AM Best Affirms Credit Ratings of Lion Reinsurance Company Limited
July 19 2024 - 3:24PM
Business Wire
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 Lion Reinsurance Company Limited (Lion
Re) (Bermuda). The outlook of these Credit Ratings (ratings) is
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 assesses as very strong, as well as its adequate operating
performance, limited business profile and appropriate enterprise
risk management.
Lion Re is a Bermuda-based reinsurer assuming risks from ASSA
Tenedora affiliates for property, auto, liability, marine, group
life (short term), health and miscellaneous businesses. AM Best
recognizes the strategic role that Lion Re aims to achieve in the
group’s overall regional strategy; however, Lion Re’s business
profile is considered limited given its accessibility to markets
when compared with other commercial reinsurers.
Lion Re´s capital base is supportive of risk-adjusted
capitalization being assessed at the strongest level, as measured
by Best’s Capital Adequacy Ratio (BCAR). Lion Re continues to
perform an important role in ASSA Tenedora’s strategy as it
consolidates operations in the Central America region by providing
reinsurance capacity.
Lion Re’s adequate level of operating performance results from
its affiliated insurance companies in the Central America region,
as well as its affiliation to Grupo ASSA, which provides synergies,
operating efficiencies and guarantee support. The company reviews
its underwriting guidelines consistently to improve the performance
of its business segments that are deviating from targets.
Investment income, based on a conservative strategy, continues to
support Lion Re’s results; however, the company is not dependent on
this revenue to achieve positive bottom-line results. In 2023, the
company’s consistent profitability was reflected in a 36%
return-on-equity ratio.
Factors that could lead to positive rating actions include a
greater degree of perceived integration of Lion Re’s role within
the group while maintaining its guaranteed support of its parent.
Factors that could lead to negative rating actions include a
material loss of capital that reduces risk-adjusted capitalization
to a level that does not support the ratings, or if the strategic
importance of Lion Re to the group diminishes.
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.
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Salvador Smith Senior Financial Analyst +52 55
9085 7506 salvador.smith@ambest.com Eli Sanchez
Director, Analytics +52 55 9085 7503
eli.sanchez@ambest.com Christopher Sharkey Associate
Director, Public Relations +1 908 882 2310
christopher.sharkey@ambest.com Al Slavin Senior Public
Relations Specialist +1 908 882 2318
al.slavin@ambest.com