The rating actions reflect significant improvement in Partners Life’s capital position, due to continued strong earnings and significant capital contribution. In addition, the NZD 200 million investment from the Blackstone Group has improved Partners Life’s financial flexibility.

Partners Life continues to maintain its status as New Zealand’s second-largest life insurer in terms of new business market share. Its continued growth is due to a number of competitive advantages, including a more-efficient cost structure, strong recognition within the financial adviser channel and expertise within its core business.

A major offsetting rating factor is the quality of capital, stemming from high reinsurance dependency as a result of utilizing reinsurance to manage its cash flow requirements. Furthermore, A.M. Best remains cautious of Partners Life’s inherent distribution concentration risk, since it relies on a limited number of dealer groups to generate a large portion of its new business premiums.

While Partners Life is well-positioned at its current rating level, the ratings could be downgraded if experience variations lead to a large impairment in net insurance contract assets. Additionally, the ratings may face pressure if Partners Life fails to generate capital on a timely basis to support its operating plan.

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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