Fidelity Life Assurance Secures Excellent Credit Ratings - AM Best

KUALA LUMPUR, March 7 (Bernama) -- Global credit rating agency, AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent) of New Zealand’s Fidelity Life Assurance Company Limited (Fidelity Life Assurance).

The outlook of these credit ratings (ratings) is stable, reflecting Fidelity Life Assurance’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 company’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which was at the strongest level as of fiscal year-end (June 30, 2024), as measured by Best’s Capital Adequacy Ratio.

It has a robust capital management strategy that supports a solid regulatory solvency position, as well as the maintenance of risk-adjusted capitalisation at the strongest level over the medium term.

Additionally, AM Best in a statement viewed Fidelity Life Assurance as having good financial flexibility, supported by its two largest shareholders, NZ Superannuation Fund and Ngāi Tahu Holdings Corporation Limited.

AM Best considers Fidelity Life Assurance's operating performance adequate, noting that the company has reported positive earnings over the last five years (fiscal years 2020-2024), despite elevated operating expenses from system infrastructure investment and the acquisition of Westpac Life-NZ-Limited (renamed to Fidelity Insurance Limited) in recent years.

In fiscal-year 2024, the company recorded a return-on-equity ratio of 5.9 per cent with a net investment yield of 5.6 per cent. AM Best anticipates that its operating performance metrics will remain supportive of the adequate assessment over the medium term.

Ranked among the largest life insurance companies in New Zealand, Fidelity Life Assurance’s product offerings include term life, disability income, trauma and total permanent disability insurance, with a legacy portfolio of investment-linked and traditional participating policies.

Its policies are primarily distributed through financial advisers and Westpac New Zealand Limited's banking network, with a 15-year exclusive distribution agreement with the bank.

-- BERNAMA