AM Best Affirms Credit Ratings of Beneficial Insurance Limited

SINGAPORE--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” of Beneficial Insurance Limited (BIL) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect BIL’s balance sheet strength, which AM Best categorises as adequate, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

BIL’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which remained at the strongest level as of fiscal year-end 2020. Offsetting balance sheet factors include the company’s small absolute capital base, which increases the sensitivity of capital adequacy to shock events and changes in future performance. In addition, AM Best views the company to have limited financial flexibility, with a dependence on its privately held holding company, Beneficial Holdings Limited, for financial support, if required. Over the medium term, AM Best expects the company’s strong internal capital generation to enable it to maintain its risk-adjusted capitalisation at the strongest level.

BIL has a track record of strong operating performance, having reported a five-year average return-on-equity ratio of 35.2% (fiscal-years 2016-2020). Profitability continues to be driven by robust underwriting performance and favourable investment returns. Prospectively, AM Best expects BIL to maintain strong underwriting performance over the medium term, supported by continued low loss ratios and gradually improving expense ratios, as the company executes its business growth plan and benefits from economies of scale.

BIL is a niche insurer that focuses on pet insurance in New Zealand. The company’s limited business profile assessment is largely a result of its small-scale operations, as well as product and geographical concentration in New Zealand. Prospectively, AM Best expects the company’s growth strategy to benefit from continued development of its pet insurance business, as well as its new and existing non-pet insurance related product offerings.

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 AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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