LONDON--(BUSINESS WIRE)--A.M. Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICR of “a” of LocalTapiola General Mutual Insurance Company (LocalTapiola) (Finland).The outlook of the FSR remains stable.
The ratings reflect LocalTapiola’s strategic importance to and integration within LocalTapiola Group (the group), which includes LocalTapiola, 20 regional non-life insurance companies in Finland, LocalTapiola Life, and other service and investment-related companies.
The ratings are underpinned by the group’s consolidated balance sheet strength, which A.M. Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The revised Long-Term ICR outlook reflects the robust performance and profile that has been established over recent years, as the group has been restructured. Since the creation of the LocalTapiola group in 2012, there have been a series of internal mergers and business transfers, which concluded in 2017. Over the next few years, A.M. Best expects the group to consolidate its strong domestic competitive position while maintaining robust performance. LocalTapiola plays a vital role within the wider group, writing certain non-life insurance lines of business, as well as providing centralised group-steering operations.
A.M. Best expects the group’s risk-adjusted capitalisation to remain at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by substantial claims equalisation reserves. LocalTapiola, and each of the 20 regional mutual companies, are owned by their policyholders. However, they benefit from joint liability contracts and significant cooperation with each other, as well as being consolidated into the group’s accounts, which includes the life company. In 2017, the group is expected to have written EUR 1.6 billion of gross written premiums against capital of EUR 3.1 billion, which A.M. Best considers to be relatively moderate underwriting leverage. LocalTapiola holds more than half of the group’s capital but writes less than half of its total gross written premiums. The group’s earnings have improved in recent years, and it has reported an underwriting surplus in four out of the past five years. LocalTapiola is a leading Finnish insurance group and manages an established and far-reaching distribution network that services its mutual members, involving collaboration with a number of high-profile domestic organisations.
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