Provident Insurance Corporation Limited Credit Ratings affirmed - AM Best

KUALA LUMPUR, Dec 17 -- AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of ‘bb+’ of Provident Insurance Corporation Limited (PICL) New Zealand.

In a statement, the global credit rating agency, AM Best said the outlook of these Credit Ratings (ratings) was stable.

The ratings reflect PICL’s balance sheet strength, which AM Best categorises as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

PICL’s balance sheet strength assessment reflects its risk-adjusted capitalisation, which was at the strong level as of fiscal year-end 2020, as measured by Best’s Capital Adequacy Ratio.

Due to elevated planned underwriting growth over the medium term, AM Best expects PICL’s prospective risk-adjusted capitalisation to weaken but remain at least at the adequate level, as the company executes its strategic plan.

Other balance sheet factors include the company’s conservative investment strategy, and its relatively small absolute capital base, which exposes its risk-adjusted capitalisation to potential volatility in stressed scenarios.

AM Best views PICL’s business profile as limited, given its relatively small scale of operations and limited geographical diversification, with all business emanating from New Zealand.

More details at www.ambest.com.

-- BERNAMA