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.
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