The ratings reflect BNZ Life’s very strong risk-adjusted capitalization and operating performance. In addition, the company has a good profile with competitive advantages in its distribution channel. As an affiliated company of Bank of New Zealand Limited, BNZ Life has low distribution costs and benefits from a banking network with branches nationwide.

A.M. Best expects BNZ Life’s risk-adjusted capitalization to be maintained at a strong level and to remain supportive of the current ratings, despite a high dividend payout ratio. This is underpinned by a relatively low premium growth rate, robust earnings derived from in-force business and stable investment returns. BNZ Life’s operating performance is strong as demonstrated by a five-year average return on equity of approximately 32%.

While BNZ Life is well-positioned at its current ratings level, downward rating pressure could occur if capitalization erodes significantly below its target surplus capital due to factors such as higher-than-expected dividend payouts or material deterioration in operating performance.

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 Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.

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