AM Best Affirms Credit Ratings of LocalTapiola General Mutual Insurance Company

LONDON--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a” of LocalTapiola General Mutual Insurance Company (LocalTapiola) (Finland). The outlook of the Long-Term ICR is positive, while the outlook of the FSR remains stable.

The ratings reflect LocalTapiola’s strategic importance to and integration within LocalTapiola Group (the group), which comprises LocalTapiola, 20 regional non-life insurance companies, LocalTapiola Life, and other service and investment-related companies. LocalTapiola plays a vital role within the wider group, writing certain non-life insurance lines of business and providing centralised group-steering operations.

The ratings are underpinned by the group’s consolidated balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The group’s consolidated balance sheet strength is underpinned by its risk-adjusted capitalisation, which remained at the strongest level as at year-end 2018, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects prospective risk-adjusted capitalisation will remain at the strongest level over the medium term, benefiting from the group’s substantial claims equalisation reserves and low underwriting leverage.

The group’s underwriting results have improved in recent years, supported by good earnings diversification between life and non-life technical profits, and overall operating earnings were supplemented by robust investment returns. The group generated an operating profit of approximately EUR 200 million (as per AM Best calculations) in 2018, underpinned by a technical profit, despite reporting unrealised losses on its equity portfolio. In 2018, given the volatility associated with the equity market, the group carried out a slight rebalancing of its investment portfolio from equities toward private loans and strategic investments. AM Best therefore expects that the group will deliver robust operating profits for year-end 2019, supported by strong investment income, although there remains potential for volatility.

The group maintains a leading position in its domestic insurance market as Finland’s largest motor, and second-largest workers’ compensation insurer. The business profile assessment additionally benefits from LocalTapiola’s established and far-reaching distribution network that services its mutual members, involving collaboration with a number of high-profile domestic organisations. An offsetting factor to the assessment is the group’s limited geographical diversification, with its insurance portfolio concentrated exclusively within Finland.

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 A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Rishwinder Grewal

Senior Financial Analyst

+44 20 7397 0321

[email protected]



Tim Prince

Director, Analytics

+44 20 7397 0320

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Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

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Jim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644

[email protected]

Source: AM Best