Bermuda reinsurer L&G Re gets excellent credit ratings
AM Best has assigned the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” (Excellent) to Bermudian-based Legal & General Reinsurance Company No. 2 Limited.
The outlook assigned to these credit ratings is stable.
L&G Re 2 was established in 2021 and is ultimately owned by Legal & General Group Plc.
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 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 risk-adjusted capitalisation, as measured by Best’s capital adequacy ratio, that AM Best expects to be maintained at the strongest level through a forecast period of five years. L&G has provided the initial capital and is expected to support the company’s business growth.
The adequate operating performance assessment considers the company’s five-year business plan. AM Best expects L&G Re 2 to grow its portfolio of Canadian PRT business gradually.
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.