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Best’s News & Research Service - April 21, 2023 02:47 PM (EDT)

AM Best Affirms Credit Ratings of Members of Lumico Life Insurance Group; Withdraws Ratings of Lumico Life Ins Co of New York

  • April 21, 2023 02:47 PM (EDT)
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Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” (Excellent) of Lumico Life Insurance Company (Lumico) (Jefferson City, MO) and Elips Life Insurance Company (Elips) (headquartered in Schaumburg, IL). The outlook of these Credit Ratings (ratings) is stable. These two companies are referred to as Lumico Life Insurance Group.

Concurrently, AM Best has withdrawn the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of Lumico Life Insurance Company of New York (Armonk, NY) due to the company no longer being licensed in its domicile state of New York and no longer carrying any insurance liabilities. At the time of withdrawal, the outlook of these ratings was stable.

The ratings of Lumico Life Insurance Group reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and very strong enterprise risk management (ERM).

AM Best notes that Lumico Life Insurance Group’s overall ERM program through its parent, Swiss Re Ltd, is being leveraged throughout the whole organization. Furthermore, the group receives rating lift as it benefits from explicit parental support and is likely to receive future support, if needed, to grow operations. AM Best expects the group to continue to maintain its strategic importance to its parent in a supporting role of providing direct life insurance operations and receive rating enhancement.

The Lumico Life Insurance Group’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), continues to be assessed at the strongest level, benefiting from its conservative short-term investment portfolio for immediate liquidity needs and from very strong internal reinsurance support provided by Swiss Re, although the group’s absolute level of capital remains modest. There are no formal financial support guarantees extended to the Lumico Life Insurance Group from Swiss Re, but the ultimate parent has made previous capital infusions into the companies to support increased expenses and underwriting enhancements.

AM Best expects a mix of protection and health products to drive the Lumico Life Insurance Group’s premium growth going forward, with the focus on simple life insurance products and Medicare supplement products, which are sold by a variety of distribution partners leveraging different sales channels. Overall product design and pricing stands will continue to benefit from Swiss Re’s extensive data and underwriting expertise. The Lumico Life Insurance Group maintains a limited market position as it continues to grow and expand, and has not yet reached the breakeven point in terms of earnings, but is expected to do so in the near future.

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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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.

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