A.M. Best has assigned a Financial Strength Rating of B++ (Good)
and a Long-Term Issuer Credit Rating of “bbb” to Irwell Insurance
Company Limited (Irwell) (United Kingdom). The outlook assigned
to these Credit Ratings (ratings) is stable.
The ratings reflect Irwell’s balance sheet strength, which A.M. Best
categorises as strong, as well as its adequate operating performance,
limited business profile and appropriate enterprise risk management
The company’s risk-adjusted capitalisation, as measured by Best’s
Capital Adequacy Ratio (BCAR), was assessed at the strongest level at 31
March 2018. Irwell has a high quality asset base and excellent liquidity
position, highlighted by a current liquidity ratio of 120%. A.M. Best
considers Irwell’s investment portfolio to be conservative and is
focused toward fixed income instruments. The company has a small capital
base, with capital and surplus of GBP 21.5 million at financial year-end
31 March 2018, which can give rise to fluctuations in its solvency
position and is considered an offsetting factor to A.M. Best’s balance
sheet strength assessment.
Irwell has generated a five-year average return on equity of 11.9%, and
whilst the company has generated an operating profit since 2010, results
have been relatively volatile. Irwell has a track record of solid
technical performance, and the company’s strong relationship with the
Peninsula Business Services Group Ltd (PBSG), partially as a result of
common shareholders, gives rise to the excellent flexibility Irwell has
in its pricing and commission arrangements, which helps to control
profitability. Investment results are modest due to the company’s
conservative investment allocation, and during the financial year ending
31 March 2018, Irwell reported an investment yield of 1.7%.
Whilst A.M. Best considers Irwell’s business profile to be limited, the
company has a niche position as a provider of insurance products for
agents operating within PBSG. Irwell is considered a specialist in
providing legal expenses cover, and given the company’s focus toward
this line of business, it is materially exposed to legislative changes
relating to employment law. Net written premiums increased by 19% to GBP
27 million for financial year-end 31 March 2018, driven by the expansion
A.M. Best considers the company’s ERM capability to be in line with its
risk profile. Irwell operates using an outsourcing model with a
significant amount of authority delegated to its distribution partners.
Ensuring sufficient oversight of its partners and consultants is one of
Irwell’s principal risks; however, this is mitigated by regular
monitoring and an experienced management team.
This press release relates to Credit Ratings that have been published
on A.M. 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 A.M. Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and A.M. Best press releases, please view Guide
for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating
Action Press Releases.
A.M. Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.a.m.best.com
for more information.
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.
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A.M. BestThomas Bateman, CFAFinancial
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