2013-09-18 18:04:02 -
A.M. Best Asia-Pacific Limited has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Kiwi Insurance Limited (Kiwi) (New Zealand). The outlook for both ratings is stable.
The affirmations reflect Kiwi’s status as a member of the New Zealand Post Limited (NZPL) group of companies and its balance sheet strength.
Financial services, including Kiwi’s bancassurance business, remain a strategic growth area for the NZPL group. This provides Kiwi with access to its affiliates’ nationwide store network and representation among its senior management (such as Kiwibank Limited), which supports Kiwi’s distribution and branding. Balance sheet strength, as measured by Best’s Capital Adequacy Ratio (BCAR), is expected to remain supportive of its ratings, with capital remaining in excess
of solvency requirements over the next 36 months, according to the company’s current business plan.
Offsetting rating factors include risks to Kiwi’s profitability. As the company transitions to becoming a self-supporting bancassurer, costs are incurred to handle self-manufactured products before budgeted volumes have materialized. Until this occurs, at least temporarily, Kiwi’s profitability could be lower, with a corresponding impact on its BCAR.
Kiwi remains reliant on its affiliates for distribution and branding.
Cost rationalization, resulting in a significant reduction of NZPL group’s store network, marketing budget and shared resources could negatively impact Kiwi’s business generation.
Kiwi is well positioned to maintain its current ratings. A significant deterioration in its BCAR could lead to downward pressure on the ratings.
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 : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
A.M. Best Asia-Pacific Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
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