AM Best Upgrades Issuer Credit Rating of Beneficial Insurance Limited

SINGAPORE--(BUSINESS WIRE)--AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” (Good) from “bbb” (Good) and affirmed the Financial Strength Rating (FSR) of B++ (Good) of Beneficial Insurance Limited (Beneficial) (New Zealand). In addition, AM Best has revised the Long-Term ICR outlook to stable from positive, while the outlook of the FSR is stable.

The Credit Ratings (ratings) reflect Beneficial’s balance sheet strength, which AM Best assesses as adequate, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

The Long-Term ICR upgrade reflects the sustained improvement in Beneficial’s balance sheet strength rating fundamentals, supported by its robust internal capital generation and appropriate retention of earnings. The company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), has consistently remained at the strongest level with a comfortable buffer, and is expected to remain at this level over the medium term. This is supported by prudent capital management, conservative investment strategy and moderate net underwriting leverage. Partially offsetting balance sheet strength factors include Beneficial’s small absolute capital base, which is viewed to be susceptible to volatility in stress scenarios, as well as to negative deviations in future operating performance as compared to current expectations. AM Best’s balance sheet strength analysis also incorporates a neutral holding company impact from the company’s ownership by Beneficial Holdings Limited.

AM Best assesses Beneficial’s operating performance as strong. The assessment reflects its track record of strong operating performance metrics. In fiscal year 2025, the company reported a combined ratio (net/net, IFRS 17) of 71.1% and return-on-equity of 33.3%. Profitability is driven by the favourable underwriting performance of Beneficial’s core pet insurance portfolio. Investment income remains a stable contributor to the company’s overall profits, with a net investment yield of 6.3% in fiscal-year 2025. Prospectively, AM Best expects Beneficial to maintain its strong operating performance, supported by its robust underwriting profits and positive investment income.

AM Best views Beneficial’s business profile to be limited, largely reflecting its small-scale operations and limited product and geographic diversifications. The company is a niche insurer with a good market presence in the pet insurance sector in New Zealand, albeit maintaining a small overall market share in the domestic general insurance industry. Beneficial's product risk profile is considered low given its focus on pet insurance, which is generally less exposed to large losses and catastrophe events.

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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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