OLDWICK, N.J. — (BUSINESS WIRE) — AM Best has assigned a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) to LIO Specialty Insurance Company (LSIC). The outlook assigned to these Credit Ratings (ratings) is stable. Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of LIO Insurance Company (LIC). The outlook of these ratings is stable. The companies are domiciled in Phoenix, AZ, and are collectively known as LIO Insurance Group.
The ratings reflect LIO Insurance Group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The stable outlooks reflect AM Best’s expectation that the group will maintain its very strong overall balance sheet strength assessment, supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The group is expected to maintain capital levels that support future growth. LIO Insurance Group’s balance sheet further recognizes its conservative investment risk, modest underwriting leverage and prudent reinsurance protection. LIO Insurance Group’s adequate performance assessment reflects the startup nature of the group as underwriting measures are expected to improve in the near term as the group builds scale. The group remains focused on offering a combination of commercial multiperil property and liability coverage, along with other lines of business such as group accident and health.
LIO Insurance Group is owned by LIO Holdings Company, which contributed cash in 2021 and 2022 to support the group’s growth initiatives. LSIC was formed in July 2022, and recently executed a quota share reinsurance agreement with LIC, the parent. The owners of LIO Holdings Company come with extensive knowledge of the insurance industry, as do senior management, and provide access to strategic distribution channels that LIO intends to leverage. LIO Insurance Group is dependent on leveraging its partnerships to solidify the distribution of its products. Management will employ proven underwriting, ERM and claim actions, as well as utilize advanced technologies to enrich the quoting process. The current and anticipated reinsurance programs keep the expected net probable maximum loss to a modest amount of surplus.
This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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