Fidest – Agenzia giornalistica/press agency

Quotidiano di informazione – Anno 33 n° 335

AM Best Withdraws Credit Ratings of AIA New Zealand Limited

Posted by fidest press agency su domenica, 1 settembre 2019

AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of “aa-” of AIA New Zealand Limited (AIA New Zealand) (New Zealand), formerly known as Sovereign Assurance Company Limited. The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn these ratings as the company has requested to no longer participate in AM Best’s interactive rating process.The ratings reflect AIA New Zealand’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management. In addition, AIA New Zealand benefits from rating enhancement from its ultimate parent; AIA Group Limited (AIA or the AIA group).
AIA New Zealand’s balance sheet strength is underpinned by its risk-adjusted capitalization, which AM Best expects to remain at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio (BCAR). In addition, the company’s local regulatory solvency position in New Zealand is expected to be maintained at an appropriate level, supported by AIA’s capital management strategy and AM Best’s expectation that financial support from the parent will be forthcoming, if required. A partially offsetting balance sheet factor is the company’s increased reinsurance utilization. Since being acquired by the AIA group in 2018, AIA New Zealand has ceded a notable portion of its existing in-force protection portfolio to a third-party reinsurer.The company has a track record of strong operating performance, with a five-year average return-on-equity ratio of 15% (fiscal years 2014 to 2018). AM Best continues to view AIA New Zealand’s business profile as favorable. The company remains the largest life insurer in New Zealand, with its market share (new and in-force business) exceeding 25%. AIA New Zealand also benefits from a 20-year strategic bancassurance partnership that is in place between AIA New Zealand, AIA International Limited (New Zealand Branch) and ASB Bank Limited, a wholly owned subsidiary of the Commonwealth Bank of Australia.AIA New Zealand’s ratings incorporate rating enhancement from AIA, one of the world’s largest life insurance groups. AIA New Zealand is ultimately wholly owned by AIA, and while the subsidiary accounts for a small component of the group’s overall revenues and earnings, it is considered important to the group in terms of accessing the New Zealand life insurance market and its strategic priority of developing long-term bancassurance partnerships.

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