AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of 'a-' of
Concurrently, AM Best has affirmed the Long-Term ICR of 'bbb-' of TIL's ultimate parent,
The ratings reflect TIL's balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
TIL's balance sheet strength assessment is underpinned by its risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), which is expected to remain at least at a very strong level over the medium term. AM Best also views TIL as having robust financial flexibility as a result of its ownership by TL, a listed company with a track record of accessing capital markets. In
TIL reported a return-on-equity ratio of 9.8% for fiscal-year 2019, a notable improvement following operating losses in the prior four consecutive years (fiscal-years 2015 to 2018). The strengthened operating performance in the latest fiscal-year was driven primarily by increased stability in Canterbury Earthquake reserves and a largely benign environment for weather-related losses, supporting a lower loss ratio during the period. The combined ratio improved to 94.3% in fiscal-year 2019, as compared with a five-year average of 102.4% (fiscal-years 2014 to 2018). Prospectively, AM Best expects TIL to continue to report positive underwriting and operating results over the medium term, supported by appropriate risk selection and pricing, as well as through anticipated expense efficiencies achieved by core system upgrades in recent years.
AM Best views TIL's business profile as neutral. The company is a medium-sized non-life insurer that operates predominantly in
TL is a non-operating holding company, and the level and the Long-Term ICR outlook reflect standard notching from the ratings of TIL, which is its lead insurance subsidiary.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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