Oldwick, New Jersey (BUSINESS WIRE) - A.M. Best Co. has assigned a financial strength rating of A-(Excellent) and an issuer credit rating of "a-" to Ansvar Insurance Limited (Ansvar) (Australia). The outlook assigned to both ratings is stable.
The ratings reflect Ansvar's adequate stand-alone risk-adjusted capitalization and conservative investment philosophy. The ratings also recognize the company's niche focus in the faith, education, care and charity sectors, as well as its unique distribution strategy.
Ansvar's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), is commensurate with its assigned rating, although the BCAR has weakened over the past financial year. The company's net premium leverage strengthened slightly due to profitable operating earnings contributing to net surplus and to the decline in net premiums written in 2007.
The company's conservative investment portfolio of predominantly cash and bonds has contributed to a stronger BCAR. New investments in equities (3.1 per cent of invested assets) and the increase in reserves caused the moderate deterioration of Ansvar's BCAR; however, A.M. Best anticipates strengthening in the company's risk-adjusted capitalization.
Good business persistency, especially in the commercial property line, can be attributed to Ansvar's close relationship with clients, whereby Ansvar maintains a direct relationship, but clients continue to place their insurance through brokers.
Offsetting rating factors include the impact of softening premium rates in Ansvar's major business lines, its moderate market position and uncertain liability exposure.
Although Ansvar has remained profitable throughout the five years under review, the trend of operating profits has exhibited negative growth.
Market competition has seen continued softening of premium rates, especially in commercial lines, which could challenge the company's ongoing underwriting profitability. A.M. Best expects that Ansvar's underwriting performance will remain profitable in the near term, albeit at a more modest level.
Ansvar's overall reserving policy is considered prudent. Nonetheless, higher than normal uncertainty exists on the ultimate exposure from special issues risk.
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.
A.M. Best Co. 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 Ansvar's adequate stand-alone risk-adjusted capitalization and conservative investment philosophy. The ratings also recognize the company's niche focus in the faith, education, care and charity sectors, as well as its unique distribution strategy.
Ansvar's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), is commensurate with its assigned rating, although the BCAR has weakened over the past financial year. The company's net premium leverage strengthened slightly due to profitable operating earnings contributing to net surplus and to the decline in net premiums written in 2007.
The company's conservative investment portfolio of predominantly cash and bonds has contributed to a stronger BCAR. New investments in equities (3.1 per cent of invested assets) and the increase in reserves caused the moderate deterioration of Ansvar's BCAR; however, A.M. Best anticipates strengthening in the company's risk-adjusted capitalization.
Good business persistency, especially in the commercial property line, can be attributed to Ansvar's close relationship with clients, whereby Ansvar maintains a direct relationship, but clients continue to place their insurance through brokers.
Offsetting rating factors include the impact of softening premium rates in Ansvar's major business lines, its moderate market position and uncertain liability exposure.
Although Ansvar has remained profitable throughout the five years under review, the trend of operating profits has exhibited negative growth.
Market competition has seen continued softening of premium rates, especially in commercial lines, which could challenge the company's ongoing underwriting profitability. A.M. Best expects that Ansvar's underwriting performance will remain profitable in the near term, albeit at a more modest level.
Ansvar's overall reserving policy is considered prudent. Nonetheless, higher than normal uncertainty exists on the ultimate exposure from special issues risk.
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.
A.M. Best Co. 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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