SINGAPORE--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Cigna Life Insurance New Zealand Limited (CLINZ) (New Zealand). The outlook for both ratings is stable.
The affirmation of the ratings reflects CLINZ's strong risk-adjusted capitalization, consistently positive operating results and high quality investment portfolio.
Under CLINZ's baseline projections, its risk-adjusted capitalization is expected to remain strong. Growth in required capital is expected to remain well supported by solvency capital. Overall profitability has been positive and has been complemented by CLINZ's high quality investment portfolio, which is expected to remain at well over 100% of net premium revenue.
Offsetting rating factors include profitability of new products and CLINZ's reliance on a small number of external partners to generate a large proportion of premiums.
CLINZ has been diversifying beyond its core credit insurance business, which has resulted in an increase in the claims ratio. In addition, the operation remains reliant on external partners to generate the majority of its revenues, but CLINZ has continued to develop its own direct to customer channel, including a recent partnership with a large supermarket chain in New Zealand.
CLINZ is well-positioned at its current rating level. A significant deterioration in its Best’s Capital Adequacy Ratio as a result of high-than-expected dividend payments, or major deterioration in sales performance, could result in downward pressure to its ratings.
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 Members of Insurance Groups
- 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 press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.
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