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BNZ Life Insurance has had its financial strength rating of “A” (Excellent) and its long-term issuer credit rating of “a” affirmed by ratings agency AM Best. The outlook of these ratings is stable.
According to AM Best, the ratings reflect BNZ Life’s very strong balance sheet strength, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM). In addition, the ratings factor in a neutral impact from the company’s ultimate ownership by National Australia Bank (NAB).
“While the company has exhibited a high dividend payout ratio over the past five years, earnings retention remained sufficient to support new business growth and maintain the strongest level of risk-adjusted capitalisation,” the agency said. “A partially offsetting balance sheet factor is the company’s modest absolute capital base, which AM Best views as a factor that increases its sensitivity to shock events, as well as to changes in future performance and dividend payments.”
AM Best expects the insurer to have a robust pricing strategy and steady revenue growth to support the maintenance of the strong operating performance. It views BNZ Life’s strong distribution network driven by the bancassurance channel with an affiliated company, Bank of New Zealand (BNZ) as a key competitive advantage. Additionally, it also considers the BNZ Life to benefit from a level of risk management oversight and governance from the NAB group.
