LGT’s reinsurer Lumen Re has ‘A’ rating affirmed by AM Best

LGT’s reinsurer Lumen Re has ‘A’ rating affirmed by AM Best

LGT ILS Partners, the specialist dedicated insurance-linked securities (ILS) investments unit of the private bank and property supervisor, has had the rating on its Class 3A reinsurance underwriting automobile Lumen Re verified by AM Best.LGT ILS Partners released Lumen Re and received an AM Best rating of A for the vehicle at the end of 2017, with the reinsurer providing the ILS financial investment management group a ranked balance-sheet platform through which most of its reinsurance service is underwritten.
Lumen Re is used by LGT ILS Partners to finance a growing bulk of its reinsurance business, combining the very best of both worlds for the firm, offering a rated reinsurance company to front with the counterparties of the LGT ILS management service will holding onto the fully-collateralized vision of ILS.
The reinsurer provides LGT ILS with versatility in how it transacts, the capability to offer standard reinsurance contract features such as reinstatements and also makes the management of collateral simpler, particularly when it comes to rolling it over and handling the structural problems related to collateral retention by cedents.
A.M. Best said on Friday that it has actually verified Lumen Re Ltds Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Rating of “a”, both ratings having stable outlooks.
AM Best stated that Lumen Res balance-sheet strength is thought about “strongest” while its operating performance is considered “appropriate.”.
A high reliance on third-party retrocession is mentioned, but “all retrocession will be composed on a totally collateralized basis,” AM Best stated, which the ranking firm believes minimizes Lumen Res exposure to losses and third-party credit risk.
AM Best likewise pointed out “positive historical operating outcomes and predicted outcomes” in Lumen Res service plan, highlighting the crucial point that the reinsurers prices technique is focused on “underwriting earnings and not on property returns.”.
While Lumen Re has a reasonably limited organization plan, due to the focus on financing and coming from company for ILS funds under the management of LGT ILS Partners, which indicates writing “catastrophe excess of loss agreements and restricted reinsurance security programs with reputable cedants in extremely established markets,” AM Best likewise noted the diversity “across regions, dangers and the variety of cedants” that Lumen Re has accomplished in its portfolio.
In addition, AM Best said Lumen Re has produced a “strong environment for management to execute its pricing strategy,” and has a “robust ERM structure and governance” that helps in determining and managing any other threats that may develop in doing its business.

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