.jpg)
FMG Insurance has had its financial strength rating of A (Excellent) and its long-term issuer credit rating of “a” affirmed by rating agency AM Best. The outlook of these ratings is stable.
According to AM Best, the ratings reflect FMG Insurance’s very strong balance sheet strength, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
AM Best views the insurer as having a comprehensive reinsurance programme, which protects its earnings and balance sheet against very high severity catastrophe events in New Zealand, as well as a prudent capital management policy. A partially offsetting balance sheet factor is the company’s limited financial flexibility, driven by its 100% ownership by Farmers’ Mutual Group (FMG), a mutual organisation. It also views FMG Insurance’s business profile as neutral.
“The company continues to benefit from its position as a leading rural insurer in New Zealand, albeit occupying a relatively small overall market share of 5%, based on 2018 non-life gross written premiums,” the rating agency added. “Although the company only operates in New Zealand, its premium base is less geographically concentrated when compared with other domestic general insurers as its focus on the rural and provincial sector helps to spread its insured risks across the country.”
