Oldwick, N.J. (BUSINESS WIRE) - A.M. Best Co. has affirmed the financial strength rating of A-(Excellent) and the issuer credit rating of "a-" of Guild Insurance Limited (GIL) (Australia). The outlook for both ratings is stable.
The ratings reflect GIL's improved risk-adjusted capitalization and consistent operating profitability. The ratings also recognize the company's dominance in the health care and child care sectors.
Despite the continued downward pressure on premium rates, GIL's net income after tax increased to AUD 24 million (USD 20.4 million) in fiscal year 2007 from AUD 22.7 million (USD 17.5 million) in fiscal year 2006, translating to an increase of 6 per cent. Deterioration in the company's loss ratio was offset by improvements in the expense ratio, leaving GIL's combined ratio virtually unchanged over the fiscal year.
GIL's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio, is commensurate with its existing ratings. The company's net premium leverage declined slightly, which can be attributed to profitable operating earnings with organic growth in net premiums written in 2007.
Being a wholly owned subsidiary of the Pharmacy Guild of Australia, GIL has a unique advantage in distributing its services to the pharmacists and generally to the broader health care market. While GIL has sustained its foothold in the pharmacy and child care sectors, the company continues to diversify its underwriting portfolio and expand its product reach geographically.
Partially offsetting these positive rating factors are the threat on GIL's market niche posed by new entrants and tightening profit margins due to continued pressure on premium rates.
Continued market competition has seen continued softening of premium rates in commercial lines, which could challenge GIL's underwriting profitability going forward. A.M. Best expects that GIL's underwriting performance will remain profitable in the near-term, albeit at a more modest level.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.
For more information, visit www.ambest.com.
Analysts
Philip Chung, CFA, +852-2827-3409 philip.chung@ambest.com or Terrence Wong, +852-2827-3403 terrence.wong@ambest.com
or Public Relations
Jim Peavy,+(1) 908-439-2200, ext. 5644 james.peavy@ambest.com
or Rachelle Morrow, +(1) 908-439-2200, ext. 5378 rachelle.morrow@ambest.com
The ratings reflect GIL's improved risk-adjusted capitalization and consistent operating profitability. The ratings also recognize the company's dominance in the health care and child care sectors.
Despite the continued downward pressure on premium rates, GIL's net income after tax increased to AUD 24 million (USD 20.4 million) in fiscal year 2007 from AUD 22.7 million (USD 17.5 million) in fiscal year 2006, translating to an increase of 6 per cent. Deterioration in the company's loss ratio was offset by improvements in the expense ratio, leaving GIL's combined ratio virtually unchanged over the fiscal year.
GIL's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio, is commensurate with its existing ratings. The company's net premium leverage declined slightly, which can be attributed to profitable operating earnings with organic growth in net premiums written in 2007.
Being a wholly owned subsidiary of the Pharmacy Guild of Australia, GIL has a unique advantage in distributing its services to the pharmacists and generally to the broader health care market. While GIL has sustained its foothold in the pharmacy and child care sectors, the company continues to diversify its underwriting portfolio and expand its product reach geographically.
Partially offsetting these positive rating factors are the threat on GIL's market niche posed by new entrants and tightening profit margins due to continued pressure on premium rates.
Continued market competition has seen continued softening of premium rates in commercial lines, which could challenge GIL's underwriting profitability going forward. A.M. Best expects that GIL's underwriting performance will remain profitable in the near-term, albeit at a more modest level.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.
For more information, visit www.ambest.com.
Analysts
Philip Chung, CFA, +852-2827-3409 philip.chung@ambest.com or Terrence Wong, +852-2827-3403 terrence.wong@ambest.com
or Public Relations
Jim Peavy,+(1) 908-439-2200, ext. 5644 james.peavy@ambest.com
or Rachelle Morrow, +(1) 908-439-2200, ext. 5378 rachelle.morrow@ambest.com
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