AM BEST AFFIRMS FIDELITY LIFE ASSURANCE CREDIT RATINGS

KUALA LUMPUR, March 16 (Bernama) -- AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Fidelity Life Assurance Company Limited (Fidelity Life Assurance), New Zealand.

In a statement, AM Best said the Credit Ratings (ratings), which have a stable outlook reflected Fidelity Life Assurance’s balance sheet strength, which AM Best assessed 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 consolidated risk-adjusted capitalisation, which the credit rating agency expects to remain at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio.

Despite significant underwriting growth following the acquisition of Westpac Life-NZ- Limited (subsequently renamed Fidelity Insurance Limited [Fidelity Insurance]) from Westpac New Zealand Limited (WNZL) on Feb 28, 2022, AM Best expects the company’s consolidated regulatory solvency position to be maintained at an appropriate level, supported by a robust post-acquisition capital management strategy.

AM Best also viewed Fidelity Life Assurance as having good financial flexibility, supported by its two largest shareholders, NZ Superannuation Fund and Ngāi Tahu Holdings Corporation Limited. A partially offsetting balance sheet strength factor is Fidelity Life Assurance’s high reliance on third-party reinsurance.

It assessed Fidelity Life Assurance’s operating performance as adequate, with a five-year average return-on-equity ratio of 1.8 per cent (fiscal years 2018-2022). In fiscal year 2022, the company’s operating results were dampened by higher discount rates, as well as integration and transaction costs associated with the acquisition of Fidelity Insurance.

However, AM Best expects operating performance metrics to remain at an adequate level over the medium term, supported by scale efficiencies arising from the group's increased operational size, as well as technology capability.

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.

-- BERNAMA