A.M. Best has removed from under review with negative implications and affirmed the financial strength rating of A- (Excellent) and the long term issuer credit rating of “a-” of Lincoln Benefit Life Company (Lincoln Benefit). The outlook assigned to these credit ratings (ratings) is negative.
According to A.M. Best, Lincoln Benefit’s balance sheet strength has been categorised as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The negative outlooks reflect the continued decline in capital and surplus at Lincoln Benefit, as well as its captive reinsurer, Lancaster Re Captive Insurance Company, coupled with a lower capital and surplus to liability ratio that is below its similarly rated peers.
Due to underperformance in its run-off operations beyond initial projections, the company’s capital deteriorated.
A.M. Best suggested that mitigating factors include a new team with a strategic vision for the company, with a plan that includes supporting the liabilities and a suspension of dividends from the organisation to improve its capital position.
