A.M. Best Co. announced that it has affirmed the financial strength rating of “B++” (Very Good) of the U.K.’s Ansvar Insurance Company Limited and assigned an issuer credit rating of “bbb+”. The outlook for both ratings is stable.
“The ratings reflect Ansvar’s very good risk-adjusted capitalisation, solid prospective underwriting performance and its strong business position as a niche insurer, as well as the explicit support of its parent company, Ecclesiastical Insurance Office plc (EIO),” said Best.
The rating agency also indicated it “believes Ansvar is likely to maintain its very good risk-adjusted capitalisation in 2005 and 2006. Total shareholders funds are expected to grow through the retention of profits to approximately £12 million ($22 million) by year-end 2006, up from £8.6 million ($15 million) in 2004.”
Best said it “anticipates that this will be sufficient to support anticipated annual premium growth of approximately 8 percent in both 2005 and 2006. Additionally, Ansvar benefits from protection under EIO’s main reinsurance programme. All reinsurance is placed by the parent company, and management of exposure and provisioning for reinsurance bad debt is performed at a group level.”
The rating agency also anticipates that “Ansvar is likely to maintain a combined ratio below 80 percent in 2005, in line with 76 percent achieved in 2004. The company’s exposure to softening market conditions is expected to be largely offset by the specialist nature of Ansvar’s business insuring churches and charities, along with its high rate of business retention.”
The bulletin noted that “Ansvar occupies a strong business position within its niche market, offering it some protection from price driven competition. Ansvar’s use of brokers complements the business profile of EIO, which writes a large amount of business direct.”
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