Press Release - JANUARY 31, 2019

AM Best Affirms Credit Ratings of Pinnacle Life Limited

 Sin Yee Chuah
Associate Financial Analyst
+65 6303 5022

Myles Gould
Associate Director, Analytics
+65 6303 5020

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb+” of Pinnacle Life Limited (Pinnacle Life) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Pinnacle Life’s balance sheet strength, which AM Best categorizes as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

Pinnacle Life’s balance sheet strength is underpinned by its risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which is at the strongest level. Despite this, the company has a small absolute capital base, which increases its sensitivity to shock events, as well as to changes in future performance and intangible assets. AM Best also views the company as having a high reliance on third-party reinsurance and a thin regulatory solvency margin when compared with other New Zealand life insurers.

Pinnacle Life’s operating performance is viewed as adequate, with the company having generated a five-year average return on equity ratio of 7.5% (fiscal years 2014-2018). Overall earnings during this period have exhibited moderate volatility, driven mainly by discount rate movements impacting reported technical results. Prospectively, AM Best expects controlled underwriting growth and a robust pricing strategy to support the maintenance of adequate operating performance over the medium term.

AM Best views Pinnacle Life’s business profile as limited. The company is a small New Zealand lifeinsurer, with a market share that remains below 1% based on 2018 in-force and new business premiums. All of the company’s business originates from New Zealand, with its underwriting portfolio focused on mortality life products.

AM Best views Pinnacle Life’s ERM framework as developed and its approach to managing key risks as appropriate given the size and complexity of the company.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.

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AMB# Company Name
092782 Pinnacle Life Limited