AM Best Upgrades New Zealand’s Beneficial Insurance Issuer Credit Rating

KUALA LUMPUR, Sept 19 (Bernama) -- AM Best has upgraded New Zealand’s Beneficial Insurance Limited (Beneficial) long-term issuer credit rating (Long-Term ICR) to “bbb+” (Good) from “bbb” (Good) and affirmed the financial strength rating (FSR) of B++ (Good).

In a statement, the global credit rating agency said the outlook for the Long-Term ICR has been revised to stable from positive, while the outlook for the FSR remains stable.

The credit ratings (ratings) reflect Beneficial’s adequate balance sheet strength, strong operating performance, limited business profile and appropriate enterprise risk management.

The upgrade is attributed to sustained improvements in the company’s balance sheet fundamentals, supported by robust internal capital generation and prudent earnings retention. 

Beneficial’s risk-adjusted capitalisation, measured by Best’s Capital Adequacy Ratio, has consistently remained at the strongest level and is expected to be maintained in the medium term.

This is underpinned by conservative investment strategies, prudent capital management and moderate underwriting leverage. However, AM Best noted that Beneficial’s relatively small capital base makes it susceptible to volatility in stress scenarios and possible negative deviations in operating performance.

The company’s operating performance is assessed as strong, with consistent profitability driven by its core pet insurance portfolio. In fiscal year 2025, Beneficial reported a combined ratio of 71.1 per cent and a return on equity of 33.3 per cent.

Investment income also contributed positively, recording a net yield of 6.3 per cent. AM Best expects the insurer to sustain strong results supported by robust underwriting and steady investment income.

Beneficial’s business profile remains limited due to its small-scale operations and narrow product and geographic diversification. It is regarded as a niche insurer with a solid presence in New Zealand’s pet insurance sector, though its overall market share in the domestic general insurance industry is relatively small.

The company’s product risk profile is low, as pet insurance is generally less exposed to large losses and catastrophe events.

-- BERNAMA