Ansvar Insurance has demonstrated robust financial performance despite facing challenges from physical and sexual abuse (PSA) claims, according to recent reports. Despite these hurdles, the company managed to achieve positive operating earnings in both 2022 and 2023.
AM Best, a renowned credit rating agency, highlighted Ansvar’s prudent capital management and financial flexibility in navigating these difficulties. A significant factor in mitigating PSA-related risks has been an excess-of-loss cover provided by Ecclesiastical Insurance Office (EIO). EIO has also supported Ansvar with capital injections and reinsurance protection, further bolstering the insurer’s stability.
The insurer maintains a very strong balance sheet, supported by robust risk-adjusted capitalisation as measured by Best’s Capital Adequacy Ratio (BCAR). This strength is anticipated to persist in the medium term, offering a solid foundation amid operational challenges.
Despite facing volatility in operating performance, primarily due to weather-related events and PSA claims, Ansvar has shown resilience. The company’s positive operating earnings in recent years have been underpinned by a stop loss reinsurance program with EIO and strong investment income.
“Operating performance metrics have shown volatility over the past five years, largely driven by weather-related events and PSA claims. Nevertheless, Ansvar recorded positive operating earnings in 2022 and 2023, supported by recoveries from its reinsurance arrangement with EIO. Investment income remains a significant contributor to overall earnings, with a reported net investment yield of 5.1% in 2023,” noted the AM Best report.
Specializing in commercial property and casualty products for sectors such as care, community, faith, education, heritage, and property owners in Australia, Ansvar maintains a niche market presence. However, its distribution is somewhat constrained due to reliance on non-affiliated intermediaries.
Looking ahead, AM Best anticipates continued support from EIO to mitigate ongoing performance volatility at Ansvar. This partnership is expected to provide stability amidst evolving market conditions.
In summary, despite operational challenges stemming from PSA claims, Ansvar Insurance has demonstrated resilience and financial strength, supported by strategic reinsurance arrangements and strong investment performance.
