AM BEST AFFIRMS CREDIT RATINGS OF FIDELITY LIFE ASSURANCE COMPANY LIMITED

SINGAPORE, March 16 (Bernama-BUSINESS WIRE) -- AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Fidelity Life Assurance Company Limited (Fidelity Life Assurance) (New Zealand). The outlook of these Credit Ratings (ratings) is stable. The ratings reflect Fidelity Life Assurance’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. Fidelity Life Assurance’s balance sheet strength assessment is underpinned by its consolidated risk-adjusted capitalisation, which AM Best expects to remain at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio (BCAR). Despite significant underwriting growth following the acquisition of Westpac Life-NZ- Limited (subsequently renamed to Fidelity Insurance Limited [Fidelity Insurance]) from Westpac New Zealand Limited (WNZL) on 28 February 2022, AM Best expects the company’s consolidated regulatory solvency position to be maintained at an appropriate level, supported by a robust post-acquisition capital management strategy. AM Best also views Fidelity Life Assurance as having good financial flexibility, supported by its two largest shareholders, NZ Superannuation Fund and Ngāi Tahu Holdings Corporation Limited. A partially offsetting balance sheet strength factor is Fidelity Life Assurance’s high reliance on third-party reinsurance. AM Best assesses Fidelity Life Assurance’s operating performance as adequate, with a five-year average return-on-equity ratio of 1.8% (fiscal years 2018-2022). In fiscal year 2022, the company’s operating results were dampened by higher discount rates, as well as integration and transaction costs associated with the acquisition of Fidelity Insurance. However, AM Best expects operating performance metrics to remain at an adequate level over the medium term, supported by scale efficiencies arising from the group's increased operational size, as well as technology capability. Fidelity Life Assurance ranks among the largest life insurance companies in New Zealand, recording significant premium growth following the acquisition of Fidelity Insurance in fiscal year 2022. AM Best views the establishment of an exclusive 15-year bancassurance distribution arrangement with WNZL to have diversified Fidelity group’s distribution capabilities, previously concentrated on the capital-intensive financial adviser channel. 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 AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments. AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com. Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED. View source version on businesswire.com: https://www.businesswire.com/news/home/20230315005619/en/ Contact Yi Ding Senior Financial Analyst +65 6305 5021 yi.ding@ambest.com Michael Dunckley Director, Analytics +65 6303 5020 michael.dunckley@ambest.com Christopher Sharkey Manager, Public Relations +1 908 439 2200, ext. 5159 christopher.sharkey@ambest.com Al Slavin Senior Public Relations Specialist +1 908 439 2200, ext. 5098 al.slavin@ambest.com