A.M. Best Downgrades and Places Rating of Sage Life Under Review.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--April 9, 2003 A.M. Best Co. has downgraded the financial strength rating to B++ (Very Good) from A- (Excellent) of Sage Life Assurance of America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. Inc (Wilmington, DE) and placed the rating under review with negative implications. This rating action follows Sage Life's reported sharp decline in its statutory capital and surplus position as of December 31, 2002, along with its lack of financial flexibility. Sage Life reported a net loss of $22.3 million for 2002, which was driven primarily by operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. , provisions for severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs of $4.8 million and the establishment of non-recurring reserves of $7.7 million earmarked to cover run-off expenses for the next -two decades. Although the capital position is still strong from a regulatory perspective, A.M. Best has placed the rating under review due to Sage Life's reduced financial cushion Cushion In the context of project financing, the extra amount of net cash flow remaining after expected debt service. cushion See call protection. to cover any unforeseen adverse developments and lack of financial flexibility. Future costs have been provided for, and future operating results are expected to be at or near a break-even level. However, the rating will remain under review over the next several quarters while A.M. Best monitors Sage Life's run-off results against expectations. A.M. Best will re-evaluate the rating should any material change occur in Sage Life's business profile or financial condition. The current rating continues to recognize Sage Life's limited operating profile--whereby no new business is accepted--and A.M. Best's expectation that risk-adjusted capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. will remain at current levels as its block of separate account annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. business runs-off. The rating also considers Swiss Re Swiss Re is the world’s largest reinsurer, now that it has acquired GE Insurance Solutions (Ligi 2006). Founded in 1863, Swiss Re now operates in more than 30 countries. General Electric owns 8.9% of the firm. Life & Health's role as a minority shareholder and strategic partner. Additionally, Sage Life reinsures mortality risks and other contract guarantees with highly rated reinsurers. In conclusion, Sage Life's management maintains its belief that Sage Life has adequate capital resources to meet its contract benefit and servicing obligations to existing contract holders. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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