LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Ecclesiastical Insurance Office plc (EIO) (United Kingdom). At the same time, AM Best has affirmed the Long-Term Issue Credit Rating of “bbb” (Good) on GBP 106,450,000, 8.625%, non-cumulative irredeemable preference shares issued by EIO. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect EIO’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
EIO’s balance sheet strength assessment is underpinned by risk-adjusted capitalisation that AM Best expects to remain comfortably at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Although EIO’s conservative reserving practices support its balance sheet strength assessment, the company has exposure to certain classes that have exhibited volatility in recent years. Moreover, EIO’s investment portfolio has a relatively high allocation to equity investments, which heightens the sensitivity of the company’s risk-adjusted capitalisation to financial market volatility.
Although EIO’s operating performance is subject to volatility, primarily stemming from its investment portfolio, the company has reported profits in four of the last five years (2019-2023). In 2023, the company generated a post-tax profit of GBP 37.5 million (2022: GBP 2.8 million), driven by positive underwriting and investment results. EIO reported an insurance service result of GBP 70.7 million in 2023 (2022: 65.6 million), despite recording its single largest underwriting loss to-date.
The company has a well-established and unique position in the United Kingdom, offering insurance products and risk management services in the faith, heritage, charity and education sectors. EIO reported insurance revenue of GBP 586.5 million in 2023 (2022: GBP 534.9 million), largely sourced from the United Kingdom. EIO has diversified operations through subsidiaries in Australia, Ireland and Canada. EIO is a member of the specialty insurance, investment, broker and advisory group, Benefact Group plc.
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