AM Best has revised the under review status to developing implications from negative implications and affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit ratings of “a-” (Excellent) of several Bermudian and US domestic operating entities of Lia Holdings Ltd of the United Kingdom.

The revision and ratings apply to the Bermudian-based companies, Lombard International Life Assurance Company Ltd and Lombard International Life Ltd, as well as units in Philadelphia and New York.

The review first came when the group entered into a definitive agreement to sell its US- and Bermudian-based businesses to New York-headquartered BroadRiver Asset Management and affiliated entities.

The developing implications are because of AM Best’s recent communications with BroadRiver Asset Management regarding its intentions and capitalisation plans for the entities being acquired, the organisation said.

The agency said these ratings will remain under review until the transaction closes, all customary regulatory approvals are received and AM Best evaluates BroadRiver Asset Management’s role in these entities.

Lombard International has a very strong balance sheet, adequate operating performance, neutral business profile and appropriate enterprise risk management.

AM Best said Lombard International Group maintains a solid position in the private placement European and US life and annuity markets.

Lombard International’s risk-adjusted capitalisation, as measured by Best’s capital adequacy ratio, is at the strongest level and benefits from the group’s lower risk liability structure.

Partially offsetting these positive rating factors, AM Best said, are the challenges related to operating in the specialised ultra-high net worth business, including the complexity of the customised products and services offered.

AM Best also notes that the low-volume, high-premium nature of the private placement market and the volatility of capital markets also can impact the company’s overall financial performance.