) and is owned ultimately by Grupo ASSA, S.A. (Grupo ASSA), a financial services holding company publicly traded on the Panama Stock Exchange.

The ratings reflect Lion Re’s balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The ratings also reflect Lion Re´s continued adequate operating performance resulting from its affiliated insurance companies in the region and from new strategic business alliances, strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and its affiliation to Grupo ASSA, which provides synergies, operating efficiencies and guarantee support.

Lion Re is a Bermuda-based reinsurer assuming risks from ASSA Tenedora and affiliates for property, liability, marine, life, health and miscellaneous businesses. The company provides reinsurance as part of the group´s retrocession cover with a geographical exposure to Central America’s insurance market.

The company continues to support ASSA Tenedora’s strategy while producing positive bottom-line results amid healthy prospects for growth. AM Best expects Lion Re to continue playing an important role in ASSA Tenedora’s strategy, as it consolidates operations in new regions by providing reinsurance capacity while maintaining its capital base expansion. Lion Re consistently reviews its underwriting guidelines to improve the performance of business segments that are deviating from targets. Investment income, based upon a more conservative strategy, continues to support Lion Re’s results; however, the company is not dependent on this revenue to achieve positive bottom-line results.

Factors that could lead to an upgrade of the ratings or positive outlooks for Lion Re include consistently positive bottom-line results that can contribute to further strengthening of its risk-adjusted capitalization over the next few years, while maintaining guarantee support. Factors that could lead to negative rating action include a material loss of capital, which leads to a reduced level of risk-adjusted capitalization that does not support its ratings, and a diminished strategic importance.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of AM 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.

Key insurance criteria reports utilized:


  • Available Capital & Holding Company Analysis (Version Oct. 13, 2017)

  • Alternative Risk Transfer (Oct. 13, 2017)

  • Catastrophe Analysis in AM Best Ratings (Version Oct. 13, 2017)

  • Evaluating Country Risk (Version Oct. 13, 2017)

  • Scoring and Assessing Innovation (March 5, 2020)

  • Understanding Universal BCAR (Version May 23, 2019)

View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, please refer to Guide to Best’s Credit Ratings.


  • Previous Rating Date: June 7, 2019

  • Date Range of Financial Data Used: Dec. 31, 2014-Dec. 31, 2019

This press release relates to rating(s) that have been published on AM Best’s website. For additional rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page.

AM Best does not validate or certify the information provided by the client in order to issue a credit rating.

While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. AM Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, AM Best cannot attest as to the accuracy of the information provided.

AM Best’s credit ratings are independent and objective opinions, not statements of fact. AM Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. AM Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

AM Best receives compensation for interactive rating services provided to organizations that it rates. AM Best may also receive compensation from rated entities for non-rating related services or products offered by AM Best. AM Best does not offer consulting or advisory services. For more information regarding AM Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the AM Best Code of Conduct. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.


Related Companies

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AMB# Company Name
055653 Grupo ASSA, S.A.
091769 Lion Reinsurance Company Limited