SINGAPORE--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Ansvar Insurance Limited (Ansvar) (Australia). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Ansvar’s strong risk-adjusted capitalization and established business profile among Australia’s faith and care organizations. The ratings also acknowledge Ansvar’s low underwriting leverage, comprehensive reinsurance program and high-quality investment portfolio.
Partially offsetting rating factors are the company’s poor underwriting results, particularly the high gross loss ratio experienced in its commercial property business. Ansvar has implemented various measures to remediate the performance of its commercial property portfolio. However, these measures, including planned lapses, were the main drivers of premium revenue declining significantly from 2010 to 2013 and remaining relatively flat from 2014 to 2016. A lack of critical mass, in turn, has led to a high expense ratio relative to its peers.
According to Ansvar’s corporate plan as communicated to A.M. Best, the combined ratio is expected to remain elevated in the short term, as the company’s strategic initiatives and remedial actions will take time to materialize. In the meantime, A.M. Best expects the company’s overall operating results to remain positive, supported by a stable stream of investment income generated from a sizable investment base relative to its net premium earned.
Positive rating actions are unlikely in the short term. Negative rating actions could occur if Ansvar fails to meet its profitability targets due to competitive pressures, or if there are material adverse deviations from the budgeted loss and expense ratios.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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