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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

AM Best Affirms Credit Ratings of Lumen Re Ltd.

AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Lumen Re Ltd. (Lumen Re) (Bermuda). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Lumen Re’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

Lumen Re’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is at the strongest level. The company’s liquidity, asset/liability management, quality of assets and use of internal capital models support its balance sheet strength assessment. Lumen Re’ capitalization is complemented with third-party retrocession, which is on a fully collateralized basis, thus minimizing Lumen Re’s exposure to losses and third-party credit risk. The company’s leverage, as measured by the ratio of retained limits to equity, has been increasing but remains low. Lumen Re has renewed its status as a reciprocal jurisdiction reinsurer in 37 U.S. states for 2025, which will reduce operational burden and costs.

AM Best assesses Lumen Re’s overall operating performance as adequate. The company’s de-risking and re-underwriting process continues to have the intended effect as its loss ratio has decreased significantly since 2022. Investment income has been higher since 2023, due to the higher interest rate environment. Lumen Re’s operating performance is expected to remain favorable given current market conditions.

AM Best assesses Lumen Re’s business profile as limited, as the company predominantly writes catastrophe excess of loss contracts and limited reinsurance protection programs with well-established cedants in highly developed markets. Product concentration is mitigated somewhat by the company’s risk diversification across regions, perils and the number of cedants. Pricing sophistication, modeling capabilities including reliance on vendor models and independent modeling tools, and coverage exclusions for start-up companies create a strong environment for management to execute its pricing strategy.

AM Best assesses Lumen Re’s ERM as appropriate. The company’s ERM framework and governance ensures a systematic and controlled process for the identification, monitoring and reporting of underwriting and investment risks, as well as other relevant risks that affect its reinsurance operations.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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