A.M. Best Affirms Ratings of LocalTapiola General Mutual Insurance Company

LONDON--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of LocalTapiola General Mutual Insurance Company (LocalTapiola) (Finland). The outlook for both ratings is stable.

The ratings reflect LocalTapiola’s strong risk-adjusted capitalisation, excellent business profile and improving technical performance.

There has been a considerable re-organisation of the newly formed LocalTapiola group in recent years following the merger of Tapiola General Mutual Insurance Company and Local Insurance Mutual Company in December 2012. In order to better serve policyholders, a significant volume of insurance business, staff and capital has been successfully transferred between group entities. In 2015, the final aspects of the group re-structure were completed with the establishment of a new regional mutual company that serves policyholders in the Helsinki metropolitan area, along with a newly established specialised service company that provides centralised administrative services to all group companies. Writing consolidated gross premiums of approximately EUR 1.1 billion, LocalTapiola is a leading Finnish insurance group.

LocalTapiola transferred its voluntary non-life insurance policies covering retail, farm customers, small and medium size companies to the group’s regional mutual companies (except the policies covering greater Helsinki area customers) at the end of 2013. Despite restructuring costs and a reduction in business volume, the company earned a pre-tax profit of EUR 104.7 million in 2014 (2013: EUR 116.1 million). By the end of 2015, LocalTapiola’s combined ratio and overall results are expected to improve, representing more usual operating conditions. Year end results should also partially benefit from financial cost savings following the formation of the service company. An increased focus on underwriting performance appears to be showing positive results and underwriting profits are expected to gradually improve over the longer term for both LocalTapiola and the wider group.

The risk-adjusted capitalisation of both LocalTapiola and the larger LocalTapiola group is strong and supportive of its business plans. Future growth in gross written premiums is likely to be supported by the retention of earnings. An offsetting factor to LocalTapiola’s rating is its limited financial flexibility as a mutual insurer.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

This press release relates to rating(s) 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 visit A.M. Best’s Ratings & Criteria Center.

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A.M. Best

Fahim Awan, +(44) 20 7397 0315

Financial Analyst

fahim.awan@ambest.com

or

Tim Prince, +(44) 20 7397 0287

Associate Director, Analytics

timothy.pince@ambest.com

or

Christopher Sharkey, +(1) 908 439 2200, ext. 5159

Manager, Public Relations

christopher.sharkey@ambest.com

or

Jim Peavy, +(1) 908 439 2200, ext. 5644

Assistant Vice President, Public Relations

james.peavy@ambest.com

Source: A.M. Best