KUALA LUMPUR, March 28 -- Global credit rating agency, AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of ‘a-’ (Excellent) of Ansvar Insurance Limited (Ansvar) Australia.
According to a statement, these Credit Ratings (ratings) reflect Ansvar’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.
In addition, Ansvar’s ratings factor in rating enhancement to reflect its ownership, integration and support from Ecclesiastical Insurance Office plc (EIO).
The revision of the outlooks to stable follows increased financial and reinsurance support provided to Ansvar by EIO, which AM Best views as an effective response to counteract recent pressure on Ansvar’s operating performance and balance sheet strength fundamentals.
Over the past three years (2019-2021), Ansvar has exhibited heightened volatility and a deteriorating trend in operating performance, with its underwriting results having been hampered by weather-related events, COVID-19 provisioning and material reserve increases emanating from physical and sexual abuse (PSA) claims.
Recent and planned capital injections from the parent have helped to bolster Ansvar’s capital adequacy and offset the adverse impact of COVID-19 provisions and material increases in PSA reserves.
EIO is also providing significant intra-group reinsurance protection to Ansvar in 2022. This includes the renewal of a PSA excess-of-loss cover and the placement of a new stop loss programme, both of which are expected to substantially limit downside risk to operating performance and balance sheet strength fundamentals over the near term.
Beyond this, AM Best expects Ansvar and EIO to continue to review and consider the requirement for these intra-group reinsurance arrangements, with group support expected to remain available if Ansvar’s performance volatility persists.
More details at www.ambest.com.
-- BERNAMA
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