SINGAPORE, July 28 (Bernama-BUSINESS WIRE) -- A.M. Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” of Provident Insurance Corporation Limited (PICL) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.
 
The ratings reflect PICL’s adequate risk-adjusted capitalization, prudent reserving and conservative investment portfolio. Moreover, despite the company’s start-up nature, its operating performance and claims experience during its first four years of operations have been largely consistent with initial projections.
 
Partially offsetting these positive rating factors are the company’s increasing underwriting leverage and a high expense ratio. Due to the delayed premium recognition of its core motor warranty products, growth in earned premium and underwriting profits tend to lag behind growth in incurred expenses. Hence, increased underwriting leverage from above-target premium growth over the short term could result in additional pressure on the company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR).
 
While positive rating actions are unlikely in the near term, negative rating actions may occur if there is significant deterioration in the company’s risk-adjusted capitalization or material deviation from the company’s planned underwriting
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. 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
Larina Huang, +65-6589-8400, ext. 218
Associate Financial Analyst
larina.huang@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/20170727005843/en
 
--BERNAMA