A.M. Best Affirms Credit Ratings of Ansvar Insurance Limited
The ratings reflect Ansvar’s balance sheet strength, which
The balance sheet strength assessment mainly reflects Ansvar’s low business net retention and moderate underwriting leverage. In addition, while the company’s investment portfolio continues to be invested in cash and high-grade fixed-interest securities, the average duration of its bond portfolio and net claims liabilities is very well-matched. Given Ansvar’s modest capital size, its exposure to property/casualty risks that carry relatively high policy limits represents a major risk factor. Nevertheless, this risk is mitigated partially by an appropriate reinsurance program that has very conservative levels of retention limits.
In response to poor underwriting results from 2010 to 2012, Ansvar exited its unprofitable personal lines business and implemented various measures to remediate the performance of its commercial book. Despite a reduced revenue base following these remedial actions, the company has consistently generated operating profits over the past five years, driven mainly by a steady stream of investment income and a stable net claims ratio of approximately 50%. Similar to a number of its peers, the company’s high expense ratio has been the major overhang on operating performance. Nevertheless,
Ansvar is a niche insurer that underwrites general insurance products for its target customer groups in
Given its status as a stable operator within a niche segment, Ansvar’s risk profile shows high business concentration risk. Nevertheless,
The stable outlooks reflect A.M. Best’s expectation that Ansvar will maintain positive operating results, supported by stable revenue growth, steady claims ratios and an expense ratio that is expected to decline gradually over time. 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. For information on the proper media use of Best’s Credit Ratings and
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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