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FOR IMMEDIATE RELEASE
SINGAPORE - SEPTEMBER 15, 2016 08:56 AM (EDT)
A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Kiwi Insurance Limited (Kiwi) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Kiwi’s strong risk-adjusted capitalization and sound operating performance. As an affiliated company of New Zealand Post Limited (NZPL) and Kiwibank, Kiwi’s distribution costs benefit from the company’s access to the affiliates’ customer base and nationwide store network.
Offsetting rating factors are the relatively small scale of Kiwi’s in-force portfolio and relatively high-risk retention per life, which exposes it to claims volatility. In addition, operating results in recent years have been subdued due to higher expenses incurred ahead of increased sales as the company develops its in-house insurance sales and underwriting capability.
While positive rating actions are unlikely, negative rating actions could occur due to a material decline in the company’s risk-adjusted capitalization or significant deterioration in its operating performance.
In addition, negative rating pressure could occur if there is any adverse development in the financial strength or operations of NZPL and its sister company, Kiwibank.
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 A.M. 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 A.M. 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.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.