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FOR IMMEDIATE RELEASE
LONDON - NOVEMBER 20, 2014 11:40 AM (EST)
A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of "a+" of Elips Life AG (elipsLife) (Liechtenstein). The outlook for both ratings is stable.
The ratings of elipsLife reflect its improving operating performance and adequate though volatile risk-adjusted capitalisation. The ratings also consider the support of its ultimate parent company, Swiss Re Ltd (Swiss Re), and elipsLife's niche business profile.
elipsLife continues to report an improvement in its operating performance as the company becomes more established as a specialised life and health insurer. elipsLife produced pre-tax profits of CHF 7.5 million in 2013 (2012: CHF 4.0 million), benefiting from the increased scale within its operations. The company is anticipated to generate a solid profit in 2014, which will be retained in order to support its growth plans.
Despite regular capital injections from Swiss Re, elipsLife's strong business development has resulted in a weakening in its risk-adjusted capitalisation, due to high growth in premium and reserve risks. Going forward, risk-adjusted capitalisation is expected to be maintained at an adequate level, owing to incremental capital contributions from the parent when required to support elipsLife's expansion plans.
elipsLife has been growing significantly since its creation in 2008, developing a niche market position, with a focus on personal risks for pension funds, corporations and affinity groups. Premium income is expected to continue to grow rapidly in 2014, largely driven by its expanding medical, accident and health business with the backing of Swiss Re. The parent continues to demonstrate explicit support through the introduction of business, capital contributions, reinsurance protection and operational support.
Positive rating actions may occur if elipsLife continues to demonstrate strong technical results whilst implementing its expansion strategy, in addition to maintaining risk-adjusted capitalisation at a supportive level. Additionally, the ability of the company to demonstrate an ongoing integrated relationship with its parent could result in positive rating actions.
An excessive deterioration in the company's risk-adjusted capitalisation as a result of additional growth outside of its current business plan or a decline in technical performance could place negative pressure on its ratings.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
This rating announcement has been issued by A.M. Best Europe – Rating Services Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.