SINGAPORE, June 28 (Bernama-BUSINESS WIRE) -- A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Union Medical Benefits Society Limited (UniMed) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.
 
The ratings reflect UniMed’s strong risk-adjusted capitalization and favorable operating performance over the past five years. UniMed’s strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is due to its low underwriting leverage, high capital quality and favorable liquidity position. In addition, the company has a good performance track record, with an average operating ratio of approximately 89% over the past five years. It has a competitive expense ratio of 11% due to its distribution model, which relies more on the direct channel with lower acquisition expenses than on intermediaries, as well as lower administrative costs for group business.
 
An offsetting rating factor is the company’s premium concentration risk among a few large group accounts. This could make the company’s underwriting performance relatively more vulnerable to competitive pressure.
 
While positive rating actions are unlikely, negative rating actions may occur if there is a major underwriting deficit or significant deterioration in risk-adjusted capitalization.
 
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. For information on the proper media use of Best’s Credit Ratings and
A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
 
A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
 
Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
 
Contacts
A.M. Best
Sin Yee Chuah, +65 6589 8400, ext. 219
Associate Financial Analyst
sinyee.chuah@ambest.com
or
Jason Shum, +65 6589 8400, ext. 217
Senior Financial Analyst
jason.shum@ambest.com
or
Christopher Sharkey, +1 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1 908 439 2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com


Source: A.M. Best
 
View this news release online at:
http://www.businesswire.com/news/home/20170623005396/en
 
--BERNAMA