AM Best has removed from under review with positive implications and upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a+” (Excellent) from “a” (Excellent) and affirmed the Financial Strength Rating of A (Excellent) of
These rating actions follow the acquisition of CLINZ on
The ratings reflect CLINZ’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The upgrade of the Long-Term ICR factors increased rating enhancement from the Chubb group following the recent acquisition of CLINZ. This reflects integration with and ownership by the Chubb group and AM Best’s expectation that capital support for CLINZ will be forthcoming, if required. In addition, the Chubb group is expected to provide reinsurance protection to CLINZ. While CLINZ accounts for a small component of the Chubb group’s overall revenues and earnings, the acquisition is viewed to grow the group’s presence notably in
CLINZ’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which was at the strongest level as of fiscal year end 2021 and is expected to remain at this level over the medium term. This reflects the company’s moderate underwriting leverage and conservative investment allocation. In addition, the company’s local regulatory solvency position in
AM Best views CLINZ’s operating performance as adequate, with the company having generated a five-year average return-on-equity ratio of 6.7% (fiscal years 2017-2021). The company’s operating results have been driven by typically positive underwriting performance of its in-force life business, coupled with robust investment returns. Overall earnings during the past five years have exhibited moderate volatility, driven mainly by discount rate movements impacting reported technical results. Prospectively, AM Best expects steady revenue growth, a robust pricing strategy and planned expense improvements to sustain CLINZ’s adequate operating performance.
AM Best views CLINZ’s business profile as neutral. CLINZ ranks among the largest life insurance companies in
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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Source: AM Best