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September 21, 2018 -Friday

 
  A.M. BEST ASSIGNS CREDIT RATINGS TO MOMENTUM LIFE LIMITED

Wednesday 14/03/2018



SINGAPORE, March 14 (Bernama-BUSINESS WIRE) -- A.M. Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb” to Momentum Life Limited (Momentum Life) (New Zealand). The outlook assigned to these Credit Ratings (ratings) is stable.

Momentum Life is a newly formed insurance operation in New Zealand. Its ultimate parent is BlueInc Group Pty Limited (BlueInc Group) (Australia), a financial services group specializing in direct life insurance distribution and administration in Australia and New Zealand.

The ratings reflect Momentum Life’s balance sheet strength, which A.M. Best categorizes as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

A.M. Best expects Momentum Life to maintain a level of on-balance sheet capital during its first five years of operations that is sufficient to support its projected business activities at all four Best’s Capital Adequacy Ratio (BCAR) confidence intervals. Although the company lacks a demonstrated track record of stability in BCAR scores, this uncertainty is mitigated partially by the company reinsuring a very high percentage of its risk premiums, holding a large amount of additional capital, and maintaining a low-risk, highly liquid asset structure.

After reviewing Momentum Life’s business plan, A.M. Best has assessed Momentum Life’s operating performance as adequate, supported by strong revenue growth, a variable cost structure and adequate pricing for its guaranteed acceptance funeral insurance cover and underwritten life insurance products. In addition, A.M. Best does not expect a high potential for volatility in Momentum Life’s prospective operating performance due to the company’s low product risk profile, as well as an administration agreement with an affiliate that reduces the risk of expense overruns.

Momentum Life will focus initially on low-risk products such as guaranteed acceptance funeral insurance coverage and underwritten lump-sum life insurance products. The company will start to offer higher-risk products, such as income protection covers, in the third year of insurance operations. Given the expected size and complexity of the company, A.M. Best considers Momentum Life’s ERM framework to be appropriate, and its risk management capabilities to be well-aligned with its risk profile.

While positive rating actions are unlikely in the medium term, the ratings could be downgraded if experience variations in premium revenue and expenses lead to a large operating loss. In addition, the ratings may face pressure if there is any significant deterioration in the financial condition of its ultimate parent, BlueInc Group.

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 © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

 
View source version on businesswire.com: http://www.businesswire.com/news/home/20180313006180/en/


Contact
A.M. Best
Jason Shum, +65 6303 5020
Associate Director, Analytics
jason.shum@ambest.com
or
Chi-Yeung Lok, +65 6303 5016
Director, Analytics
chi-yeung.lok@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

--BERNAMA 

 
 
 

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