AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of a+ of Elips Life Insurance Company (elipsLife) (headquartered in Schaumburg, IL, USA). The outlook of these Credit Ratings (ratings) is stable. elipsLife is an indirect subsidiary of Swiss Re Ltd (Swiss Re).
The ratings reflect elipsLifes balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, limited business profile and very strong enterprise risk management. The ratings also receive lift from elipsLifes ultimate parent company, Swiss Re. AM Best expects Swiss Re to continue to provide reinsurance and capital support to elipsLife when necessary, due to its important role in Swiss Res long-term plans to grow its direct group life and health insurance business in the United States.
AM Best expects elipsLife to continue to benefit from quota share reinsurance protection from Swiss Re. In 2019, a one-off reinsurance allowance from Swiss Re was received to assist coverage of upfront investment costs. elipsLife will be Swiss Res primary direct writer of group life and health insurance in the United States, and will follow the already established business model in Europe.
The ratings reflect continued expectations derived from the companys business plans and its experienced management team. Despite the early stages of business development, the company has made significant progress in developing distribution relationships. elipsLife is expected to achieve profitability in the near future.
The companys business profile remains limited due to the early stage of development, the lack of product diversification and execution risk during the companys first few years of operation. AM Best considers the group life and health insurance market segment as very competitive, with many large carriers and strong price competition. The companys ability to execute its business plan will be a key rating factor going forward, as will its continued support from Swiss Re. AM Best is monitoring elipsLifes performance continuously to ensure that targeted results are realized as planned.
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