HONG KONG--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of B++ (Good) and issuer credit rating of “bbb” of The Education Benevolent Society Incorporated (EBS) (New Zealand). The outlook for both ratings is stable.
The ratings primarily reflect EBS’ strong risk-adjusted capitalization and consistently favorable operating results.
As measured by Best’s Capital Adequacy Ratio (BCAR), EBS’ balance sheet strength is deemed to be strong, characterized by low underwriting leverage, strong liquidity and high quality investments. Despite the underwriting losses in recent years, the company has been fully subsidized by a stable stream of other income, principally referral commissions. As a result, operating results have remained consistently positive over the last five-year period.
The positive rating factors are partially offset by declining premiums, principally due to membership trends.
Factors that could lead to negative rating actions for EBS include a weakened competitive market position in its niche educational union sector or a significant deterioration of the investment portfolio.
The methodology used in determining these interactive ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
This rating announcement has been issued by A.M. Best Asia-Pacific Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
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