AM Best


A.M. Best Affirms Credit Ratings of Kiwi Insurance Limited


CONTACTS:

Larina Huang
Associate Financial Analyst
+65 6589 8400, ext. 218
larina.huang@ambest.com

Jason Shum
Senior Financial Analyst
+65 6589 8400, ext. 217
jason.shum@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

SINGAPORE - MAY 25, 2017 12:13 PM (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, favorable operating performance and conservative investment portfolio. As an affiliated company of New Zealand Post Limited (NZPL) and Kiwibank, Kiwi is able to benefit from cross-selling opportunities, low acquisition costs and shared resources within the group.

Offsetting rating factors are Kiwi’s relatively small in-force portfolio and low penetration rate among the bank’s customer base. Despite its overall sound profitability, underwriting results historically have been subdued and tracked behind its local bancassurance peers. This is due to significant expenses and capital expenditures being incurred ahead of realized sales. Nonetheless, due to favorable growth in premium revenue over the past five years, A.M. Best expects the operation to begin reflecting economies of scale.

The company has a short history of operating as a self-sufficient insurer. It transitioned from an outsourced model to an in-house manufacturing model in 2011 and its scale of operations has remained small. Future success of the operation will depend on how well it can leverage its affiliates’ distribution platforms and customer bases to generate more business volume.

Positive rating actions are unlikely in the near term. Negative rating actions could occur if there is a material decline in the company’s risk-adjusted capitalization or significant deterioration in its operating performance. Negative rating pressure also could occur if there is any adverse development in the financial strength 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. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.


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