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AM Best Withdraws Credit Ratings of The Hollard Insurance Company Pty Ltd

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of The Hollard Insurance Company Pty Ltd (HIC) (Australia). The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn these ratings as the company has requested to no longer participate in AM Best’s interactive rating process.

The ratings reflect 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 (ERM). 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 (BCAR), which was at the adequate level at fiscal year-end (30 June) 2023. Risk-adjusted capitalisation is subsequently expected to improve to the very strong level in the medium term, driven by improved earnings retention. AM Best views HIC 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. Additionally, HIC has a moderate dependence on third-party reinsurance to support catastrophe and large loss exposure management, albeit reinsurance usage has been declining in recent years.

AM Best views HIC’s operating performance as adequate, with an average return-on-equity ratio of 4.5% over fiscal-years 2019-2023 on an unconsolidated basis. 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. Prospectively, AM Best expects HIC’s underwriting profits to exhibit an upward trend over the medium term, primarily driven by a lower expense ratio, as HHA is in the process of implementing number of cost-saving initiatives and making significant investment in new systems and technology following its acquisition of Commonwealth Insurance Limited in September 2022.

AM Best 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 c.4% in 2023. The company has recorded robust premium growth over the last 10 years, supported by a diversified network of distribution partners and affiliated underwriting agencies in Australia and New Zealand. However, prospective premium growth is expected to be modest, given the company’s strategic focus on operational efficiency and technology development. HIC remains strategically important to HHA as it contributes the bulk of the group’s revenues.

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 Performance Assessments, 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

Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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