NEW ZEALAND’S FIDELITY LIFE ASSURANCE RATINGS AFFIRMED EXCELLENT - AM BEST

KUALA LUMPUR, March 15 (Bernama) -- Global credit rating agency, AM Best has affirmed New Zealand’s Fidelity Life Assurance Company Limited (Fidelity Life Assurance) financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent).

These credit ratings (ratings), which have a stable outlook reflect Fidelity Life Assurance’s balance sheet strength, that AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

Fidelity Life Assurance’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which is at the strongest level as of fiscal year ending June 30, 2023, as measured by Best’s Capital Adequacy Ratio.

The company has a robust capital management strategy that supports a solid regulatory solvency position, as well as the maintenance of risk-adjusted capitalisation at the strongest level over the medium term.

In a statement, AM Best said the ratings partially offsetting balance sheet strength factor is Fidelity Life Assurance’s high reliance on third-party reinsurance.

AM Best also views Fidelity Life Assurance as having good financial flexibility, supported by its two largest shareholders, NZ Superannuation Fund and Ngāi Tahu Holdings Corporation Limited.

Over the past two fiscal years, operating earnings were dampened due to elevated integration and transaction costs associated with the acquisition of Westpac Life-NZ- Limited (subsequently renamed to Fidelity Insurance Limited [Fidelity Insurance]).

However, AM Best expects operating performance metrics to improve prospectively, supported by scale efficiencies arising from the group’s increased operational size, as well as enhanced technological capabilities.

Fidelity Life Assurance ranks among the largest life insurance companies in New Zealand, recording significant premium growth following the acquisition of Fidelity Insurance in fiscal year 2022.

The insurance policies are distributed predominantly through financial advisers and Westpac New Zealand Limited’s banking network, with an exclusive 15-year distribution arrangement with the bank.

-- BERNAMA