AM Best Affirms Credit Ratings of Lion Reinsurance Company Limited

MEXICO CITY--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Lion Reinsurance Company Limited (Lion Re) (Bermuda). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Lion Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

Lion Re is a subsidiary of ASSA Compañía Tenedora, S.A. (ASSA Tenedora) and is owned ultimately by Grupo ASSA, S.A. (Grupo ASSA), a financial services holding company publicly traded on the Panama Stock Exchange.

Lion Re is a captive Bermuda-based reinsurer assuming risks from ASSA Tenedora affiliates for property, auto, liability, marine, group life, health and miscellaneous businesses. AM Best recognizes its strategic role in the group’s overall regional strategy; however, as it is a captive, Lion Re’s business profile is considered limited once compared with other commercial reinsurers.

Lion Re’s capital base is supportive of its risk-adjusted capitalization, assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as its balance sheet assessment, which is very strong. Lion Re continues to perform an important role in ASSA Tenedora’s strategy as it consolidates operations in the Central American region by providing reinsurance capacity.

Lion Re’s adequate level of operating performance results from its affiliated insurance companies in the Central American region, as well as its affiliation to Grupo ASSA, which provides synergies, operating efficiencies and financial support. The company reviews its underwriting guidelines constantly to improve the performance of its business segments that are deviating from targets. Investment income, based on a conservative strategy, continues to support Lion Re’s results; however, it is not dependent on this type of revenue to achieve positive bottom-line results. As of December 2023, Lion Re’s consistent profitability was reflected in a 37% return-on-equity ratio. In 2024, the company remained profitable and in line with previous results.

Factors that could lead to positive rating actions include a greater degree of perceived integration of Lion Re’s role within the group, while maintaining the financial support of its parent. Factors that could lead to negative rating actions include a material loss of capital, which reduces the company’s risk-adjusted capitalization to a level that does not support its ratings, or a diminished strategic importance of Lion Re to the group.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

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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