AM Best Affirms Credit Ratings of Guild Insurance Limited

SINGAPORE--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Guild Insurance Limited (GIL) (Australia). The outlook of these Credit Ratings (ratings) is stable.

These ratings reflect GIL’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

GIL’s balance sheet strength is underpinned by its risk-adjusted capitalization, which AM Best expects to remain at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best also views GIL as having a prudent approach to reserving, maintaining a buffer in its reserves notably above the regulatory imposed minimums. Other balance sheet considerations include the company’s strong regulatory solvency position, conservative investment strategy and limited financial flexibility given its ultimate ownership by a not-for-profit organization.

AM Best views GIL’s operating performance as adequate, as evidenced by a five-year average return-on-equity ratio of 6% (fiscal-years 2015-2019). Overall earnings over the past five years remain supported by robust and generally stable investment returns. GIL’s combined ratio has been maintained historically at approximately 100%, reflecting a favorable loss ratio albeit offset by an elevated expense ratio when compared with the industry average. Prospectively, AM Best expects an adequate level of operating performance to be maintained and underpinned by continued good loss experience, supported by expense efficiencies achieved in the coming years.

AM Best views GIL’s business profile as neutral. While the company is considered a small insurer in Australia’s non-life sector with a total gross written premium of AUD 195 million and an overall market share below 1% in fiscal-year 2019, GIL is a leading provider of insurance protection to allied health professional associations. The company’s presence in this segment is supported by its direct access to members of its parent; The Pharmacy Guild of Australia, a national employers’ organization representing community pharmacies across Australia.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.