OLDWICK, N.J.--(BUSINESS WIRE)--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 account 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.
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