Accuro switches rating agencies
Health insurer Accuro has dumped Standard and Poors' as its rating agency and instead gone with AM Best.
Friday, June 6th 2014, 6:57AM
AM Best has given the company a B (Stable) rating which it says “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 the company moved to AM Best "because they are the specialist insurance rating agency most closely engaged in the New Zealand health insurance industry.”
The rating is technically given to Health Service Welfare Society Limited (New Zealand), which is the legal name of the business. While the is B (Fair) its issuer credit rating is "bb+" and the outlook assigned to both ratings is stable.
AM Best says that partially offsetting the positive factors are Accuro's high underwriting leverage and less favorable 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 favorable 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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