KBRA Affirms All Ratings and Maintains Negative Outlook on LIA Holdings Maintains Stable Outlook for Lombard International Assurance S.A. and Maintains Watch Developing on Non-European Entities
17 Nov 2023 | New York
KBRA affirms the issuer and debt ratings of LIA Holdings Limited at BBB which remain on Negative Outlook. The insurance financial strength rating (IFSR) of Lombard International Assurance S.A. is affirmed at A and remains on a Stable Outlook. The A IFSRs of Lombard International Life Assurance Company, Lombard International Life Assurance Company of NY, Lombard International Life Assurance Company (Bermuda) Ltd., Lombard International Life Ltd., and Lombard International Global Insurance Ltd. remain on Watch Developing due to the pending sale of these entities to a third party.
The ratings reflect Lombard International’s recurring fee-based business model with modest balance sheet risk, resiliency in results supported by trends in assets under administration, strong market position and deep expertise in the growing global private-placement/unit-linked life and annuity markets, and long-standing distribution relationships. Lombard International’s mortality risk is managed through reinsurance relationships with highly creditworthy counterparties. Lombard International’s European operations generate the bulk of the organization’s results. Balancing these strengths is elevated holding company financial leverage, currently limited sources of liquidity at the holding company, the susceptibility of its business model to regulatory or tax changes in key markets, and uncertainty related to ongoing strategic transactions. Reserve additions and settlements for tax and litigation matters weighed on profits and created volatility in results in certain recent periods.
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