KUALA LUMPUR, March 18 (Bernama) -- Global credit rating agency, AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of ‘bbb’ (Good) of Momentum Life Limited (Momentum Life) New Zealand.
According to a statement, the outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Momentum Life’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
In addition, the ratings factor in no rating lift or drag from the company’s 100 per cent ownership by BlueInc Group Pty Limited.
AM Best expects Momentum Life’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), to remain at the strongest level over the medium term.
Despite forecast underwriting growth driving increased capital requirements, AM Best expects available capital to remain sufficient to support this planned business expansion over the medium term.
Partially offsetting balance sheet factors include Momentum Life’s small absolute capital base, which increases its sensitivity to stress scenarios, as well as its high reliance on third-party reinsurance for risk transfer and upfront commission financing.
AM Best considers Momentum Life’s operating performance to be adequate. The company has reported operating profits over the past three fiscal years, with an average return-on-equity ratio of approximately 11 per cent over this period.
AM Best views Momentum Life’s business profile as limited, reflecting the company’s small scale as a start-up insurer and its concentration of business in New Zealand’s life insurance sector.
The products offered by Momentum Life include guaranteed acceptance funeral insurance and lump-sum life insurance products, which have a low risk profile. Momentum Life benefits from good control over its underwriting and sales practices, with all products distributed through its wholly owned subsidiary.
More details at www.ambest.com.
-- BERNAMA
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