A.M. Best Upgrades Credit Ratings of Health Services Welfare Society Limited

SINGAPORE--()--A.M. Best has upgraded the Financial Strength Rating to B+ (Good) from B (Fair) and the Long-Term Issuer Credit Rating to “bbb-” from “bb+” of Health Services Welfare Society Limited (New Zealand), trading as Accuro Health Insurance (Accuro). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

The ratings reflect Accuro’s balance sheet strength, which A.M. Best categorizes as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The rating actions mainly reflect sustained improvement in Accuro’s risk-adjusted capitalization, primarily due to an improved operating performance and capital growth over the past five years. This turnaround in its operating performance was driven mainly by continued pricing adjustments and a favorable claims experience on its current product offerings. In addition, the company’s expense ratio has improved due to its operating costs being spread across a growing premium base.

Accuro’s balance sheet strength is supported by its improved risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). However, the company has relatively high underwriting leverage and modest capital size compared with other New Zealand health insurers. A.M. Best expects Accuro’s risk-adjusted capitalization to remain at the current level, supported by positive operating earnings and steady premium growth.

Accuro is a non-profit organization that provides health insurance. The company is a small-size insurer in the New Zealand health insurance industry, with a market share of less than 2% based on in-force premiums. Despite challenging market conditions, its membership has grown steadily over the past five years due to the development of new products.

Accuro has a developed risk management program based on its current size and complexity. The company has demonstrated an overall satisfactory ability to address most of its risks, primarily through its ability to adjust premium rates quickly, prudent claims management and holding liquid assets in its investment portfolio. Therefore, A.M. Best considers Accuro’s risk management capabilities to be aligned appropriately with its risk profile.

Accuro is well-positioned for its current rating level. Negative rating actions may occur if its risk-adjusted capitalization deteriorates significantly due to underwriting deficits.

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.

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Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Sin Yee Chuah, +65 6303 5022
Associate Financial Analyst
sinyee.chuah@ambest.com
or
Jason Shum, +65 6303 5020
Associate Director, Analytics
jason.shum@ambest.com
or
Christopher Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1-908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Sin Yee Chuah, +65 6303 5022
Associate Financial Analyst
sinyee.chuah@ambest.com
or
Jason Shum, +65 6303 5020
Associate Director, Analytics
jason.shum@ambest.com
or
Christopher Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1-908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com