OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” to LIO Insurance Company (LIO) (Aliso Viejo, CA). The outlook assigned to these Credit Ratings (ratings) is stable.
The assigned ratings reflect LIO’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 (ERM).
LIO’s level of risk-adjusted capitalization supports its prospective underwriting, credit and investment risks. The company intends to offer specialized commercial package products and will start in a few key states while expanding its footprint in the near term. Management has established specific underwriting leverage tolerances as the company expands.
LIO is owned by LIO Holdings Company, which contributed cash in exchange for equity ownership. The owners of LIO Holdings Company come with extensive knowledge of the insurance industry, as do senior management, and provide access to strategic distribution channels that LIO intends to leverage. Accordingly, the successful execution of LIO’s business development plans is dependent on its strategic business partners. Management will employ underwriting, ERM and claims tactics, which have proven viable in other insurance operations, as well as utilize advanced technologies to enable straight-through processing at the onset of business.
The current and anticipated reinsurance schemes keep the expected net probable maximum loss to a modest amount of surplus.
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