HONG KONG--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of "bbb-" of New Zealand Local Government Insurance Corporation Limited (Civic Assurance) (New Zealand). The outlook for both ratings is negative.
The ratings mainly reflect A.M. Best’s concerns over Civic Assurance’s reinsurance recoverable risk, which remains sizable relative to the company’s overall capitalization.
Partially offsetting these negative rating factors is Civic Assurance’s risk-adjusted capitalization as determined by Best’s Capital Adequacy Ratio (BCAR), which remains supportive of its ratings. The negative outlook on the ratings mainly reflects the uncertainty regarding the outcome of an arbitration between Civic Assurance and one of its reinsurers.
Factors that could result in negative rating actions include negative regulatory action, an unfavorable arbitration outcome, further reinsurance disputes or higher-than-expected operating expenses.
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.
Key insurance criteria reports utilized:
- Rating Run-Off Insurers and Specialists
- Risk Management and the Rating Process for Insurance Companies
- Understanding Universal BCAR
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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