AM Best has affirmed its A- (Excellent) financial strength rating for Ansvar Insurance Limited, the Australian subsidiary of UK-based Ecclesiastical Insurance Office, with a stable outlook.

The ratings agency said the affirmation reflected Ansvar’s “very strong” balance sheet strength, supported by risk-adjusted capitalisation at the strongest level as measured by Best’s Capital Adequacy Ratio at fiscal year-end 2025.

However, AM Best assessed the insurer’s operating performance as “marginal” and its business profile as “limited”. While Ansvar reported positive earnings in most of the past five years, profits were largely supported by recoveries from a stop-loss reinsurance programme with its parent company.

In fiscal year 2025, Ansvar reported a combined ratio of 102.7 per cent and return-on-equity of 1.6 per cent without stop-loss recoveries. Investment income remained a significant contributor to earnings, with a net investment yield of 3.6 per cent.

The ratings agency noted Ansvar has significant exposure to physical and sexual abuse claims from legacy policies, though it expects any adverse reserve development to be limited by intra-group reinsurance arrangements with Ecclesiastical Insurance Office.

Ansvar provides commercial property and casualty insurance to niche sectors in Australia, including care, community, faith, education and heritage organisations. The company benefits from long-established expertise in these markets but relies heavily on non-affiliated intermediaries for distribution.

AM Best said the ratings incorporated enhancement from Ecclesiastical Insurance Office, which has provided historical capital injections and significant reinsurance protection to its Australian subsidiary. The agency expects group support to continue.