Best Sees No Rating Change for NZ’s Tower from Dropping Bank Deal
A.M. Best Co. has commented that the financial strength rating (FSR) of ‘A-‘ (Excellent) and issuer credit ratings (ICR) of “a-” of new Zealand’s Tower Insurance Limited “remain unchanged as a result of the recent announcement of the discontinuance of distribution relationships between Tower Insurance and ANZ National Bank Limited. The outlook for both ratings is stable.”
Best noted that the “discontinuance of relationships with ANZ National Bank Limited will put in jeopardy approximately NZD 70 million (USD 50.2 million) in annual premium revenue (approximately 34 percent of total revenue).” However the rating agency also indicated that the “reduction in premiums written is expected to strengthen Tower Insurance’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio, although the loss of this portfolio could potentially lower Tower Insurance’s overall earnings.”
Source: A.M. Best – www.ambest.com
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