TOWER LIMITED CREDIT RATINGS AFFIRMED - AM BEST

KUALA LUMPUR, April 25 (Bernama) -- Global credit rating agency, AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of ‘a-’ (Excellent) of Tower Limited (Tower) New Zealand. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Tower’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 (ERM).

Tower’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which was at the strongest level at fiscal year-end 2021 (Sept 30, 2021) and is expected to remain at least at the very strong level over the medium term.

Whilst the company is expected to maintain an elevated dividend payout ratio, retained earnings are expected to be sufficient to support new business growth and sustain robust regulatory solvency coverage.

According to a statement, United States-headquartered AM Best views Tower as having strong financial flexibility, a prudent reinsurance programme and a conservative investment strategy, and assesses Tower’s operating performance as adequate.

Following the settlement of the majority of claims arising from the Canterbury Earthquake events, the company’s underwriting profits have improved notably over the past three fiscal years, with the combined ratio remaining below 95 per cent during this period.

Prospectively, AM Best expects Tower to report positive underwriting and operating results, supported by appropriate risk selection and pricing, as well as through anticipated expense efficiencies achieved by core system upgrades in recent years.

AM Best views Tower’s business profile as neutral. The company is a medium-sized non-life insurer that operates predominantly in New Zealand, with some operations based in the Pacific Islands. Tower has a market share of approximately five per cent in New Zealand’s general insurance market and reported gross written premium of NZD 405 million (US$280 million) in fiscal year 2021. (US$1 = RM4.332)

The company’s core product offerings are domestic home and motor insurance, typically distributed through direct channels and partnerships.

For more information, visit www.ambest.com.

-- BERNAMA