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FOR IMMEDIATE RELEASE
MEXICO CITY - MAY 14, 2020 02:44 PM (EDT)
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:
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.
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.
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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.