The ratings reflect FLNZ’s strong risk-adjusted capitalization, consistently positive operating performance, high quality investment assets and adequate liquidity to meet its expected claims and expenses. Moreover, a significant buffer in the form of excess assets over guaranteed liabilities is available to absorb potential unfavorable experiences through adjusting future bonus declarations of its participating policies.

Partially offsetting rating factors include the run-off nature of its business profile and the expected dividend payments to its holding company, which limits organic capital growth.

The negative outlook reflects A.M. Best’s concern over the credit profile of FLNZ’s immediate holding company, Foundation Life (NZ) Holdings Limited (FLNZH), in the medium to long term.

While positive rating actions are unlikely, significant deterioration in risk-adjusted capitalization due to higher-than-expected dividend payouts or adverse experience could result in a negative rating action. In addition, an unfavorable view of FLNZH’s capital structure could lead to a downgrade of FLNZ’s ratings.
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 rating(s) that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page.

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