The world was caught unprepared by the Covid-19 pandemic, however a Bermudian-based reinsurer secured some pandemic coverage protection only weeks before the coronavirus health emergency unfolded.
Legal & General Reinsurance took steps that protected a portfolio of its business against global pandemics. It did so at the end of 2019, not knowing what was just around the corner. The risk management strategy proved to be timely.
It also led to L&G Re, which has its offices in Par-la-Ville Road, being awarded the Life Transaction of the Year award from Trading Life Magazine.
L&G Re had its insurer financial strength upgraded in October from “A+” to “AA-” by Fitch Ratings. And this month rating agency Standard & Poor’s upgraded the reinsurer’s long-term financial strength rating from “A+” to “AA-”.
Thomas Olunloyo, chief executive officer of L&G Re, said: “I am delighted that we have been upgraded by S&P, demonstrating the continued strength of our business. There was no way we could have known that the pandemic would occur when it did, however it was a potential risk we thought deeply about as part of our risk management approach. Our first priority is to our customers therefore anticipating potential threats and taking appropriate action to protect their interests is very important to me; this approach also ensures that our business continues to perform strongly in the long term.”
L&G Re’s adverse mortality stop loss cover, which went into effect in December 2019, protected its US portfolio of mortality business against a global pandemic. The reinsurer worked with Aon Reinsurance Solutions (UK) on the policy, which went into effect in December 2019.
The following month the World Health Organisation declared Covid-19 a public health emergency of international concern, before declaring it a pandemic in March.
Announcing the ratings upgrade this month, S&P also said: “Since L&G Re was formed in 2014, it has become an integral part of the Legal & General group’s reinsurance strategy and S&P now considers L&G Re to be a core component of the group.”
Similarly, in October, Fitch Ratings upgraded L&G Re’s strategic importance [to the group] from “very important” to “core.”