SINGAPORE--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Guild Insurance Limited (GIL) (Australia). The outlook for both ratings is positive.
The rating affirmations reflect GIL’s favorable balance sheet strength, prudent reserving practice and established business profile in providing insurance products to Australia’s allied health sector. In addition, GIL’s strong risk-adjusted capitalization, robust reinsurance program and high quality investment portfolio remain supportive of the current rating level. The positive outlook recognizes the company’s continued initiatives to improve the sustainability of its earnings through remedial underwriting, product rationalization and process improvement.
Offsetting rating factors include the potential challenges and uncertainties in successfully implementing the company’s business expansion strategy, particularly under intensifying competitive pressure within Australia’s non-life insurance market. A.M. Best notes that premium growth in recent years has been constrained under a challenging operating environment, thereby deferring GIL from achieving the anticipated reduction in its expense ratio. Moreover, loss ratio has been higher and more volatile than expected due to multiple weather events in fiscal year 2015.
Positive rating actions may occur if GIL can successfully achieve its business growth and profitability targets, underpinned by a sustained improvement in underwriting profitability, especially for the business underwritten through its new distribution channels. Alternatively, a revision in the outlook to stable from positive may arise should GIL continue to fall short of meeting expectations in improving its underwriting performance.
Negative rating actions could occur if there is a significant deterioration in risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio, accompanied by a downward trend in underwriting results.
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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