NEW ZEALAND MEDICAL INDEMNITY INSURANCE LIMITED CREDIT RATINGS AFFIRMED - AM BEST

KUALA LUMPUR, April 4 (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 New Zealand Medical Indemnity Insurance Limited (NZMII) New Zealand, with the outlook of these Credit Ratings (ratings) described as stable.

The ratings reflect NZMII’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 (ERM).

NZMII’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which is expected to remain at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio (BCAR).

Partially offsetting balance sheet strength factors include the company’s limited financial flexibility and its small absolute capital base, which increases the sensitivity of capital adequacy to shock events.

According to a statement, United States-headquartered AM Best also views NZMII’s operating performance as adequate, as demonstrated by a five-year average return-on-equity ratio of 11.3 per cent (fiscal years 2017-2021).

Following a period of unfavourable claims experience in fiscal years 2018 and 2019, NZMII’s underwriting performance improved over the past two fiscal years as a result of remedial actions taken by management, including premium rate adjustments.

In addition, technical performance improvements were in part aided by lower claims frequency driven by COVID-19 related movement restrictions. Overall earnings are supported by NZMII’s robust investment income with the company having reported a five-year average net investment yield (including gains) of 5.2 per cent (fiscal year 2017-2021).

AM Best views NZMII’s business profile as limited given its position as a small and niche insurer in New Zealand focused on providing medical indemnity insurance to medical practitioners and health professionals, with the company’s claims largely comprising legal fees, excluding medical injury costs.

The company’s access to new business is supported by its affiliation with the New Zealand Resident Doctors’ Association. In fiscal year 2021, NZMII changed its name from New Zealand Medical Professionals Limited.

For more information, visit www.ambest.com.

-- BERNAMA