AM Best Affirms Credit Ratings of Lumen Re Ltd.
2024年5月11日 - 12:51AM
ビジネスワイヤ(英語)
AM Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Rating of “a”
(Excellent) of Lumen Re Ltd. (Lumen Re) (Bermuda). The outlook of
these Credit Ratings (ratings) is stable.
The ratings reflect Lumen Re’s balance sheet strength, which AM
Best assesses as strongest, as well as its adequate operating
performance, limited business profile and appropriate enterprise
risk management (ERM).
Lumen Re’s risk-adjusted capitalization, as measured by Best’s
Capital Adequacy Ratio (BCAR), is at the strongest level. Its
liquidity, asset/liability management, quality of assets and use of
internal capital models provide ample support of its balance sheet
assessment. Partially offsetting these rating factors is Lumen Re’s
high dependence on third-party retrocession. However, all
retrocession will be written on a fully collateralized basis, thus
minimizing its exposure to losses and third-party credit risk. The
company’s leverage, as measured by the ratio of retained limits to
equity, is low. Exceeding USD 50 million of net written premium in
2022, Lumen Re’s insurance license had to be upgraded to Class 3B
in 2023. In addition, as of January 2024, Lumen Re is recognized as
a Reciprocal Jurisdiction Reinsurer in 37 U.S. states, which will
reduce operational burden and costs.
AM Best assesses Lumen Re’s overall operating performance as
adequate. The company’s derisking and reunderwriting process
continues to be having the intended effect as the loss ratio has
come down significantly in 2022 and again in 2023. Lumen Re’s
operating performance is expected to remain favorable given current
market conditions.
AM Best assesses Lumen Re’s business profile as limited, as the
company predominantly writes catastrophe excess of loss contracts
and limited reinsurance protection programs with well-established
cedants in highly developed markets. Product concentration is
mitigated somewhat by risk diversification across regions, perils
and the number of cedants. Pricing sophistication, modeling
capabilities including reliance on vendor models and independent
modeling tools, and coverage exclusions for start-up companies
create a strong environment for management to execute its pricing
strategy.
AM Best assesses Lumen Re’s ERM as appropriate, based on the
company’s robust ERM framework and governance that ensures a
systematic and controlled process for the identification,
monitoring and reporting of underwriting and investment risks, as
well as other relevant risks that affect its reinsurance
operations.
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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David Mautone Senior Quantitative Specialist +1
908 882 2098 david.mautone@ambest.com Wai Tang Senior
Director +1 908 882 2388 wai.tang@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