A.M. Best Affirms Ratings of CBL Insurance Limited

HONG KONG--()--A.M. Best has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of “bbb-” of CBL Insurance Limited (CBL) (New Zealand). The outlook for both ratings remains positive.

The affirmation of the ratings and outlook recognizes CBL's continued profitable underwriting performance over the past five years and prudent investment strategy, as well as anticipated profits provided by European Insurance Services Limited (EISL) and the Australian deposit bond business acquired in 2012. The ratings also consider a capital injection that occurred in 2014, and an expected high level of earnings retention, as detailed in a forecast provided to A.M. Best.

Partially offsetting these positive rating factors are CBL's increased underwriting risks relative to capital due to its continued business expansion, which includes long-tail builders’ liability lines. Goodwill assets associated with the purchase of EISL in 2011 remains substantial to capital. As a result, continued capital growth of CBL and profitability of EISL remains critical in supporting CBL's ratings.

Factors that may lead to future positive rating actions for CBL include substantial reduction in its underwriting leverage and consistently favorable operating results. Negative rating actions could occur if the company's loss ratios or risk-adjusted capitalization deteriorate substantially.

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.

Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Ken Chow, +852-2827-3426
Senior Financial Analyst
ken.chow@ambest.com
or
Moungmo Lee, +852-2827-3402
General Manager
moungmo.lee@ambest.com
or
Jim Peavy, +(1) 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Ken Chow, +852-2827-3426
Senior Financial Analyst
ken.chow@ambest.com
or
Moungmo Lee, +852-2827-3402
General Manager
moungmo.lee@ambest.com
or
Jim Peavy, +(1) 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com