AM Best Affirms Excellent Credit Ratings Of New Zealand's Tower 

KUALA LUMPUR, April 27 (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 Tower Limited (Tower), with a stable outlook.

In a statement, AM Best said the credit ratings (ratings) reflect Tower’s balance sheet strength, which was assessed as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

Tower’s balance sheet strength is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, which was at the strongest level at fiscal year-end 2025 (Sept 30, 2025).

AM Best expects capitalisation to remain at least very strong over the medium term, supported by earnings retention, solid financial flexibility, a prudent reinsurance programme, and a conservative investment strategy.

The insurer’s operating performance is assessed as adequate, reflecting a history of earnings volatility linked to catastrophe events. In FY2025, Tower reported a return-on-equity ratio of 23.5 per cent and a net/net combined ratio of 81.4 per cent, driven by technical performance and investment income.

The credit rating agency expects continued positive operating results supported by disciplined underwriting, pricing adequacy, and investment returns.

Tower holds a solid position in its core New Zealand insurance segments, despite a modest overall non-life market share of around five per cent. Its product portfolio is concentrated in domestic property and motor insurance.

AM Best assesses Tower’s ERM as appropriate, noting an increased focus on regulatory compliance amid recent regulatory developments in New Zealand. Following a self-reported issue, the Financial Markets Authority conducted an investigation that identified historical misleading representations resulting in a penalty payment.

The company is undertaking customer remediation and strengthening internal controls as part of its ongoing governance improvements.

-- BERNAMA