SINGAPORE, Dec 16 (Bernama-BUSINESS WIRE) -- AM Best has removed from under review with positive implications and upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” (Excellent) from “a-” (Excellent) of Partners Life Limited (Partners Life) (New Zealand). The outlook assigned to these Credit Ratings (ratings) is stable.
These rating actions follow the acquisition of Partners Group Holdings Limited (PGHL), Partners Life’s parent, by Dai-ichi Life Holdings, Inc. (Dai-ichi group) [TSE: 8750] on 30 November 2022. This follows a previous announcement on 12 August 2022 that Dai-ichi group had entered into an agreement to buy 100% of PGHL’s shares for approximately NZD 1 billion.The ratings reflect Partners Life’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The rating upgrades factor in rating enhancement from Dai-ichi group following its acquisition of Partners Life. This reflects integration with and ownership by the Dai-ichi group, one of Japan’s largest life insurers. In addition, AM Best expects Dai-ichi group to provide capital support to Partners Life in the event that the company is unable to maintain an appropriate level of capital adequacy. While Partners Life accounts for a small component of Dai-ichi group’s overall revenues and earnings, the acquisition grows the group’s presence notably in New Zealand.
Partners Life’s balance sheet strength assessment 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). A partially offsetting balance sheet strength factor is the company’s reliance on third-party reinsurance for risk transfer and upfront commission financing.
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