AM Best Affirms Credit Ratings of Aspida Group
AM Best Affirms Credit Ratings of Aspida Group
AM Best, a global credit rating agency, has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Aspida Life insurance Company (Aspida Life) and Aspida Life Re Ltd. (Aspida Re), collectively known as Aspida Group. The outlook for these Credit Ratings is stable.
The ratings reflect Aspida Group’s very strong balance sheet strength, adequate operating performance, neutral business profile, and appropriate enterprise risk management. The stable outlooks indicate the expectation that Aspida Group will maintain its balance sheet strength and overall liquidity sources with support from Ares Management Corporation (Ares) and third-party investors as it executes its business strategy.
Aspida Group is focused on reinsurance growth through block acquisitions and flow reinsurance treaties, as well as retail growth through expanding its distribution partners and competitive annuity product suite. The company is expected to maintain positive operating trends in the near to medium term by focusing on interest rate spread management.
AM Best believes that Aspida Group will continue to benefit from significant capital infusions and financial resources from Ares and other investors. The company had profitable adjusted operating income in 2023 and expects to grow steadily in the future. Ares Insurance Solutions (AIS) has repositioned and deployed assets to increase interest rate spread and yield.
While Aspida Group faces execution risks in the competitive annuity market environment, AM Best expects the company to demonstrate increasing returns on capital over the longer term. Aspida Group benefits from a sound enterprise risk management approach with a well-developed framework and controls in place to mitigate risks.
Aspida Group remains concentrated in interest-sensitive Annuities, which account for all of its business. The company conducts extensive stress testing as required by regulators. AM Best will continue to monitor Aspida Group’s ability to execute its business plans without any material adverse deviation from expected levels of capitalization and earnings.
In conclusion, AM Best’s affirmation of Aspida Group’s credit ratings reflects the company’s strong balance sheet, operating performance, and risk management practices. The stable outlook indicates confidence in Aspida Group’s ability to maintain its financial strength and execute its growth strategies in the future.