Tower New Zealand has retained its A- rating for financial strength with AM Best, the same top mark it achieved with the credit agency last year. It has also maintained its long-term issuer credit rating of a-, with the outlook of both ratings stable.
The balance sheet assessment’s strength was attributed to its risk-adjusted capitalisation, which was at the strongest level at the fiscal year-end of 2022. The firm maintained robust regulatory solvency because of prudent capital management.
In a news release from AM Best, the credit agency said that it expects Tower NZ’s risk-adjusted capitalisation to remain at least at the very strong level over the medium term. Over the past five fiscal years, Tower was propped by a weighted average return-on-equity ratio of 4.2%, marked by operating earnings driven by technical performance with low and stable investment income.
AM Best noted that much like other New Zealand insurers, Tower faced the first six months of fiscal year 2023 with underwriting results impacted by several large weather events, including the Auckland floods and Cyclone Gabrielle. However, the credit agency said that the costs from these events were absorbed by XoL reinsurance treaty with no spill-over. As a result, AM Best said that it expects Tower to report positive underwriting and operating results over the medium term.
The insurer also recently released pet insurance data for 2022, revealing the most common breeds in Aotearoa, what tops the claims lists, and more.
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