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FOR IMMEDIATE RELEASE
LONDON - JULY 15, 2016 09:07 AM (EDT)
A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of London General Insurance Company Limited (LGI) and London General Life Company Limited (LGL) (both domiciled in the United Kingdom). The outlook for each rating remains stable.
The ratings of LGI reflect its track record of strong underwriting performance, solid risk-adjusted capitalisation and established business profile within its core markets. LGL’s ratings reflect its strong risk-adjusted capitalisation and strategic importance to LGI.
LGI’s track record of strong performance is evidenced by the pre-tax profits reported in each of the past five years. Technical profits have been achieved despite the challenging economic conditions in Europe that have driven down consumer spending and demand for warranty and creditor products.
LGI’s risk-adjusted capitalisation remains at a strong level, and A.M. Best expects it to remain supportive of the ratings, with higher retained earnings offsetting an anticipated increase in underwriting risk. Premium income is expected to grow as economic conditions improve across the company’s core markets.
Together, LGI and LGL have an established specialist profile across Europe. The companies share a client base, and their combined underwriting portfolio includes extended warranty, accidental damage and creditor insurance. LGL is strategically important to LGI, as it enables long-term creditor life and permanent health insurance to be underwritten. A partially offsetting rating factor is LGI’s highly concentrated customer base, with its five largest clients accounting for approximately 48% of net written premiums. However, this concentration risk is partly mitigated by the company’s long-standing client relationships and its comprehensive service and claims handling expertise, which cannot be easily substituted.
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.