Press Release - MARCH 19, 2020

AM Best Affirms Credit Ratings of BNZ Life Insurance Limited

 Sin Yee Chuah
Financial Analyst
+65 6303 5022

Alex Rafferty, ACA
Associate Director, Analytics
+65 6303 5025

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 A (Excellent) and the Long-Term Issuer Credit Rating of “a” of BNZ Life Insurance Limited (BNZ Life) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect BNZ Life’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. In addition, the ratings factor in a neutral impact from the company’s ultimate ownership by National Australia Bank Limited (NAB).

BNZ Life’s balance sheet strength assessment is supported by its risk-adjusted capitalization, which remains at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and a highly liquid investment portfolio, with a focus on cash and high quality fixed income instruments. While the company has exhibited a high dividend payout ratio over the past five years, earnings retention has remained sufficient to support current business growth and maintain the strongest level of risk-adjusted capitalization. A partially offsetting balance sheet factor is the company’s modest absolute capital base, which AM Best views as a factor that increases BNZ Life’s potential sensitivity to shock events, as well as to future changes in performance and dividend payments.

BNZ Life has a track record of strong operating performance, demonstrated by a five-year average return-on-equity ratio of 29% (fiscal-years 2015-2019). The company’s favorable operating results have been driven by the strong underwriting performance of its in-force life business, reflecting favorable loss experience and a well-managed expense ratio, coupled with stable investment returns. Prospectively, AM Best expects a robust pricing strategy and steady revenue growth to support the maintenance of the strong operating performance assessment over the medium term.

BNZ Life is a small to medium-sized insurer in New Zealand’s life insurance industry, with a market share of approximately 5% based on 2019 gross written premiums, and AM Best views the company as having a neutral business profile. BNZ Life benefits from a strong distribution network driven by the bancassurance channel with an affiliated company, Bank of New Zealand Limited (BNZ), which also is owned ultimately by NAB. BNZ’s banking network, which includes branches nationwide across New Zealand, as well as the low distribution costs associated with this distribution channel, provides BNZ Life a key competitive advantage. AM Best expects the company to continue to leverage this competitive advantage to maintain its market share and position in New Zealand’s life insurance sector.

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 Guide to 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 credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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