Lincoln Benefit Life Off CreditWatch On Deal Termination With Global Bankers Insurance Group, Downgraded; Outlook Stable

  • Lincoln Benefit Life Co. (LBL) is no longer being acquired by Global Bankers Insurance Group (GBIG).
  • We are lowering our long-term issuer credit rating on LBL to 'BBB' from 'BBB+'.
  • The stable outlook reflects our expectation that LBL will generate operating performance commensurate with our fair business risk profile assessment and capital adequacy at least at the 'BBB' confidence level.
NEW YORK (S&P Global Ratings) Nov. 28, 2018-- S&P Global Ratings said today it 
lowered its long-term issuer credit rating on LBL to 'BBB' from 'BBB+'. We 
have removed the ratings from CreditWatch Developing where we initially placed 
them on Oct. 2, 2017. The outlook is stable.

We have removed our ratings on LBL from CreditWatch Developing due to 
termination of LBL's acquisition by GBIG. The transaction was announced in 
October 2017 and was pending regulatory approval.

LBL was acquired by Resolution Life Inc. in 2014. Since then, LBL HoldCo Inc. 
(formerly known as Resolution Life Inc.) has not acquired any other blocks of 
business. It is unlikely that LBL HoldCo will acquire any additional blocks, 
but may consider other strategic options, including seeking potential buyers 
for LBL.

We now view LBL's business risk profile as fair. Although, historically LBL 
has performed in line with our expectation, the company had volatile mortality 
experience in 2017 and through September 2018. We believe as a single block, 
LBL's operating performance is more susceptible to adverse experience than 
similarly rated peers'. We continue to assess LBL's capital and earnings as 
moderately strong with total adjusted capital of about $647 million as of 
year-end 2017, demonstrating solid redundancy at the 'BBB' level based on our 
capital model. We expect the company to manage to at least a 350% risk-based 
capital ratio.

The stable outlook reflects our expectation that, barring any acquisitions, 
LBL will generate operating performance commensurate with our fair business 
risk profile assessment and capital adequacy at least at the 'BBB' confidence 
level.

We could lower the rating over the next 12-24 months if there is a change in 
the company's financial risk strategy, increased earnings volatility, or if 
capital adequacy drops significantly below the 'BBB' confidence level.

We believe, on a stand-alone basis, there is no upside to the rating over the 
next 24 months given LBL's run-off status.

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