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For more than 30 years, Cabling Installation & Maintenance has provided useful, practical information to professionals responsible for the specification, design, installation and management of structured cabling systems serving enterprise, data center and other environments. These professionals are challenged to stay informed of constantly evolving standards, system-design and installation approaches, product and system capabilities, technologies, as well as applications that rely on high-performance structured cabling systems. Our editors synthesize these complex issues into multiple information products. This portfolio of information products provides concrete detail that improves the efficiency of day-to-day operations, and equips cabling professionals with the perspective that enables strategic planning for networks’ optimum long-term performance.

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AM Best Upgrades Credit Ratings of Provident Insurance Corporation Limited

AM Best has upgraded the Financial Strength Rating to B+ (Good) from B (Fair) and the Long-Term Issuer Credit Rating to “bbb-” (Good) from “bb+” (Fair) of Provident Insurance Corporation Limited (PICL) (New Zealand). The outlook of these Credit Rating (ratings) has been revised to stable from positive.

The ratings reflect PICL’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The rating upgrades reflect the material and sustained improvement in PICL’s risk-adjusted capitalisation over recent periods. The company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), was at the very strong level as of fiscal year-end 2024. Prospectively, AM Best expects PICL’s risk-adjusted capitalisation to remain at least at the strong level over the medium term, supported by its internal capital generation, which takes into account planned partial share redemption and its business growth targets. Other positive balance sheet strength factors include the company’s conservative investment strategy and robust regulatory solvency position. An offsetting balance sheet strength factor includes exposure to long-duration policies that increases reserving risk; however, PICL takes a prudent reserving approach and has a history of reserve adequacy.

AM Best views PICL’s operating performance as adequate. PICL’s operating performance continues to be supported by its positive underwriting performance and robust investment returns. The company recorded a return-on-equity ratio of 15.2% and a combined ratio (net/net, IFRS 17) of 96.9% in fiscal-year 2024, as calculated by AM Best. PICL has made significant investments in its information technology and pricing capabilities in recent periods to support its next phase of accelerated growth, which resulted in an elevated expense ratio in year-end 2024. Prospectively, the expense ratio is expected to normalise.

AM Best assesses PICL’s business profile as limited. This reflects the company’s relatively modest scale of operations and limited geographical diversification, with all business emanating from New Zealand. PICL is a niche insurer that focuses on mechanical breakdown insurance and private motor vehicle insurance, largely distributed through motor dealerships and distribution partners across its domestic market. PICL is exposed to a moderate level of pricing risk arising from its multi-year policies, largely its mechanical breakdown insurance.

AM Best assesses PICL’s ERM as appropriate, given the size and complexity of its operations. AM Best views the successful execution of the company’s growth plan to be an ongoing risk. To date, this risk has been mitigated through investments in internal capabilities and technology. Prospectively, AM Best expects PICL’s risk management capability to continue to develop and strengthen, supporting its increasing operational scale.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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