AM Best Affirms Credit Ratings of Lumico Life Insurance Company

Business Wire

OLDWICK, N.J.--(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+” of Lumico Life Insurance Company (Lumico Life) (Jefferson City, MO). The outlook of these Credit Ratings (ratings) is stable. Additionally, AM Best has assigned an FSR of A (Excellent) and a Long-Term ICR of “a+” to Lumico Life Insurance Company of New York (Armonk, NY). The outlook assigned to these ratings is stable. Together, these two companies are referred to as Lumico Life, and are indirect subsidiaries of Swiss Re Ltd (Swiss Re).

Lumico Life Insurance Company was acquired through Swiss Re’s new iptiQ Americas, Inc. unit at the end of 2016, and re-branded in 2017 to Lumico Life. Lumico Life Insurance Company of New York was established and licensed in December 2018.

The ratings reflect Lumico Life’s balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, limited business profile and very strong enterprise risk management, as a member of the Swiss Re group. The ratings also receive lift from Lumico Life’s ultimate parent company, Swiss Re. AM Best expects the Swiss Re group to continue to provide reinsurance and capital support to Lumico Life when required, due to its important role in the Swiss Re group’s long-term plans to grow its direct individual life/health (L/H) insurance business in the United States.

Although the absolute level of capital is modest, Lumico Life’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), continues to be assessed at the strongest level as of year-end 2018, benefiting from its relatively conservative short-term investment portfolio and from very strong internal reinsurance support provided by the Swiss Re group, with no additional capital injections from Swiss Re projected in the near term. Lumico Life primarily underwrites simplified level term biometric products, with a focus on L/H retail policies mainly through distribution partnerships. Being still considered fairly new in the market area as a direct writer, the company has a limited market position and a concentrated portfolio in terms of products and distribution partners.

AM Best anticipates that Lumico Life will become profitable as of year-end 2018, with adequate earnings growth going forward, enabling it to be self-sufficient from a capital perspective. Additional diversification of earned premiums is coming from a mix of health and protection products, sold by a variety of distribution partners who leverage different sales channels, as six additional distributors were added in 2018. The company continues to build reserves and align appropriate assets to cover its liabilities.

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 Understanding 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 rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.