A.M. BEST ASSIGNS CREDIT RATINGS TO MOMENTUM LIFE LIMITED

SINGAPORE, March 14 (Bernama-BUSINESS WIRE) -- A.M. Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb” to Momentum Life Limited (Momentum Life) (New Zealand). The outlook assigned to these Credit Ratings (ratings) is stable. Momentum Life is a newly formed insurance operation in New Zealand. Its ultimate parent is BlueInc Group Pty Limited (BlueInc Group) (Australia), a financial services group specializing in direct life insurance distribution and administration in Australia and New Zealand. The ratings reflect Momentum Life’s balance sheet strength, which A.M. Best categorizes as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). A.M. Best expects Momentum Life to maintain a level of on-balance sheet capital during its first five years of operations that is sufficient to support its projected business activities at all four Best’s Capital Adequacy Ratio (BCAR) confidence intervals. Although the company lacks a demonstrated track record of stability in BCAR scores, this uncertainty is mitigated partially by the company reinsuring a very high percentage of its risk premiums, holding a large amount of additional capital, and maintaining a low-risk, highly liquid asset structure. After reviewing Momentum Life’s business plan, A.M. Best has assessed Momentum Life’s operating performance as adequate, supported by strong revenue growth, a variable cost structure and adequate pricing for its guaranteed acceptance funeral insurance cover and underwritten life insurance products. In addition, A.M. Best does not expect a high potential for volatility in Momentum Life’s prospective operating performance due to the company’s low product risk profile, as well as an administration agreement with an affiliate that reduces the risk of expense overruns. Momentum Life will focus initially on low-risk products such as guaranteed acceptance funeral insurance coverage and underwritten lump-sum life insurance products. The company will start to offer higher-risk products, such as income protection covers, in the third year of insurance operations. Given the expected size and complexity of the company, A.M. Best considers Momentum Life’s ERM framework to be appropriate, and its risk management capabilities to be well-aligned with its risk profile. http://mrem.bernama.com/viewsm.php?idm=31444