AM Best Affirms Credit Ratings of Co-operative Life Limited
SINGAPORE--(BUSINESS WIRE)--Oct 11, 2019--
AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” of Co-operative Life Limited (Co-op Life) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Co-op Life’s balance sheet strength, which AM Best categorizes as adequate, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
Co-op Life’s balance sheet strength is underpinned by risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which is categorized as strongest. This reflects the company’s low underwriting leverage, moderate reliance on third-party reinsurance and conservative investment strategy. Offsetting balance sheet factors include the company’s small absolute capital base, which increases its sensitivity to shock events, as well as to changes in future performance, dividend payouts and intangible assets.
Co-op Life has a track record of strong operating performance, with the company having reported a five-year average return on equity of 30% (fiscal-years 2015-2019). Profitability continues to be driven mainly by the robust underwriting performance of its in-force life business, coupled with low single-digit but stable investment returns. Prospectively, AM Best expects favorable claims experience to drive continued strong operating performance.
Co-op Life is a small-sized life insurer focused mainly on term life insurance and loan protection insurance products in New Zealand. The company’s limited business profile assessment is largely a result of its small-scale operations, as well as limited product and geographical diversification in New Zealand. The company has a market share of less than 1% in New Zealand’s life insurance industry, based on 2019 gross written premiums. Although Co-op Life benefits from distributing its products through its parent’s banking network, the company has a low penetration rate among the bank’s customer base.
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 Understanding 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 and information provider with an exclusive focus on the insurance industry. Visit www.ambest.com for more information.
Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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KEYWORD: AUSTRALIA/OCEANIA SINGAPORE NEW ZEALAND ASIA PACIFIC EUROPE
INDUSTRY KEYWORD: FINANCE BANKING PROFESSIONAL SERVICES INSURANCE
SOURCE: AM Best
Copyright Business Wire 2019.
PUB: 10/11/2019 10:16 AM/DISC: 10/11/2019 10:16 AM