AM Best Revises Under Review Status to Developing; Affirms Credit Ratings of LIA Holdings Limited's Subsidiaries
AM Best has revised the under review status to developing implications from negative implications and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "a-" (Excellent) of the following U.S. domestic and Bermuda operating entities of LIA Holdings Ltd. (Lombard International) (United Kingdom): Lombard International Life Assurance Company (Philadelphia, PA) and its wholly owned subsidiary, Lombard International Life Assurance Company of New York (New York, NY), along with Lombard International Life Assurance Company (Bermuda) Ltd. (Bermuda) and Lombard International Life Ltd. (Bermuda).
These Credit Ratings (ratings) were originally placed under review following the announcement by Lombard International Group that it had entered into a definitive agreement to sell its U.S.- and Bermuda-based businesses to BroadRiver Asset Management and its affiliated entities. The developing implications are due to AM Best's recent communications with BroadRiver Asset Management regarding its intentions and capitalization plans for the entities being acquired. These ratings will remain under review until the transaction closes, all customary regulatory approvals are received and AM Best evaluates BroadRiver Asset Management's role in these entities.
The ratings reflect Lombard International's consolidated 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 (ERM).
Lombard International Group maintains a solid position in the private placement European and U.S. life and annuity markets. Lombard International's business and liability profiles are lower risks, as they are primarily separate ccount platforms in which policyholders take the investment risk. Lombard International's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), is at the strongest level and benefits from the group's lower risk liability structure.
Partially offsetting these positive rating factors are the challenges related to operating in the specialized ultra-high net worth business, including the complexity of the customized products and services offered. AM Best also notes that the low-volume, high-premium nature of the private placement market and the volatility of capital markets also can impact the company's overall financial performance.
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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