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FOR IMMEDIATE RELEASE
SINGAPORE - JULY 28, 2016 12:05 PM (EDT)
A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb” of Youi NZ Pty Limited (Youi NZ) (New Zealand). The outlook for each rating remains stable.
The rating affirmations reflect Youi NZ’s strong risk-adjusted capitalization, resulting from the company’s low underwriting leverage, its prudent reinsurance program and conservative investments. In addition, actual claims experience during the company’s first two years of operation has been largely consistent with the assumptions it uses in pricing its policies.
Partially offsetting these positive rating factors are the challenges in executing its business plan and a high expense ratio. Additionally, despite a prudent reinsurance program that helps reduce the company’s capital requirement and claim-related volatility, Youi NZ’s financial condition is relatively sensitive to the cost of reinsurance.
While positive rating actions are unlikely in the near term, a material decline in Youi NZ’s risk-adjusted capitalization from failing to meet its planned underwriting and investment performance may trigger negative rating actions.
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 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 see A.M. Best’s Recent Rating Activity web page.
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