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FOR IMMEDIATE RELEASE
SINGAPORE - AUGUST 16, 2017 02:59 PM (EDT)
A.M. Best has revised the implications of the under review status to negative from developing for the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of TOWER Insurance Limited (TIL) (New Zealand). Concurrently, A.M. Best has revised the implication of the under review status to negative from developing for the Long-Term ICR of “bbb-” of TIL’s ultimate parent, TOWER Limited (TL) (New Zealand).
The revision of the under review status to negative implications comes after the Commerce Commission of New Zealand announced that it has declined to grant clearance to Vero Insurance New Zealand Limited to acquire up to 100% of the shares in TL. The negative implications status reflects TL’s relatively weak balance sheet strength for its current rating levels. A.M. Best’s concern, however, is offset partially by management considering a capital raise to strengthen the group’s consolidated capital position.
The ratings will remain under review with negative implications pending further discussions between A.M. Best and TL’s management team related to its capital-raising initiatives.
Downward rating pressure could result if TL fails to improve its consolidated capital position to a level more supportive of the current ratings.
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