AM Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb” (Good) to NPA Insurance Limited (NPAI) (United Kingdom). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect NPAI’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.

NPAI is a subsidiary of the National Pharmacy Association Limited (NPA) and its core business relates to insurance products offered to pharmacies across the UK. Over recent years, NPAI has grown a book of delegated authority business under the “Peach” brand, which now accounts for approximately half of its gross written premium. Although the company is a small player in the UK insurance market and faces strong competition, it has a good position in the niche pharmacy insurance segment supported by access to business from pharmacies that are members of the NPA.

NPAI’s strong balance sheet assessment is underpinned by its risk-adjusted capitalisation that is expected to remain at the strongest level over the long term, as measured by Best’s Capital Adequacy Ratio (BCAR). While the company’s business is expected to remain dependent on reinsurance for the capacity that it offers, its reinsurance partners are generally of excellent credit quality. Investments are managed conservatively and liquidity is good.

NPAI’s performance improved significantly from 2024, largely due to structural changes in its expense base that are expected to be sustainable. This followed several years of underwriting losses, driven by relatively high expenses. The company’s loss ratio has remained relatively stable, at a good level. While the company has a long history of managing its core pharmacy insurance risks and has developed good in-house expertise, its delegated business is newer and brings with it relatively large per risk exposure and a reliance on managing general agents for underwriting expertise. AM Best considers NPAI’s risk management capabilities to be commensurate with its risk profile.

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