KUALA LUMPUR, Aug 20 (Bernama) -- The financial strength rating of B++ (good) and the long-term issuer credit rating of ‘bbb’ of The Education Benevolent Society Incorporated (EBS) New Zealand remains unchanged, according to A.M. Best.
This is according to an announcement that it plans to enter into an arrangement with Union Medical Benefits Society Limited (UniMed) New Zealand, under which UniMed will take over EBS’s insurance operations as of January 1, 2019.
EBS subscribers were notified of the planned in July 2018 and until the transaction is completed, A.M. Best expects EBS to continue to operate and service its policyholders in a business-as-usual manner, a statement said.
The transaction is expected to result in a portfolio transfer of EBS’s existing insurance obligations to UniMed as well as future medical insurance protection for EBS’s subscribers being underwritten by UniMed.
The transaction has received preliminary approval from each companies’ board of directors but it still remains subject to the finalisation of a mutually acceptable agreement which also requires approval by the Reserve Bank of New Zealand.
EBS has cited limited growth opportunities, the cost and risks associated with necessary technology investments and its high cost base as key drivers for the decision to change its business model. EBS will no longer operate as an insurance company after completion of the proposed transaction.
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. More details at www.ambest.com.
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