AM Best Revises Outlooks to Positive for Lewer Life Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating (FSR) of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of Lewer Life Insurance Company (Lewer Life) (Kansas City, MO).

These Credit Ratings (ratings) reflect the balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, very limited business profile and marginal enterprise risk management (ERM).

The revised outlooks reflect Lewer Life’s recently strengthened ERM program as manifested by its implemented ERM initiatives and ERM’s growing role in business strategy and decisions. In 2021, the company transitioned investment management to a firm specializing in the insurance industry to enhance performance and control costs. In addition, the organization updated its investment guidelines to include environmental, social, and governance considerations (ESG) and allow for private placement investment opportunities. Formal ESG elements enhance Lewer Life’s competitive position with its college and university clients.

From a strategic business development perspective, Lewer Life improved its position for future growth through its parent company’s investment ownership share of the Study Abroad Association, LLC (SAA), which provides the opportunity to grow premium and invest in new educational technology. Furthermore, the company bolstered its board of directors by adding independent directors experienced in health care, finance and actuarial practices. The board of directors has increased its focus and oversight of the company’s ERM activities, including formal reports and discussion of any shifts in risk levels. AM Best will continue to monitor further enhancements to Lewer Life’s ERM program and its role in business decisions.

Lewer Life’s balance sheet strength assessment of very strong is based on its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), partially offset by a relatively low level of absolute capital and surplus. Favorable operating performance has been driven by pre-tax net operating gains, owing to generally favorable underwriting experience and supplemented by stable investment income. Premium contracted in 2020 from a sharp decline in the international student population studying in the U.S. due to the pandemic. However, the company expects premium to grow at year-end 2021 due to headcount growth in its retained colleges and universities, and enrollment from several new schools added for the 2021-2022 policy school year. The very limited business profile reflects Lewer Life’s low market share and premium concentration in the highly competitive international student health insurance market, which has significant exposure to regulatory, event and market risks.

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 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 © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Brian Virostek
Financial Analyst

+1 908 439 2200, ext. 5531

[email protected]

Doniella Pliss
Director

+1 908 439 2200, ext. 5104

[email protected]

Christopher Sharkey
Manager, Public Relations

+1 908 439 2200, ext. 5159

[email protected]

Jim Peavy
Director, Communications

+1 908 439 2200, ext. 5644

[email protected]

Source: AM Best