AM Best Confirms Consumer Insurance Services Limited Credit Ratings – InsuranceNewsNet


SINGAPORE–(BUSINESS WIRE)–
AM Best affirmed the financial strength rating of B+ (good) and the issuer’s long-term credit rating of “bbb-” (good) from Limited Consumer Insurance Services (ICFTU) (New Zealand). The outlook for these Credit Ratings (ratings) is stable.

The ratings reflect CISL’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, very limited business profile and adequate enterprise risk management (ERM). The ratings also take into account a neutral impact of the ultimate ownership of the company by humm group limited.

The company’s insurance business is currently in liquidation. In the fourth quarter of 2021, CISL communicated to its policyholders, informing them of the company’s decision to terminate all remaining card reimbursement insurance policies of July 1, 2022. However, to support policyholders, it will continue to pay eligible claims occurring up to and including December 31, 2022. Subsequently, CISL aims to relinquish its insurance license in early 2023.

The strength of CISL’s balance sheet is underpinned by its risk-adjusted capitalization, which remains at the highest level, as measured by the Best’s Capital Adequacy Ratio (BCAR). Despite the company’s run-off status, AM Best expects the company to maintain its local regulatory solvency position at an appropriate level until it relinquishes its insurance license. In addition, the company’s investment strategy is expected to remain conservative, with invested assets consisting solely of cash and short-term deposits.

AM Best considers CISL’s operational performance to be adequate. The company reported a five-year average return on equity ratio of 34% (fiscal years 2017 to 2021), but with a moderate level of volatility over this period. Following the cancellation of all remaining insurance policies, CISL will cease to receive premium income, with short-term operating results expected to be driven by investment income, claims settlements and operating expenses .

AM Best considers CISL’s business profile to be very limited. The company is currently in run-off, having stopped writing new business from November 2018 and business renewal April 2019. AM Best considers CISL’s ERM framework to be appropriate given the current size and complexity of its operations. AM Best continues to monitor the impact of potential regulatory challenges with respect to conduct and culture review by New Zealand regulators, as any resulting increase in regulatory or operational risk could result in a mismatch between CISL’s risk management profile and capability.

Ratings are communicated to rated entities before publication. Unless otherwise indicated, the ratings have not been changed as a result of this communication.

This press release relates to credit ratings that have been published on AM Best’s website. For all rating information relating to the release and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Assessment Activity Web page. For more information on the use and limitations of credit rating opinions, please see Best Credit Score Guide. For more information on the proper use of Best’s Credit Ratings, Best’s Performance Ratings, Best’s Preliminary Credit Ratings, and AM Best’s press releases, please see Guide to Proper Use of Best’s Ratings and Reviews.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Based at United Statesthe company does business in more than 100 countries with regional offices in London, amsterdam, dubai, hong kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Yi Ding

Senior Financial Analyst

+65 6303 5021

[email protected]

Myles Gould
Director, Analytics

+44 207 397 0304

[email protected]

Christopher Sharkey
Manager, Public Relations

+1 908 439 2200 ext. 5159

[email protected]

Jeff Mango
General director,

Communications Strategy

+1 908 439 2200 ext. 5204

[email protected]

Source: AM Best

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