AM Best affirms Hollard Insurance’s outlook as stable

The company’s strong financial flexibility is attributed to shareholder support, including capital injections and hybrid debt issuances.

Hollard Insurance Company Pty Ltd’s (HIC) outlook is described as stable by AM Best, reflecting its strong balance sheet strength, as well as an adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The assessment also considers the neutral impact from the company’s ownership by Hollard Holdings Australia Pty Ltd (HHA).

HIC’s balance sheet strength, which was assessed as strong by AM Best, is supported by its unconsolidated risk-adjusted capitalisation, which is expected to improve to a very strong level in the medium term due to improved earnings retention.

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The company’s operating performance is labelled as adequate, with an average return-on-equity ratio of 4.5% over fiscal-years 2019-2023 on an unconsolidated basis. 

HIC has recorded limited underwriting profits in recent years and is expected to show an upward trend due to a lower expense ratio in the medium term.

Business profile is assessed as neutral, with HIC as one of the top 10 non-life insurers in Australia based on gross written premiums.

Though HIC has recorded robust premium growth in the last 10 years, prospective premium growth is expected to be modest, due to the company focusing on operational efficiency and technology development.

Concurrently, AM Best has withdrawn HIC’s ratings as the company has requested to no longer participate in the agency’s assessments.