AM Best Affirms Credit Ratings of Aspida Life Insurance Company and Aspida Life Re Ltd.
June 21 2024 - 10:07AM
Business Wire
AM Best has affirmed the Financial Strength Rating of A-
(Excellent) and the Long-Term Issuer Credit Rating of “a-”
(Excellent) of Aspida Life Insurance Company (Aspida Life) (Durham,
NC) and Aspida Life Re Ltd. (Aspida Re) (Bermuda), collectively
referred to as Aspida Group. The outlook of these Credit Ratings
(ratings) is stable.
The ratings reflect Aspida Group’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 stable outlooks reflect the expectation that Aspida Group
will maintain the strength of their balance sheet and overall
liquidity sources with support from Ares Management Corporation
(Ares) [NYSE:ARES] and third-party investors as it executes its
business strategy of reinsurance growth through block acquisitions
and flow reinsurance treaties and retail growth through expanding
its distribution partners and its competitive annuity product
suite. The outlooks also reflect the maintenance of an appropriate
enterprise risk management framework. Operating trends are expected
to remain positive over the near to medium term as management
continues to focus on interest rate spread management.
The very strong balance sheet strength assessment considers
Aspida Group’s risk-adjusted capitalization being at the strongest
level, as measured by Best’s Capital Adequacy Ratio (BCAR), and AM
Best’s expectation that Aspida Group will maintain similar levels
of capital strength as the company executes its growth
strategies.
AM Best believes that Aspida Group will continue to benefit for
the foreseeable future from significant capital infusions and
financial resources of Ares and other investors.
Aspida Group had profitable adjusted operating income in 2023
and expects to continue to grow its operating income steadily
driven by notable premium growth in both of its operating entities
for the foreseeable future. Ares Insurance Solutions (AIS), a
resource of Ares dedicated to Aspida Group, has repositioned and
deployed assets, focusing on structured credit to increase interest
rate spread and yield. While AM Best acknowledges the favorable
track record and extensive investment experience, exposure to less
liquid investments in Aspida Group’s general accounts are somewhat
elevated compared with industry averages. Over the longer term, AM
Best expects that Aspida Group will demonstrate increasing returns
on capital.
In its neutral business profile assessment of Aspida Group, AM
Best recognizes that both main operating entities are driving
growth through their respective business plans and that Aspida
Group is building a recognizable brand. Aspida Group does remain
concentrated in interest-sensitive annuities, which currently
account for all of its business.
Aspida Group benefits from a sound enterprise risk management
approach with a well-developed framework and significant controls
in place to mitigate risks. The company also conducts extensive
stress testing as required by regulators.
As with any newer organization, Aspida Group face execution
risks, which are magnified by the increasing competitive annuity
market environment. AM Best will continue to monitor their ability
to execute on their current business plans without any material
adverse deviation from expected levels of capitalization levels and
earnings.
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. For more information,
visit www.ambest.com.
Copyright © 2024 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Stephen Vincent Senior Financial Analyst +1 908
882 1705 stephen.vincent@ambest.com Christopher Sharkey
Associate Director, Public Relations +1 908 882 2310
christopher.sharkey@ambest.com Michael Porcelli Senior
Director +1 908 882 2250 michael.porcelli@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com
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