AM Best Confirms Motors Insurance Company Limited Credit Ratings
LONDON, April 08, 2022–(BUSINESS WIRE)–AM Best affirmed the financial strength rating of A- (Excellent) and the issuer’s long-term credit rating of “a-” (Excellent) from Motors Insurance Company Limited (MICL) (UK). The outlook for these Credit Ratings (ratings) is stable. MICL is a wholly owned subsidiary of AmTrust International Insurance, Ltd., which is a member of the AmTrust group.
The ratings reflect the strength of MICL’s balance sheet, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate management of business risks.
MICL’s balance sheet is underpinned by the highest level of risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio (BCAR), which is supported by prudent reservation practices and an investment portfolio low risk liquid. Looking forward, AM Best expects MICL’s risk-adjusted capitalization to remain at the highest level, benefiting from stable operating performance and a prudent capital management policy. The company’s moderate reliance on reinsurance and concentration with a single reinsurance counterparty are partially mitigated by the excellent credit quality of the reinsurer.
MICL has a track record of strong overall performance, generating a five-year (2017-2021) weighted average return on equity ratio of 10.1%. Earnings are supported by strong and stable underwriting results, demonstrated by a combined ratio that has fluctuated between 89% and 94% over the past five years.
MICL provides automobile warranty and supplementary automobile insurance policies, mainly distributed by retail intermediaries. The company has a well-established competitive position in the UK car warranty market, which generates the majority of its revenue, supported by business in other European countries, as well as globally. AM Best expects the company’s business volume to remain stable.
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 relevant 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 more information on the use and limitations of credit rating opinions, please see Best’s Guide to Credit Ratings. For more information on the proper use of Best’s Credit Scores, Best’s Performance Ratings, Best’s Preliminary Credit Ratings, and AM Best’s press releases, please see the Guide to Proper Use of Best’s Best ratings and reviews.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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