Ansvar sees positive earnings despite PSA claims

The company recorded positive operating earnings in 2022 and 2023.

Ansvar Insurance demonstrated prudent capital management and financial flexibility, despite challenges from physical and sexual abuse (PSA) claims, AM Best said. These claims have been largely mitigated by an excess-of-loss cover provided by Ecclesiastical Insurance Office (EIO), which also supports Ansvar through capital injections and reinsurance protection.

Ansvar’s very strong balance sheet strength, supported by its robust risk-adjusted capitalisation measured by Best’s Capital Adequacy Ratio (BCAR), should remain “very strong” over the medium term.

Ansvar’s operating performance is assessed as marginal, with volatility due to weather-related events and PSA claims. 

However, positive operating earnings in recent years, supported by a stop loss reinsurance program with EIO and strong investment income, have contributed to stability.

“Operating performance metrics exhibited heightened volatility over the past five years, predominantly as a result of weather-related events and PSA claims. However, the company recorded positive operating earnings in 2022 and 2023, supported by recoveries arising from a stop loss reinsurance programme with EIO. Investment income continues to be a key contributor to overall earnings. In 2023, the company reported a net investment yield of 5.1%,” the AM Best report said.

As a niche insurer, Ansvar focuses on commercial property and casualty products for specific sectors in Australia, including care, community, faith, education, heritage, and property owners. 

Despite its strong expertise and brand recognition in these sectors, Ansvar’s distribution is somewhat limited due to its reliance on non-affiliated intermediaries.

Looking forward, AM Best expects continued support from EIO to help mitigate any ongoing volatility in Ansvar’s performance.