2013-03-12 18:16:53 -

A.M. Best Asia-Pacific Limited has affirmed the financial strength rating of B++ (Good) and issuer credit rating of “bbb” of The Education Benevolent Society Incorporated (EBS) (New Zealand). The outlook for both ratings is stable.

The rating affirmations reflect EBS' conservative underwriting leverage and favorable operating performance.

EBS' net required capital was deemed adequate to support its underwriting and asset risks, as evaluated by Best's Capital Adequacy Ratio (BCAR). In addition, the premium leverage was conservative at 0.51 times.

Although EBS recorded underwriting losses in recent years, the company also earned significant commissions through providing administration services for surgical policies insured by third-party health insurance underwriters. This additional revenue helped keep the overall earnings consistently positive. From 2008 to 2012, the five-year average

operating ratio was 79%, which reflects the strong profitability of EBS’ operation.

Offsetting factors include EBS' continuing medical cost inflation and membership retention. A significant deterioration in the company's capital and surplus could lead to a downgrading of the ratings. A sustained improvement in EBS' combined ratio could result in an upgrading of the ratings.

The methodology used in determining these 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. Key criteria utilized include.

“Understanding Universal BCAR.” 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 .. .


Founded in 1899, 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 .. .

Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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A.M. Best CompanyJason Shum, +852-2827-3430Financial
Analyst jason.shum@ambest.com : mailto:jason.shum@ambest.com orMoungmo

Lee, +852-2827-3402General Manager moungmo.lee@ambest.com : mailto:moungmo.lee@ambest.com orRachelle
Morrow, +1-908-439-2200, ext. 5378Senior Manager, Public
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Peavy, +1-908-439-2200, ext. 5644Assistant Vice President,
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