SINGAPORE--(BUSINESS WIRE)--A.M. Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Foundation Life (NZ) Limited (FLNZ) (New Zealand).
The revised outlooks reflect the improved credit profile of FLNZ’s immediate holding company, Foundation Life (NZ) Holdings Limited.
The Credit Ratings (ratings) reflect FLNZ’s strong risk-adjusted capitalization, consistently positive operating performance, high-quality investment assets and low product risk profile. Moreover, a significant buffer, in the form of excess assets over guaranteed liabilities, is available to absorb potential unfavorable experiences through adjusting future bonus declarations of its participating policies.
Partially offsetting rating factors include the run-off nature of FLNZ’s business profile and its increasing per-policy expenses. In addition, A.M. Best is concerned over whether the company will implement its plan to restructure the participating policyholder benefits, and the associated business and operational risks that may arise if the plan proceeds.
While positive rating actions are unlikely, negative rating actions could result from significant deterioration in FLNZ’s risk-adjusted capitalization due to higher-than-expected dividend payouts or adverse experience.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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