Standard & Poor’s Ratings Services announced that it has affirmed its ‘AA’ counterparty credit and insurer financial strength ratings on IAG New Zealand Ltd. with a stable outlook.
“The rating affirmation takes into account the merger and integration of New Zealand Insurance Ltd. (NZI; AA-/Stable/–) operations within the IAG NZ group,” said S&P. It also “reflects IAG NZ’s leading market position in both New Zealand’s personal lines and commercial lines market following the Jan. 2, 2003, acquisition of NZI from Aviva PLC, very strong financial position, and strong underwriting performance.”
The strong ratings are also supported by the company’s membership of the Insurance Australia Group Ltd., formerly NRMA Insurance Group Ltd., whose major subsidiary is NRMA Insurance, Australia’s largest automobile insurer, which also carries a ‘AA’ rating.
The announcement noted that “Although IAG NZ has been the underwriting entity for the State and Circle general insurance brands, from July 1, 2003, it will also be the underwriting entity for the NZI business, currently written separately in the NZI subsidiary.” New Zealand’s High Court has approved an arrangement for IAG NZ to take over NZI and to transfer its customers to the higher rated company. All NZI customers will effectively be transferred to IAG NZ on July 1, 2003, and claims will be reserved for, and managed and paid by IAG NZ.
“The ratings on NZI will be raised and equalized at ‘AA’ on July 1, 2003, to reflect the policyholder security of the wider IAG NZ, and then immediately withdrawn as the company becomes nonoperating and its policyholders transferred to IAG NZ,” stated S&P credit analyst Michael Vine, Financial Services Ratings.