AM Best Affirms Legal & General Reinsurance
AM Best has affirmed the Financial Strength Rating of A [Excellent] and the Long-Term Issuer Credit Rating of “a” [Excellent] of Legal & General Reinsurance Company No. 2 Limited. [L&G Re 2] [Bermuda]. The outlook of these Credit Ratings is stable.
The ratings agency said, “L&G Re 2 is an indirect subsidiary of Legal & General Group Plc [L&G] and commenced writing business in 2021.
“The ratings reflect L&G Re 2’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. The ratings also factor in lift from L&G due to L&G Re 2’s importance to the group as a vehicle to compete and expand in pension risk transfer [PRT] markets outside the United Kingdom and United States, as well as the financial and operational support it receives from its parent.
“L&G Re 2’s balance sheet strength is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio [BCAR], that AM Best expects to be maintained at the strongest level. L&G has injected CAD 315 million of capital into L&G Re 2; further capital injections are expected over the coming years to support business growth.
“As per AM Best criteria, L&G Re 2 is considered a start-up operation and its adequate operating performance assessment considers the company’s ability to execute its business plan. AM Best expects L&G Re 2 to selectively grow a profitable portfolio of Canadian PRT business over the medium term.
“The company is expected to benefit from L&G’s knowledge and expertise in the PRT business, as well as the group’s investment platforms and risk management oversight.”
