OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) of Aspida Life Re Ltd. (Aspida Life Re) (Bermuda). The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has assigned an FSR of A- (Excellent) and a Long-Term ICR of “a-” (Excellent) to Aspida Life Insurance Company (Aspida Life) (Los Angeles, CA). The outlook assigned to these ratings is stable.
The ratings of Aspida Life Re reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The ratings of Aspida Life Insurance Company reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM.
The ratings of Aspida Life and Aspida Life Re consider the strength of their balance sheets and overall liquidity sources, which include capital commitments and the financial resources of their ultimate parent, Ares Management Corporation (Ares) [NYSE: ARES], a publicly traded leading global investment firm with over $300 billion of assets under management. AM Best generally requires a level of conservatism to be built into initial capitalization levels, and Aspida Life and Aspida Life Re’s balance sheet strength reflects solid initial capitalization levels. In addition, AM Best’s final balance sheet assessment is supported further by additional capital and liquidity alternatives available to the companies. Finally, AM Best notes that both companies will be utilizing the investment expertise of Ares to manage a significant portion of their general account investment portfolio. While AM Best acknowledges the favorable track record and extensive investment experience of Ares, exposure to less liquid and somewhat higher risk investments in Aspida Life and Aspida Life Re’s general account are expected to be somewhat elevated compared with industry averages.
Aspida Life is expected to begin marketing multiple annuity products through a diverse distribution platform that includes independent marketing organizations, banks and broker/dealers by the end of second-quarter 2022, while Aspida Life Re will continue to execute on its strategy of acquiring blocks of primarily interest sensitive annuity business and flow reinsurance transactions. Both companies will benefit from the systems, management team, and operational and risk management functions that have already been established within the Aspida organization. As with any new venture, Aspida Life and Aspida Life Re face execution risks, which are magnified by the increasing competitive market environment in which the companies operate. AM Best will continue to monitor the companies’ ability to execute on their current business plans without any material adverse deviation from expected capitalization levels and earnings expectations.
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