Suncorp adds light to Asteron's ratings
The backing of Asteron Life’s parent company is one of the factors underlying its latest rating from Standard & Poor's.
Friday, August 3rd 2012, 4:55PM
S&P has assigned its 'A+' financial strength and issuer credit ratings to Asteron Life and the outlook is stable.
"The ratings on Asterono reflect our opinion of the insurer's "core" status to the listed financial services group, Suncorp Group.
It says it has equalised Asteron's rating with those of the Suncorp.
Asteron's core status is based on S&P's view that its products, markets, and customers are closely aligned to the group's mainstream businesses; and that it is highly operationally integrated with other group entities.
"We also consider Asteron Life to be core while it demonstrates a sound operating performance and improvement consistent with group expectations, and is capitalised at a level at least commensurate with the group rating," S&P credit analyst Caroline Strahan says.
"For the company to retain its core status, we would need to see ongoing evidence of strong commitment at the group management level. A demonstration of this was the material capital injections provided to the company in 2012."
"We consider Asteron's stand-alone credit profile to be strong, based on its solid market presence in the New Zealand life market, very strong risk-based capital position, sound asset management and governance, and good liquidity position. Moderating aspects include its degree of leverage to movements in equity prices and interest rates, resulting in part from material exposures to participating life policies."
Asteron is sensitive to issues affecting the advisor channel--which comprise the majority of its sales--such as regulatory changes. Its historical operating performance has also been adversely affected by weaker returns on some legacy products and challenging market conditions.
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