SINGAPORE--(BUSINESS WIRE)--A.M. Best has placed under review with developing implications the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of “aa-” of Sovereign Assurance Company Limited (Sovereign) (New Zealand).
These Credit Rating (rating) actions follow an announcement on July 2, 2018, that AIA International Limited (AIAI), a wholly owned subsidiary of AIA Group Limited (the AIA group), has completed its acquisition of Sovereign from the Commonwealth Bank of Australia (Commonwealth Bank). AIAI and the Commonwealth Bank originally entered into a sale agreement in September 2017, with the latest announcement following necessary regulatory approvals being granted and the transfer of ownership of Sovereign to AIAI, through the purchase of the entire share capital of its intermediate holding company, ASB Group (Life) Limited. The transaction also marks the commencement of a 20-year strategic bancassurance partnership between the AIA group and ASB Bank Limited, a wholly owned subsidiary of the Commonwealth Bank.
The ratings have been placed under review with developing implications while A.M. Best assesses the impact of the change in ownership. Among other factors, A.M. Best will need to consider the planned integration of Sovereign within the AIA group, any expected changes in strategy, and any implicit or explicit support to be afforded to Sovereign by the AIA group. A.M. Best also will give consideration to the fundamentals of the AIA group and any impact this has on the ratings of Sovereign.
A.M. Best expects to resolve the under review status following the conclusion of its assessment.
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