AM Best Affirms Credit Ratings of Guild Insurance Limited
May 09 2024 - 9:30AM
Business Wire
AM Best has affirmed the Financial Strength Rating of A-
(Excellent) and the Long-Term Issuer Credit Rating of “a-”
(Excellent) of Guild Insurance Limited (GIL) (Australia). The
outlook of these Credit Ratings (ratings) is stable.
The ratings reflect GIL’s balance sheet strength, which AM Best
assesses as very strong, as well as its adequate operating
performance, neutral business profile and appropriate enterprise
risk management. In addition, the ratings factor in a neutral
holding company impact from the company’s ultimate ownership by The
Pharmacy Guild of Australia (PGOA).
GIL’s balance sheet strength is underpinned by its risk-adjusted
capitalisation, as measured by Best’s Capital Adequacy Ratio
(BCAR), which was at the strongest level in fiscal year-end 2023
(30 June 2023). Whilst GIL’s financial flexibility is considered
limited given its ultimate ownership by a not-for-profit
organisation, the company has prudent capital management in place
to support its regulatory solvency position, as well as maintain
its risk-adjusted capitalisation at the strongest level over the
medium term. GIL has a sizable exposure to medium-to long-tail
liability business, which could create additional uncertainty in
its insurance liabilities. However, the company adopts a
conservative reserving approach by holding a buffer in held
reserves above the regulatory-imposed minimum.
AM Best views GIL’s operating performance as adequate, with an
average return-on-equity ratio of 4.7% (fiscal-years 2019-2023).
Over this period, the operating performance metrics exhibited
heightened volatility, due to the impact of COVID-19-related
provisions, weather events and volatility in the financial markets.
Despite this, GIL’s expense ratio improved as a result of increased
operational scale and cost management initiatives. Prospectively,
AM Best expects an adequate level of operating performance to be
maintained and underpinned by positive technical profits and
investment income.
AM Best views GIL’s business profile as neutral. The company is
considered a small insurer in Australia’s non-life sector, with
gross premiums of AUD 287 million and an overall market share of
below 1% in 2023. However, GIL is a leading provider of insurance
protection to allied health professional associations, supported by
its direct access to members of its parent, PGOA, which is a
national employers’ organisation 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 use of Best’s Credit
Ratings, Best’s Performance Assessments, Best’s Preliminary Credit
Assessments and AM Best press releases, please view Guide to Proper
Use of Best’s Ratings & Assessments.
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.
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Yi Ding Senior Financial Analyst +65 6305
5021 yi.ding@ambest.com
Michael Dunckley, CFA Associate Director,
Analytics +44 20 7397 0312
michael.dunckley@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com