flow deals

Created: May 02, 2023 07:07 AM

AM Best reports that Aspida Life Re, at Victoria Place in Hamilton, has a very strong balance sheet.

AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent) of Bermudian-based Aspida Life Re Ltd and Aspida Life Insurance Company of North Carolina.

The outlook of these credit ratings is stable.

The ratings reflect Aspida Re’s and Aspida Life’s balance sheet strength, which AM Best assesses as very strong, as well as their adequate operating performance, neutral business profile and appropriate enterprise risk management.

The ratings of Aspida Re and Aspida Life consider the strength of their balance sheets and overall liquidity sources, which have been bolstered by significant capital contributions from Ares Management Corporation, a publicly traded, leading global alternative investment management firm with over $350 billion of assets under management as of December. 31, 2022.

AM Best expects additional capital contributions from Ares and other third-party investors to fund the current growth strategy of continued writing of retail annuity business at Aspida Life and acquiring new blocks of business and entering new reinsurance flow deals through Aspida Re.

Aspida Re currently maintains the strongest level of risk-adjusted capitalisation, as measured by Best’s capital adequacy model, while Aspida Life’s BCAR scores are above the level required for an assessment of very strong.

Aspida Re has expanded its business profile over the past year with several new block acquisitions and reinsurance flow deals, including one with a prominent Japanese life insurance company.

While GAAP accounting rules have resulted in significant volatility in reported earnings, the underlying profitability of Aspida Re’s blocks of business have generally been favourable and interest rate spreads have improved with the rise in investment yields and the repositioning of investments