AM Best has downgraded the long-term issuer credit rating of Lincoln Benefit Life Company to ‘bbb’ (Good) from ‘bbb+’ (Good) and its outlook to ‘negative’ from ‘stable’. The agency affirms the company’s financial strength rating of ‘B+’ (good).
The downgrade reflects the continued capital support required for Lincoln Benefit’s captive reinsurer, Lancaster Re Captive Insurance Company, and the expected impact on its capital flexibility.
The company's capital trends have weakened due to underperformance in its runoff Universal Life with Secondary Guarantees (ULSG) business, though profitability is expected to improve as the ULSG business nears its peak reserve in the coming years.
The ratings of Lincoln Benefit also reflect its balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile, and appropriate enterprise risk management.
