A.M. Best Assigns Credit Ratings to Irwell Insurance Company Limited
October 11 2018 - 9:48AM
Business Wire
A.M. Best has assigned a Financial Strength Rating of B++
(Good) and a Long-Term Issuer Credit Rating of “bbb” to Irwell
Insurance Company Limited (Irwell) (United Kingdom). The outlook
assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Irwell’s balance sheet strength, which A.M.
Best categorises as strong, as well as its adequate operating
performance, limited business profile and appropriate enterprise
risk management (ERM).
The company’s risk-adjusted capitalisation, as measured by
Best’s Capital Adequacy Ratio (BCAR), was assessed at the strongest
level at 31 March 2018. Irwell has a high quality asset base and
excellent liquidity position, highlighted by a current liquidity
ratio of 120%. A.M. Best considers Irwell’s investment portfolio to
be conservative and is focused toward fixed income instruments. The
company has a small capital base, with capital and surplus of GBP
21.5 million at financial year-end 31 March 2018, which can give
rise to fluctuations in its solvency position and is considered an
offsetting factor to A.M. Best’s balance sheet strength
assessment.
Irwell has generated a five-year average return on equity of
11.9%, and whilst the company has generated an operating profit
since 2010, results have been relatively volatile. Irwell has a
track record of solid technical performance, and the company’s
strong relationship with the Peninsula Business Services Group Ltd
(PBSG), partially as a result of common shareholders, gives rise to
the excellent flexibility Irwell has in its pricing and commission
arrangements, which helps to control profitability. Investment
results are modest due to the company’s conservative investment
allocation, and during the financial year ending 31 March 2018,
Irwell reported an investment yield of 1.7%.
Whilst A.M. Best considers Irwell’s business profile to be
limited, the company has a niche position as a provider of
insurance products for agents operating within PBSG. Irwell is
considered a specialist in providing legal expenses cover, and
given the company’s focus toward this line of business, it is
materially exposed to legislative changes relating to employment
law. Net written premiums increased by 19% to GBP 27 million for
financial year-end 31 March 2018, driven by the expansion of
PBSG.
A.M. Best considers the company’s ERM capability to be in line
with its risk profile. Irwell operates using an outsourcing model
with a significant amount of authority delegated to its
distribution partners. Ensuring sufficient oversight of its
partners and consultants is one of Irwell’s principal risks;
however, this is mitigated by regular monitoring and an experienced
management team.
This press release relates to Credit Ratings that have been
published on A.M. 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 A.M.
Best’s Recent Rating Activity web page. For
additional information regarding the use and limitations of Credit
Rating opinions, please view Understanding Best’s Credit
Ratings. For information on the proper media use of Best’s
Credit Ratings and A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
A.M. Best is a global rating agency and information provider
with a unique focus on the insurance industry. Visit
www.a.m.best.com for more information.
Copyright © 2018 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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A.M. BestThomas Bateman, CFAFinancial
Analyst+44 20 7397
0329thomas.bateman@ambest.comorMahesh
MistrySenior Director, Analytics+44 20 7397
0325mahesh.mistry@ambest.comorChristopher
SharkeyManager, Public Relations+1 908 439 2200, ext.
5159christopher.sharkey@ambest.comorJim
PeavyDirector, Public Relations+1 908 439 2200, ext.
5644james.peavy@ambest.com