SINGAPORE--(BUSINESS WIRE)--#insurance--AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of �a-� (Excellent) of Ansvar Insurance Limited (Ansvar) (Australia).

These Credit Ratings (ratings) reflect Ansvar�s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management. In addition, Ansvar�s ratings factor in rating enhancement to reflect its ownership, integration and support from Ecclesiastical Insurance Office plc (EIO).

The revision of the outlooks to stable follows increased financial and reinsurance support provided to Ansvar by EIO, which AM Best views as an effective response to counteract recent pressure on Ansvar�s operating performance and balance sheet strength fundamentals.

Over the past three years (2019-2021), Ansvar has exhibited heightened volatility and a deteriorating trend in operating performance, with its underwriting results having been hampered by weather-related events, COVID-19 provisioning and material reserve increases emanating from physical and sexual abuse (PSA) claims. In 2021, the company recorded a sizable operating loss and a net combined ratio in excess of 130% driven by a higher-than-expected volume of new PSA claims arising predominantly from legacy exposures.

EIO has taken a series of actions in support of Ansvar�s response to these performance pressures and to mitigate the impact on the company�s balance sheet strength position. Recent and planned capital injections from the parent have helped to bolster Ansvar�s capital adequacy and offset the adverse impact of COVID-19 provisions and material increases in PSA reserves. The company�s risk-adjusted capitalisation, as measured by Best�s Capital Adequacy Ratio (BCAR), was at the very strong level in 2021.

EIO is also providing significant intra-group reinsurance protection to Ansvar in 2022. This includes the renewal of a PSA excess-of-loss cover and the placement of a new stop loss programme, both of which are expected to substantially limit downside risk to operating performance and balance sheet strength fundamentals over the near term. Beyond this, AM Best expects Ansvar and EIO to continue to review and consider the requirement for these intra-group reinsurance arrangements, with group support expected to remain available if Ansvar�s performance volatility persists.

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 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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