Ansvar Insurance has demonstrated strong capital management and financial resilience despite facing challenges from physical and sexual abuse (PSA) claims, according to a recent assessment by AM Best. These challenges have been largely mitigated by an excess-of-loss cover provided by Ecclesiastical Insurance Office (EIO), which also extends support through capital injections and reinsurance protection.
AM Best notes that Ansvar maintains a very strong balance sheet strength, bolstered by robust risk-adjusted capitalisation measured by Best’s Capital Adequacy Ratio (BCAR), which is expected to remain robust over the medium term.
The insurer’s operating performance is described as marginal, influenced by volatility stemming from weather-related events and PSA claims. Despite this, Ansvar has achieved positive operating earnings in recent years, supported by a stop loss reinsurance program with EIO and strong investment income, contributing to overall stability.
“Operating performance metrics have shown variability over the past five years, largely due to weather-related events and PSA claims. However, the company recorded positive operating earnings in both 2022 and 2023, benefiting from recoveries under the stop loss reinsurance program with EIO. Investment income continues to be a significant driver of earnings, with a reported net investment yield of 5.1% in 2023,” the AM Best report stated.
As a specialized insurer, Ansvar focuses on providing commercial property and casualty products tailored to specific sectors in Australia, including care, community, faith, education, heritage, and property owners. Despite its strong expertise and brand recognition in these sectors, Ansvar faces distribution challenges due to its reliance on non-affiliated intermediaries.
Looking ahead, AM Best anticipates ongoing support from EIO to mitigate potential volatility in Ansvar’s performance moving forward.
In summary, Ansvar Insurance has navigated challenges effectively, leveraging strategic partnerships and robust financial measures to uphold stability amidst industry pressures.
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