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FOR IMMEDIATE RELEASE
SINGAPORE - MARCH 24, 2016 12:19 PM (EDT)
A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Ansvar Insurance Limited (Ansvar) (Australia). The outlooks for both ratings remain stable.
The rating affirmations reflect Ansvar’s adequate balance sheet strength and improved underwriting results.
Ansvar is currently maintaining a capital adequacy ratio that is significantly above its local regulatory requirement. In addition, the company’s risk-based capitalization, as evaluated by Best’s Capital Adequacy Ratio, is supported by its low underwriting leverage, ceding a significant portion of risk to reinsurers and conservative investments.
In response to the poor underwriting results from 2010 to 2012, Ansvar took the decision to exit its unprofitable personal lines business and implement various measures to remediate the performance of its commercial book, which include enhancing its underwriting control, restructuring its reinsurance program and striving to meet its pricing target by line of business. Mainly reflective of these initiatives, the company has reported a more favorable claims experience and improved underwriting results since fiscal-year 2014.
These positive rating factors are partially offset by Ansvar’s limited business profile, especially following the remediation of its underwriting portfolio, which led to a significantly reduced revenue base.
Positive rating actions are unlikely in the short term. The ratings could be downgraded if Ansvar fails to meet its profitability targets due to competitive pressures or there is a material adverse deviation from the budgeted loss and expense ratios.
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
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 see A.M. Best’s Recent Rating Activity web page.
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