OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best revised the outlook from stable to positive and confirmed the financial strength rating (FSR) of B + (good) and the issuer’s long-term credit rating of “bbb-” (good) of Lewer Life Insurance Company ( Lewer Life) (Kansas City, MO).
These credit ratings (ratings) reflect the strength of the balance sheet, which AM Best considers to be very strong, as well as its adequate operational performance, very limited business profile and management of marginal enterprise risk (ERM).
The revised outlook reflects Lewer Life’s recently strengthened ERM program, as evidenced by its implemented ERM initiatives and ERM’s growing role in business strategy and decisions. In 2021, the company transferred investment management to a firm specializing in the insurance sector in order to improve performance and control costs. In addition, the organization has updated its investment guidelines to include environmental, social and governance (ESG) considerations and allow for private placement investment opportunities. Formal ESG elements strengthen Lewer Life’s competitive position with its college and university clients.
From a strategic business development perspective, Lewer Life has improved its position for future growth through the participation of its parent company in the Study Abroad Association, LLC (SAA), which provides the opportunity for premium growth and development. ” invest in new educational technologies. In addition, the company strengthened its board of directors by adding independent directors with experience in health, finance and actuarial practices. The board has increased its attention and oversight of the company’s ERM activities, including formal reporting and discussions of any changes in risk levels. AM Best will continue to monitor improvements to Lewer Life’s ERM program and its role in business decisions.
Lewer Life’s assessment of the strength of Lewer Life’s balance sheet as very strong is based on its highest level of risk-adjusted capitalization, as measured by Best’s capital adequacy ratio (BCAR), partially offset by a level relatively low in absolute capital and surplus. The favorable operating performance was driven by net operating gains before tax, due to a generally favorable underwriting experience and complemented by stable investment income. The premium contracted in 2020 due to a sharp drop in the international student body studying in the United States due to the pandemic. However, the company expects bonuses to increase at the end of 2021 due to enrollment growth at its successful colleges and universities, and enrollments from several new schools added for the 2021 political school year. -2022. The very limited business profile reflects Lewer Life’s low market share and premium concentration in the highly competitive international student health insurance market, which is highly exposed to regulatory, event and market risks.
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