Best’s News & Research Service - March 24, 2021 01:39 PM (EDT)
AM Best Removes From Under Review With Developing Implications and Affirms Credit Ratings of Aspida Life Re Ltd.
- March 24, 2021 01:39 PM (EDT)
Oldwick //BestWire// - AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Aspida Life Re Ltd. (Aspida Re) (formerly known as F&G Reinsurance Ltd.) (Bermuda). Aspida Re is a subsidiary of Aspida Holdings Ltd., which is an indirect subsidiary of Ares Management Corporation (Ares Management). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Aspida Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The ratings were placed under review with developing implications on Oct. 7, 2020, following the announcement that Fidelity National Financial, Inc (FNF) and its subsidiary Fidelity & Guaranty Life Insurance Company [NYSE: FNF], a leading provider of annuities and life insurance, had entered into a definitive agreement to sell F&G Reinsurance Ltd. to Aspida Holdings Ltd.
The rating actions follow the close of the transaction on Dec. 18, 2020, and include AM Best’s assessment of Aspida Re’s business strategy and capitalization, as well as risk management capabilities, going forward. AM Best expects that Aspida Re will maintain a very strong level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), with the support of its parent and potential future investors as it executes its strategy of engaging in reinsurance flow transactions and block acquisitions of primarily interest-sensitive annuity business. AM Best notes that Aspida Re plans to utilize the investment expertise of its parent, Ares Management, a leading alternative investment manager with almost $200 billion of assets under management, to restructure the portfolio in order to improve investment yields. While AM Best acknowledges the favorable track record and extensive investment experience of Ares Management, exposure to less liquid and somewhat higher risk investments in Aspida Re’s general account are expected to be somewhat elevated compared with industry averages.
AM Best believes that Aspida Re maintains an adequate risk management framework for its current risk profile, which includes investment risk tolerances and prudent asset-liability management, as well as good risk controls and stress testing capabilities. However, as a new company, AM Best believes that execution risks remain and will continue to monitor Aspida Re’s ability to appropriately price future reinsurance treaties and block acquisitions.
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 Guide to 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 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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.