KUALA LUMPUR, April 26 -- Global credit rating agency AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of ‘a-’ of Tower Limited (Tower) New Zealand, with the outlook of these Credit Ratings (ratings) being stable.
The ratings reflect Tower’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management, according to a statement.
Tower’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, which was at the strongest level in fiscal-year 2020 and is expected to remain at this level over the medium term.
United States-based AM Best views Tower as having robust financial flexibility, a prudent reinsurance programme and a conservative investment strategy. Whilst the company’s balance sheet remains subject to ongoing loss exposure from the Canterbury earthquakes, AM Best views a recent settlement in respect of recoverables due from the Earthquake Commission to have reduced Tower’s risk exposure substantially in this area.
Tower’s strengthened operating performance over recent years was driven primarily by increased stability in Canterbury Earthquake reserves and a largely benign environment for weather-related losses.
AM Best views Tower’s business profile as neutral. The company is a medium-sized non-life insurer that operates predominantly in New Zealand, with some operations based in the Pacific Islands. Tower has a market share of approximately four per cent in New Zealand’s general insurance market and reported gross written premium of NZD 377 million (US$248 million) in fiscal-year 2020. (US$1 = RM4.102)
While the company’s core product offerings are domestic home and motor insurance, typically distributed through direct channels and partnerships, AM Best views Tower’s ERM framework as developed, considering it to be appropriate given the size and complexity of its operations.
For more information, visit www.ambest.com.
-- BERNAMA
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