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AM Best Affirms Credit Ratings of Protector Forsikring ASA
[January 17, 2020]

AM Best Affirms Credit Ratings of Protector Forsikring ASA


AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of "bbb+" of Protector Forsikring ASA (Protector) (Norway). The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect Protector's balance sheet strength, which AM Best categorises as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

Protector's risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio (BCAR), remains supportive of the balance sheet strength assessment of strong, despite a material decline in 2018, to a BCAR assessment of strong down from strongest in 2017, driven by a reduction in capital and surplus combined with strong top-line growth. AM Best expects prospective risk-adjusted capitalisation to improve over the medium term, supported by remedial underwriting actions and reduced top-line growth. The balance sheet strength assessment also factors in the reduction, over the past 15 months, in the company's exposure to riskier investment classes, although the allocation toward equities and non-rated bonds remains relatively high. AM Best also considers the company's moderate dependence on third-party reinsurance as a partially offsetting rating factor.

Protector has a good historical earnings track record, as demonstrated by a five-year weighted average return on equity of 15% (2014-2018) (as calculated by AM Best). However, performance deteriorated in 2018 to a pre-tax loss of NOK 341 million (USD 39.7 million), negatively affected by unrealised losses from investment holdings and the requirement to strengthen reserves relating to change of ownership insurance, which was put into run off in 2018. AM Best expects the company to report a modest profit in 2019, predominantly underpinned by investment gains. Underwriting performance for the year was impacted negativel by high claims inflation within the company's motor book in the Nordic countries and the occurrence of a number of large property claims. AM Best expects underwriting performance to improve in 2020, following various remedial actions taken by the company in 2018 and 2019 to address areas of underperformance.



Established in 2004, Protector benefits from a relatively strong foothold and expertise in Norway's commercial and public insurance sector. The company has grown rapidly in recent years, as evidenced by gross written premiums increasing to NOK 4.3 billion (USD 493 million) in 2018 from NOK 1.2 billion (USD 201 million) in 2011. Expansion has been driven principally by the company entering new markets, including Sweden and Denmark, and more recently the United Kingdom and Finland. At the same time, Protector's geographical diversification has improved in line with its expansion activity.

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 media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases.


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

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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