Royal & SunAlliance New Zealand chief executive Alan Bradley has played down a media report that the insurer’s British parent is operating close to regulatory solvency limits.
London’s Sunday Telegraph last month quoted an insurance analyst as saying RSA's UK solvency position was "strongly negative".
The comments came after Britain’s Financial Services Authority (FSA) relaxed a test for solvency in the wake of the world share market dive post September 11.
However, the FSA emphasised that negative solvency in life insurance terms was not the same as being insolvent in ordinary corporate terms.
An insurer could be near the edge of its solvency margin but not be in danger of going bust.
RSA chief actuary Mike Kipling told the Telegraph that the insurer was meeting its regulatory solvency margin.
Bradley says the RSA group is a well-established company and its chief actuary would not make such comments unless he meant them.
In addition, the New Zealand subsidiary’s investments are in a statutory fund.
It also adheres to prudential reserving guidelines set by the NZ Society of Actuaries.
"Our New Zealand business is well capitalised," he says.
"We’ve had a look at the solvency of our life business since the September 11 events and it’s basically the same as it was at the end of December last year.
"I was very pleasantly surprised, because it wouldn’t have been a tremendous shock if there had been a dip, given the huge impact on world equity markets," Bradley says.
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