AM Best upgrades Athora Life Re as parent benefits from VIVAT acquisition

AM Best has upgraded Athora Life Re’s financial strength rating to A- (excellent) from B++ (good), with a stable outlook.

AM Best said the upgrade reflected the improved financial strength of Athora Re’s ultimate parent company, Athora, following its acquisition of VIVAT in April 2020, which was renamed Athora Netherlands. This acquisition has significantly reduced the risk associated with execution of the group’s strategy, AM Best said.

AM Best said Athora Re’s balance sheet is strong, while its operating performance is adequate, its enterprise risk management is appropriate and its business profile is neutral. Athora Re also received a rating enhancement from its parent company, Athora Holding.

However, AM Best warned there is material uncertainty surrounding the scale, timing and commercial terms of future reinsurance transactions. Athora Re’s profitability is not expected to meet the group’s ambitious longer term targets until it builds scale and structures its investment portfolio toward its target asset allocation, it noted.

Athora Life Re’s subsidiary, Athora Ireland, was also awarded the same new rating.

“Athora Re is strategically important to the group as a vehicle for transacting reinsurance business, a significant area of targeted growth for the group, and for centralisation of capital within the group,” AM Best said. “The ratings of Athora Ireland reflect its strategic importance to Athora Re as a vehicle for writing reinsurance business in the European Union.”