LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Motors Insurance Company Limited (MICL) (United Kingdom). The outlook of these Credit Ratings (ratings) is stable. MICL is a wholly owned subsidiary of AmTrust International Insurance, Ltd., which is a member of the AmTrust Group.
The ratings reflect MICL’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.
MICL’s balance sheet is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), which is supported by prudent reserving practices and a low-risk, liquid investment portfolio. Prospectively, AM Best expects MICL’s risk-adjusted capitalisation to remain at the strongest level, benefiting from stable operating performance and a prudent capital management policy. The company’s moderate dependence on reinsurance and concentration with one reinsurance counterparty is partially mitigated by the excellent credit quality of the reinsurer.
MICL has a track record of strong overall performance, generating a five-year (2017-2021) weighted average return-on-equity ratio of 10.1%. Earnings are underpinned by robust and stable underwriting results, demonstrated by a combined ratio that has fluctuated between 89% and 94% over the past five years.
MICL provides auto warranty and auto add-on policies, primarily distributed by retail intermediaries. The company has a well-established competitive position in the auto warranty market in the United Kingdom, which generates the majority of its revenue, supported by business from other European countries, as well as globally. AM Best expects the company’s book of business to remain stable.
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