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.