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AM Best Affirms Credit Ratings of Irwell Insurance Company Limited

AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good) of Irwell Insurance Company Limited (Irwell) (United Kingdom). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Irwell’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

Irwell’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), at financial year-end 31 March 2022 (FY22). AM Best expects Irwell’s risk-adjusted capitalisation to remain at the strongest level with internal capital generation supporting future growth. The assessment considers Irwell’s high quality asset base and very strong liquidity position, highlighted by liquid assets covering net technical reserves by 180% at FY22. The assessment also factors Irwell’s moderate dependence on reinsurance to write new risks with high gross limits relative to its capital base. In addition, the company’s capital base is relatively small (capital and surplus of GBP 29 million at FY22), which exposes its risk-adjusted capitalisation to potential volatility.

Irwell has a track record of adequate, albeit volatile, operating performance, demonstrated by a five-year (FY18-22) weighted average return on equity of 13%. Underwriting profits are the main driver of earnings, with the company reporting a five-year weighted average combined ratio of 88%. Irwell’s close relationship with the Peninsula Business Services Group Ltd (PBSG), a group of service companies that distribute its products and is ultimately owned by Irwell’s shareholders, supports its ability to control profitability through pricing and commission arrangements. In 2021, Irwell also started to offer its products to the intermediary market, to diversify its income and leverage on the expertise of its management team. The performance of the new products is expected to be supported by Irwell’s cautious underwriting approach and good quality reinsurance structure in place, which protects earnings against large limit losses. Operating earnings have been supplemented historically by modest but relatively stable investment results, reflecting the company’s conservative investment portfolio.

Irwell benefits from a niche position as a provider of legal expenses and general liability insurance to clients of companies operating within PBSG that provide advice on human resources, tax investigation and health and safety services in the United Kingdom (UK). Because of its specialist focus, Irwell is exposed materially to legislative changes related to UK employment and tax laws. AM Best expects the company’s portfolio to grow over the medium term, supported by the development of existing and new client segments.

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 pertinent 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 additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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