SINGAPORE--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” of Co-operative Life Limited (Co-op Life) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Co-op Life’s adequate risk-adjusted capitalization and strong operating performance. In addition, as a wholly owned subsidiary of The Co-operative Bank Limited (Co-op Bank), the company benefits from having a distribution channel that is linked to a banking network with branches nationwide.
Co-op Life’s adequate risk-adjusted capitalization demonstrates its moderate underwriting leverage, low product risk profile and favorable liquidity position. Moreover, the company has a strong performance track record, with a five-year average return on premium of approximately 33%. This is underpinned by its robust earnings derived from in-force business and stable investment returns.
Major offsetting rating factors are Co-op Life’s modest capital size and relatively small in-force portfolio.
While positive rating actions are unlikely, negative rating actions may occur if there is material decline in risk-adjusted capitalization due to a higher-than-expected dividend payout, or if the company fails to maintain its strong operating performance. In addition, significant deterioration in Co-op Bank’s financial strength could result in negative rating actions.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.