AM Best has reaffirmed the Financial Strength Rating of Partners Life Limited at an impressive A (Excellent), alongside a Long-Term Issuer Credit Rating also rated “a” (Excellent).
The outlook for both ratings remains stable.
Financial Strength and Performance
These ratings stem from Partners Life’s robust financial standing, classified by AM Best as very strong.
The company demonstrates adequate operational performance supported by a neutral business profile and sound enterprise risk management practices.
Moreover, its affiliation with Dai-ichi Life Holdings, Inc. (the Dai-ichi group) casts a positive light on the ratings.
The strength of Partners Life’s balance sheet is characterized by its strong risk-adjusted capitalisation, expected to maintain peak levels in the medium term as outlined by AM Best’s Capital Adequacy Ratio (BCAR).
The company is also praised for its financial flexibility and conservative approach to investments.
However, it does face challenges, such as reliance on third-party reinsurance for risk management and funding upfront commissions, which slightly temper its balance sheet strength.
While operating performance at Partners Life is recognized as adequate, it has a track record of generating positive earnings, largely attributable to a thriving in-force portfolio.
Over the past five years, the company has consistently secured favorable investment returns, thanks to its cautious investment strategies.
In the fiscal year 2024, Partners Life reported an operating loss, with a return-on-equity (ROE) of -2.0%, mainly due to struggles within the insurance service segment.
Despite some recent volatility in operating earnings, AM Best forecasts a stabilizing trend in performance metrics, leading to an adequate outlook for the medium term.
Market Position and Strategic Importance
As one of New Zealand’s leading life insurance providers, Partners Life primarily markets its offerings through a diverse network of independent financial advisers.
Additionally, it benefits from referrals originating from Bank of New Zealand clientele, bolstered by a decade-long exclusive agreement formed during the BNZ Life Insurance Limited acquisition.
The enhancement of its ratings can be attributed to its association with the Dai-ichi group, a major player in the Japanese life insurance sector.
AM Best anticipates that the Dai-ichi group will provide the necessary capital support to Partners Life in the event of any challenges in maintaining its capital levels.
While Partners Life represents a smaller segment of Dai-ichi’s overall earnings and revenue, it holds strategic significance in strengthening the group’s presence in the New Zealand market.
Conclusion and Further Information
Ratings information was shared with relevant parties prior to this announcement, and no changes have been made since then, except as explicitly noted.
For more details on this announcement and related disclosures, please visit AM Best’s website, where you can find additional information regarding these Credit Ratings.
Source: Ambest
