Guild Insurance continues a positive investment income trend: AM Best

AM Best expects GIL to maintain adequate operating performance.

Australia-based Guild Insurance (GIL) should remain steady as AM Best expects it to keep an adequate operating performance supported by positive technical profits and investment income. 

The rating agency also perceived GIL to have a very strong balance sheet, adequate operating performance, a neutral business profile, and effective enterprise risk management. GIL's ownership by The Pharmacy Guild of Australia (PGOA) has a neutral impact on its ratings.

GIL's robust balance sheet is supported by strong risk-adjusted capitalisation, evidenced by its Best’s Capital Adequacy Ratio (BCAR) at the strongest level as of fiscal year-end 2023. 

Despite limited financial flexibility due to its not-for-profit ownership, GIL maintains prudent capital management to ensure regulatory solvency and strong risk-adjusted capitalisation in the medium term. 

AM Best expects GIL to maintain adequate operating performance supported by positive technical profits and investment income. Ratings were communicated to GIL prior to publication and remain unchanged.

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Although GIL has significant exposure to medium-to long-tail liability business, it maintains conservative reserves above regulatory requirements.

Operating performance is deemed adequate, with an average return-on-equity ratio of 4.7% over fiscal years 2019-2023.

Whilst performance experienced volatility due to COVID-19, weather events, and market fluctuations, GIL's expense ratio improved through operational scale and cost management.

GIL's business profile is viewed as neutral, being a small insurer in Australia's non-life sector but a leading provider of insurance to allied health professional associations, benefiting from direct access to PGOA members.