AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Euro Accident Livförsäkring AB (Euro Accident) (Sweden). The outlook of these Credit Ratings (ratings) is stable. The ultimate parent of Euro Accident is Impilo AB, a Swedish investment firm focused on Nordic healthcare investments.
The ratings reflect Euro Accident’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).
Euro Accident’s balance sheet strength assessment of strong is supported by its strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), along with its conservative and liquid investment portfolio, prudent reserving and robust reinsurance programme. AM Best expects the company’s risk-adjusted capitalisation to remain at the strongest level prospectively, underpinned by good earnings generation and taking into account projected dividend payments to service the debt held by one of the insurer’s intermediate parent holding companies.
Euro Accident has delivered robust results since 2019, which was its first full year of operation in its current capacity as a Sweden-domiciled insurance company. In 2021, the company achieved a combined ratio of 96.3% (2020: 92.9%) (as calculated by AM Best) and a return-on-equity ratio of 24% (2020: 22.9%). The 2022 result is expected to be negatively impacted by unrealized losses on the investment portfolio, however, technical profitability is expected to remain strong.
Euro Accident was first established as a Swedish agency in 1996 and through its role as an agency and later as an insurer, it has a long-established position as a provider of life and health insurance in its core market of Sweden, where it benefits from strong broker and partner relationships. Additionally, the company expanded to Denmark in 2018 and to Norway in 2020 and anticipates material growth in these markets. The expansion is expected to benefit the company’s business profile by increasing its geographic diversification; however, it does carry with it a moderate level of operational and execution risk.
AM Best considers Euro Accident’s ERM to be developed and appropriate for the company’s risk profile and operational scope.
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