KUALA LUMPUR, June 21 (Bernama) -- Global credit rating agency, AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent) of Australia’s Ansvar Insurance Limited (Ansvar).
AM Best in a statement said these credit ratings (ratings) which have a stable outlook reflected Ansvar’s balance sheet strength, which was assessed 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), a United Kingdom-based insurance group that specialises in providing commercial insurance.
Ansvar’s balance sheet strength is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, which is expected to remain at least at the very strong level over the medium term.
The company has prudent capital management in place, with a track record of financial flexibility to support its regulatory solvency position and risk-adjusted capitalisation.
Its operating performance was assessed as marginal by the credit rating agency, with operating performance metrics exhibited heightened volatility over the past five years, predominantly as a result of weather-related events as well as physical and sexual abuse (PSA) claims.
However, the company recorded positive operating earnings in 2022 and 2023, supported by recoveries arising from a stop loss reinsurance programme with EIO, while investment income continues to be a key contributor to overall earnings, with a net investment yield of 5.1 per cent, last year.
Both the PSA excess-of-loss cover and stop loss programme have been renewed for 2024, with these reinsurance arrangements expected to substantially limit downside risk to Ansvar’s operating performance and balance sheet strength fundamentals over the near term.
Prospectively, AM Best expects group support to remain available if the company’s performance volatility persists.
-- BERNAMA
No comments:
Post a Comment