AM Best say the rating “reflects Accuro’s good business profile in the retail medical insurance sector of New Zealand, favourable growth and experience of its on sale products”.
Accuro chief executive Geoff Annals says they dumped Standard and Poors, which gave the company a BB+ rating, and went to AM Best “because they are the specialist insurance rating agency most closely engaged in the New Zealand health insurance industry.”
“We look forward to working with AM Best and the rating shows the success we are having with our business model. The stable outlook reflects Accuro’s continued and steady growth over the past five years.”
The full ratings details are that AM Best has assigned a financial strength rating of B (Fair) and issuer credit rating of "bb+" to Health Service Welfare Society Limited (which is the legal name for Accuro Health Insurance.
The ratings reflect Accuro's good business profile in the retail medical insurance sector of New Zealand, favourable growth and experience of its on-sale products, as well as its low investment risk profile.
Partially offsetting these positive factors are the high underwriting leverage and less favourable experience of its legacy products.
Accuro's premium earned was in excess of four-time surplus, which makes capitalisation very sensitive to higher-than-expected claim severity or frequency. Despite the favourable experience of its on-sale products, the company's legacy products, which represented over half of overall premium earned, consistently reported high claim ratios.
An upgrading of the company's ratings is unlikely in the short to medium term until it can demonstrate a solid track record of positive underwriting results. Meanwhile, any significant adverse changes to its industry environment or continued underwriting losses could lead to a downgrading of its ratings.
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