Rating agency gives Partners the tick; Here's what it said

The company's financial strength rating has been continued at the A- (Excellent) level. The outlook of these ratings is stable.

Partners Life’s balance sheet strength assessment is supported by its risk-adjusted capitalisation, which is expected to remain at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best also views Partners Life as having strong financial flexibility, as demonstrated by a track record of capital contributions from shareholders to support planned new business growth. Partners Life’s regulatory solvency has demonstrated some sensitivity to growth initiatives over recent years; however, AM Best expects prospective regulatory solvency to remain at a robust level over the medium term, supported by timely capital support from shareholders and full earnings retention. A partially offsetting balance sheet factor remains the company’s high reliance on reinsurance for risk transfer and upfront commission financing.

Partners Life has a track record of adequate operating performance, with a five-year average return-on-equity ratio of 10.6% (fiscal-years 2015-2019). The company’s positive operating results have been driven by the favourable underwriting performance of its in-force life business, coupled with robust investment returns.

Nonetheless, operating profitability remains sensitive to prevailing market conditions in New Zealand, which have caused some volatility in claims experience in recent periods. Prospectively, AM Best expects controlled underwriting growth and robust pricing strategies to support the maintenance of Partners Life’s adequate operating performance.