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 remains stable.
The affirmation of the ratings reflects CLINZ’s supportive risk-adjusted capitalization, consistently positive operating results and high quality investment portfolio.
Under CLINZ’s baseline projections, A.M. Best expects the company’s risk-adjusted capitalization to remain favorable in spite of planned dividend payout to shareholders. Growth in capital requirements is expected to remain well supported by solvency capital. Overall profitability has been positive and supported by stable investment returns.
Offsetting rating factors include CLINZ’s continued reliance on a small number of external partners to generate a large proportion of premiums and an increase in policy maintenance expenses. Over the years, CLINZ has been diversifying beyond its core credit insurance business by developing its own Direct-to-Customer channel and new affinity partnerships. Nevertheless, A.M. Best remains cautious of the arising strategic risk regarding the successful implementation of CLINZ’s new sales campaigns.
CLINZ is well-positioned at its current rating level. A significant deterioration in its risk-adjusted capitalization as a result of higher-than-expected dividend payments, operating loss or major decline in sales performance could result in downward pressure on its ratings.
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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