Solvency Margin and Financial Strength Rating
As at 30 June 2020, our solvency as filed with the Reserve Bank of New Zealand is as follows:
- minimum solvency capital: $35.6 million;
- actual solvency capital: $136.1 million;
- solvency margin: $100.5 million; and
- solvency result: 382.5%.
By comparison, our solvency results filed with the Reserve Bank of New Zealand as at 30 June 2019 were as follows:
- minimum solvency capital: $37.1 million;
- actual solvency capital: $105.0 million;
- solvency margin: $67.9 million; and
- solvency result: 283.0%.
Financial Strength Rating
The Insurance (Prudential Supervision) Act 2010 requires licensed insurers to have a current financial strength rating that is given by an approved rating agency. AIG Insurance New Zealand Limited has an A (Strong) insurer financial strength rating given by Standard & Poor’s (Australia) Pty Ltd. The rating scale, in summary form is:
AAA | Extremely Strong | BBB | Good | CCC | Very Weak | SD | Selective Default |
AA | Very Strong | BB | Marginal | CC | Extremely Weak | D | Default |
A | Strong | B | Weak | R | Regulatory Action | NR | Not rated |
The rating from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. A full description of the rating scale is available on Standard & Poor’s website.