SINGAPORE--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb” of Partners Life Limited (Partners Life) (New Zealand). The outlook for both ratings remains stable.
The rating affirmations reflect Partners Life’s adequate balance sheet strength and good business profile in the New Zealand life insurance industry’s adviser channel. The ratings also assume that Partners Life will take necessary steps to ensure that new requirements under “Solvency Standard for Life Insurance Business 2014,” issued by the Reserve Bank of New Zealand, will not result in material increases to the company’s solvency capital requirement.
Partners Life is holding a moderate amount of capital over its local regulatory capital requirement. In addition, the company’s risk-based capitalization, as evaluated by Best’s Capital Adequacy Ratio, is supported by its reinsurance arrangement and conservative investments.
Over its first four years of operation, Partners Life has been recognized as the fastest-growing life insurer in New Zealand. For the 12-month period ending Sept. 30, 2014, Partners Life, as a rapidly growing life insurer, continued to maintain its status as one of the market leaders in new business production, capturing a market share of over 15% (second only to the largest life insurer in New Zealand).
Partially offsetting these positive rating factors are the company’s capital-intensive operating model, relatively small in-force portfolio and high reinsurance leverage.
Partners Life remains reliant on financial advisers to generate its new business, which makes the company's operating model very capital intensive. In addition, with a relatively small in-force portfolio, the potential to experience variations in operating results is inherently higher than its peers.
Partners Life is well-positioned at its current rating level. The ratings could be downgraded if its local regulatory solvency margin falls below the company's projection provided to A.M. Best due to large impairments in net insurance contract assets or if the company fails to raise sufficient capital on a timely basis to support its operating plan.
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:
- Analyzing Insurance Holding Company Liquidity
- Insurance Holding Company and Debt Ratings
- Rating New Company Formations
- 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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