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Best’s News & Research Service - December 13, 2018 02:25 PM (EST)

AM Best Removes from Under Review with Developing Implications and Upgrades Credit Ratings of Elips Life Insurance Company

  • December 13, 2018 02:25 PM (EST)
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Oldwick //BestWire// - AM Best has removed from under review with developing implications and upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a+” from “a-” of Elips Life Insurance Company (elipsLife) (headquartered in Schaumburg, IL, USA) (formerly MAPFRE Life Insurance Company). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect elipsLife’s balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, limited business profile and very strong enterprise risk management. The ratings also receive lift from elipsLife’s ultimate parent company, Swiss Re Ltd. AM Best expects the Swiss Re group to continue to provide reinsurance and capital support to elipsLife when necessary, due to its important role in the Swiss Re group’s long-term plans to grow its direct group life and health insurance business in the United States. Swiss Re acquired elipsLife in April 2018.

AM Best expects elipsLife to benefit from quota share reinsurance protection from Swiss Re. No additional capital infusions are planned over the near term unless they become necessary to support growth and cover initial start-up costs. elipsLife will be Swiss Re’s primary direct writer of group life and health insurance in the United States, and will follow the already established business model in Europe. elipsLife will have an integrated information technology environment to increase efficiency and improve the overall customer experience as the business grows.

The balance sheet strength assessment takes into consideration the company’s initial capitalization with a sufficient amount of liquidity to fund any potential cash outflows, projected conservative investments portfolio and reinsurance agreements with its highly rated parent. Additionally, the ratings reflect expectations derived from the company’s business plans, the experienced management team and the near-term earnings from the establishment of deep relationships with meaningful insurance brokers as elipsLife develops an effective distribution strategy.

elipsLife’s business profile is viewed as limited due to the start-up nature of the business, the lack of product diversification and risk exposure during the company’s first few years of operation. The group life and health insurance market segment is considered very competitive, with many large carriers and strong price competition. The company’s ability to execute its business plan will be a key rating factor going forward, as well as its support from Swiss Re. AM Best will closely monitor elipsLife to ensure that targeted results are realized as planned.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. 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 rating agency and information provider with a unique focus on the insurance industry.



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