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FOR IMMEDIATE RELEASE
SINGAPORE - MAY 27, 2015 08:21 AM (EDT)
A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of "bbb" of Product Care (NZ) Limited (PCL) (New Zealand). The outlook for both ratings is stable.
The rating affirmations for PCL reflect its adequate risk-adjusted capitalization, prospective favorable underwriting results and conservative investment strategy.
PCL's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio, is adequate for its rating level, largely due to the reinsurance protection received from highly rated reinsurers. Investments solely in low risk assets such as cash and term deposits are also supportive of its ratings. Prospective favorable underwriting results are driven primarily by management initiatives in prior years, including premium rate adjustments and better claims management. This has translated into an improvement in loss ratios for the New Zealand business that was transferred from an affiliate of PCL.
These positive rating factors are offset by the company's modest capital size, small in-force portfolio, and its high reliance on one external customer to provide all premium revenues on an ongoing basis.
The company is well-positioned for its current ratings. Downward pressure on the ratings would occur if the regulatory solvency capital falls short of its forecast provided to A.M. Best, or if the company fails to maintain its strong operating performance.
The methodology used in determining these interactive ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology .
Key insurance criteria reports utilized:
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to rating(s) 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 visit A.M. Best's Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.