SINGAPORE--(BUSINESS WIRE)--AM Best has placed under review with developing implications the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Fidelity Life Assurance Company Limited (Fidelity Life) (New Zealand).
These Credit Ratings (ratings) actions follow the announcement on 6 July 2021, that Fidelity Life has entered into an agreement with Westpac Banking Corporation to acquire its New Zealand life insurance business, Westpac Life-NZ-Limited for NZD 400 million. The transaction also includes the establishment of an exclusive 15-year life insurance distribution arrangement with Westpac New Zealand Limited.
Concurrently, Fidelity Life has announced an equity investment of NZD 140 million from a new investor, Ngāi Tahu Holdings Corporation Limited (Ngāi Tahu Holdings), to fund the acquisition partly. Fidelity Life’s current largest shareholder, the New Zealand Superannuation Fund, and Ngāi Tahu Holdings are expected to fund the majority of the acquisition.
The transactions, which are subject to customary closing conditions, including shareholder and regulatory approvals, are expected to be completed by the end of 2021.
The under review with developing implications status reflects the need for AM Best to assess fully the financial and operational impacts of the acquisition and the funding structure on Fidelity Life’s rating fundamentals, including on its balance sheet strength and business profile.
The ratings will remain under review pending completion of the acquisition, and until AM Best can complete its assessment of Fidelity Life’s post-acquisition credit rating fundamentals.
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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