AM Best has reaffirmed the credit rating of Guild Insurance, noting its balance sheet strength, adequate operating performance, business profile and appropriate enterprise risk management.

The insurer, owned by the Pharmacy Guild of Australia, has an A- (Excellent) financial strength rating, and long-term issuer credit rating of a- (Excellent), with a stable outlook.

Guild recorded a favourable pre-tax income of $28.4 million in fiscal 2022, mainly due to a covid-related provisions release, partially offset by rising claims inflation and weather-related event losses, AM Best says.

“Prospectively, AM Best expects an adequate level of operating performance to be maintained and underpinned by positive technical profits, supported by expense efficiencies over the medium term,” it says. 

Guild’s financial flexibility is considered limited given its ultimate ownership by a not-for-profit organisation, but capital adequacy in recent years has been supported by prudent capital management. The material release of covid provisions helped to bolster regulatory solvency and risk-adjusted capitalisation.

AM Best says Guild is a small insurer in the non-life sector, with gross premium of $264 million and a market share of below 1% last year, but it’s a leading provider of protection to allied health professional associations, supported by its direct access to Pharmacy Guild members.