OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of Lumico Life Insurance Company (Lumico Life) (Jefferson City, MO), the ultimate parent of which is Swiss Re Ltd (Swiss Re). The outlook of these Credit Ratings (ratings) is stable.
The ratings primarily reflect A.M. Best’s expectation that the Swiss Re group will provide explicit support to Lumico Life as needed. Lumico Life was acquired through Swiss Re’s new iptiQ Americas unit at the end of 2016, and changed its branding in 2017 to Lumico Life.
The ratings also reflect Lumico Life’s balance sheet strength, which A.M. 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 Ltd. A.M. 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 and health insurance business in the United States.
Lumico Life’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio, is assessed as strongest as of year-end 2016, benefiting from its low net underwriting leverage and relatively conservative short-term investment allocation portfolio. The company’s balance sheet strength also benefits from very strong internal reinsurance support provided by the Swiss Re group, with no additional projected capital injections from Swiss Re Ltd needed in the near term as a result of already improved performance within the company’s operations. Lumico Life primarily underwrites lower reserve biometric products, with a focus on life and health retail policies mainly through distribution partnerships. Being 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.
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