KUALA LUMPUR, Dec 20 -- AM Best has removed from under review with negative implications status of Provident Insurance Corporation Limited (PICL) New Zealand.
In a statement, AM Best has affirmed the Financial Strength Rating of B (fair) and the Long-Term Issuer Credit Rating of ‘bb+’ of PICL, making stable outlook on the ratings.
The ratings were placed under review with negative implications in July, which reflected uncertainty around the finalisation of PICL’s year-end March 2019 financial position.
These rating actions follow the conclusion of AM Best’s assessment of the company’s current and prospective financial position.
The ratings reflect PICL’s balance sheet strength, which AM Best classified as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
PICL’s balance sheet strength assessment reflects its risk-adjusted capitalisation, which weakened notably as of fiscal year-end 2019, as measured by Best’s Capital Adequacy Ratio.
Its operating performance has generally exhibited an improving trend since its inception in 2013, primarily driven by a favourable trend in the expense ratio due to growing economies of scale.
AM Best views PICL’s business profile as limited given its relatively small scale of operations, and limited product and geographic diversification in New Zealand.
The company is a niche insurer, with focus on mechanical breakdown insurance, distributed through motor dealerships across New Zealand.
-- BERNAMA
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