Auckland-based DPL Insurance has received a credit ratings upgrade from AM Best, with its financial strength rating improving to B++ (good) from B+ (good), and its long-term issuer credit rating changing to “bbb” from “bbb-”. The outlook of these ratings has also been revised to stable from positive, according to a news release by AM Best.
The ratings reflect DPL’s balance sheet strength, as well as its adequate operating performance, limited business profile, and appropriate enterprise risk management, the ratings agency said. The ratings also factored in a neutral impact from the company’s ultimate ownership by Turners Automotive Group Limited (Turners), a motor vehicle retailer and financial services group in New Zealand.
Furthermore, DPL’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), continuously improved over the past three years, reaching its strongest level in fiscal years 2019 and 2020.
“AM Best expects that controlled growth, robust underwriting performance and appropriate retention of overall earnings will help DPL maintain its risk-adjusted capitalisation at the strongest level over the medium term,” the release said. “A partially offsetting balance sheet factor remains the significant volume of intangible assets from the company’s acquisition of Autosure’s business in 2017; this includes goodwill items relating to the brand name and acquired agency relationships.”
