KUALA LUMPUR, March 12 (Bernama) -- A.M. Best has removed from under
review with negative implications and affirmed the financial strength
rating of A- (excellent) and the long-term issuer credit rating
(long-term ICR) of 'a-' of TOWER Insurance Ltd (TIL) New Zealand.
Concurrently, A.M. Best has removed from under review with negative
implications and affirmed the long-term ICR of 'bbb-' of TIL's ultimate
parent, TOWER Ltd (TL) New Zealand.
The outlook assigned to these ratings is stable.
The ratings reflect TIL's balance sheet strength, which A.M. Best
categorised as very strong, as well as its adequate operating
performance, neutral business profile and appropriate enterprise risk
management.
On Aug 16, 2017, A.M. Best placed the ratings of TIL and TL under
review with negative implications due to the group's relatively weak
balance sheet strength for the rating levels.
At that time, the group's balance sheet was very susceptible to the
reserve risks in relation to the open claims for the Canterbury
earthquakes and the dispute over an adverse development cover with Peak
Re related to the February 2011 earthquake.
Since then, the group has completed a capital raise of approximately
NZ$65.3 million (US$47.77 million) and has recently entered into a
settlement agreement with Peak Re.
As a medium-sized local insurer, TIL holds an overall market share of
less than five per cent in New Zealand, with its core product offerings
being home and motor insurance, with a significant portion of the
company's business sourced from direct marketing and partnerships.
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