A.M. BEST DOWNGRADES CREDIT RATINGS OF CBL CORPORATION LIMITED AND CBL INSURANCE LIMITED; PLACES UNDER REVIEW WITH NEGATIVE IMPLICATIONS

SINGAPORE, Feb 7 (Bernama-BUSINESS WIRE) -- A.M. Best has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bb+” from “bbb-” of CBL Corporation Limited (CCL) (New Zealand). Concurrently, A.M. Best also has downgraded the Financial Strength Rating to B++ (Good) from A- (Excellent) and the Long-Term ICR to “bbb+” from “a-” of CBL Insurance Limited (CBL) (New Zealand). These Credit Ratings (ratings) have been placed under review with negative implications.

CCL is a listed company on the Australian Securities Exchange and the New Zealand Stock Exchange. The lead insurance subsidiary within this group is CBL, a non-life insurer that specializes in underwriting building- and construction-related credit and financial surety insurance, bonding and reinsurance.

The rating downgrades reflect the significant deterioration in CCL’s operating performance in fiscal year 2017, due primarily to a NZD 100 million reserve charge to strengthen reserves for CBL’s long-tail French construction insurance business. Management has proposed raising a substantial amount of capital, with details anticipated to be announced over the upcoming weeks, and this is expected to restore overall balance sheet strength to a level that supports the current ratings. In addition, A.M. Best will have further discussions with the company regarding its reserving practice, as well as the long-term profitability of CBL’s long-tail insurance products.

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