AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of 'bbb+' (Good) of
The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect ADIC's balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
ADIC's balance sheet strength assessment is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR), a history of good internal capital generation and strong liquidity. During 2021, the company rebalanced its investment portfolio, increasing its exposure to higher risk equity investments and consequently the potential for capital volatility. Additional offsetting factors in the balance sheet strength assessment are the company's geographic concentration of investments in the
ADIC has a track record of strong operating profitability, as evidenced by a five-year (2017-2021) weighted average return on equity of 14.7%. Over the past five years, operating performance has been driven by underwriting profitability. Despite a level of volatility during this period, ADIC has recorded a five-year (2017-2021) weighted average combined ratio of 65.8% (as calculated by AM Best). After several years of excellent performance, underwriting returns decreased in 2021, which, while remaining strong, caused the combined ratio to increase to 84.7% (2020: 56.7%).
ADIC's business profile is assessed as limited, reflective of its market position as a mid-tier insurer in the
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