SINGAPORE--(BUSINESS WIRE)--A.M. Best has commented that the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” of Provident Insurance Corporation Limited (Provident) (New Zealand) remain unchanged. The outlook of these Credit Ratings (ratings) remains stable.
This commentary follows Provident acquiring the business assets of Credit Union Insurance Limited (New Zealand) (Co-op), Provident’s current underwriter for motor vehicle insurance. The preliminary stage of the transaction was completed in December 2017. Provident made an initial payment and is underwriting its own motor vehicle policies through Co-op’s systems and personnel. Stage two of the transaction involves the transfer of Co-op’s existing book of policies to Provident, pending regulatory approval that is likely to finalize by the next quarter.
Though the acquisition is funded out of Provident’s existing capital, A.M. Best expects Provident’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), to remain, in the near term, at a level that is supportive of the current ratings.
The business transition and acquisition payment is expected to complete in the third quarter of 2018. A.M. Best will continue to monitor the progress of the transaction and evaluate developments for any impact on the ratings.
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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