AM Best Affirms, Withdraws The Hollard Insurance Company Credit Ratings

KUALA LUMPUR, March 22 (Bernama) -- Global credit rating agency, AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent) of Australia’s The Hollard Insurance Company Pty Ltd (HIC).

In a statement, AM Best said concurrently, it has withdrawn these ratings as the company has requested to no longer participate in the credit rating agency’s interactive rating process.

The outlook of these credit ratings (ratings) is stable, reflecting HIC’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The ratings also factor in a neutral impact from the company’s ownership by Hollard Holdings Australia Pty Ltd (HHA).

HIC’s balance sheet strength assessment is supported by its unconsolidated risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, which was at the adequate level at fiscal year-end June 30, 2023.

AM Best views the company as having strong financial flexibility, with a track record of shareholder support, including capital injections and hybrid debt issuances. In December 2023, HIC issued AUD$135 million in wholesale subordinated notes, which bolstered its regulatory capital position. (AUD$1=RM3.09)

On an unconsolidated basis, HIC’s operating performance was viewed as adequate, with an average return-on-equity ratio of 4.5 per cent over fiscal-years 2019-2023.

The company recorded limited underwriting profits over this period due to the adverse impact of several weather events, COVID-19-related provisions and elevated claims inflation.

The rating agency assesses HIC’s business profile as neutral. The company is one of the top 10 non-life insurers in Australia based on gross written premiums, occupying a modest market share of approximately four per cent in 2023.

-- BERNAMA