AM Best Affirms Credit Ratings of ERIKA Försäkringsaktiebolag (publ)

AMSTERDAM--()--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of ERIKA Försäkringsaktiebolag (publ) (Erika) (Sweden). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Erika’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).

Erika’s strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), along with its conservative and liquid investment portfolio and prudent reserving collectively contribute to an overall balance sheet assessment of very strong by AM Best.

Additionally, consistently favourable earnings, including small investment gains, lead to an overall operating performance assessment of strong. The company’s strong operating performance track record is demonstrated by a five-year average combined ratio of 89.3% (2016-2020) and a five-year (2016-2020) average return on equity of 7.4%. The company has reported a technical surplus in each of the past 15 years (2006-2020), signifying sound underwriting practices. AM Best expects Erika to remain profitable in 2021 despite the ongoing impact on gross written premium from global travel restrictions due to the COVID-19 pandemic.

Erika is the primary provider of travel insurance to people travelling worldwide on the various international education programmes offered by Education First (EF). All business is sourced solely from EF tour operators, which limits Erika’s control over distribution and growth. Erika’s limited business profile assessment also reflects its relatively small portfolio, concentrated within one line of business. However, the risks associated with this concentration are mitigated partially by its moderate product risk and good geographical diversification.

AM Best considers Erika’s ERM to be developed and appropriate for the company’s risk profile and operational scope.

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 specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

Morgane Hillebrandt
Financial Analyst
+31 20 308 5422
morgane.hillebrandt@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Mathilde Jakobsen
Director, Analytics
+31 20 308 5427
mathilde.jakobsen@ambest.com

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

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Contacts

Morgane Hillebrandt
Financial Analyst
+31 20 308 5422
morgane.hillebrandt@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Mathilde Jakobsen
Director, Analytics
+31 20 308 5427
mathilde.jakobsen@ambest.com

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644
james.peavy@ambest.com