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FOR IMMEDIATE RELEASE
OLDWICK - OCTOBER 06, 2015 12:05 PM (EDT)
A.M. Best has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of “bbb-” of New Zealand Local Government Insurance Corporation Limited (New Zealand), trading as Civic Assurance (Civic). The outlook for both ratings is negative.
The ratings mainly reflect A.M. Best’s concerns over Civic’s reinsurance recoverable risk, which remains sizable relative to the company’s overall capitalization.
Partially offsetting this negative rating factor is Civic’s risk-adjusted capitalization as determined by Best’s Capital Adequacy Ratio (BCAR), which remains supportive of its ratings. The negative outlook on the ratings mainly reflects the uncertainties regarding the reaching of a global settlement between Civic Assurance, Christchurch City Council and its panel of reinsurers.
Factors that could result in negative rating actions include operating losses, further reinsurance disputes, prolonged delay in its reinsurance recovery process or a significant deterioration in Civic’s risk-adjusted or absolute capitalization.
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.