Solvency Margin and Financial Strength Rating
As at 31 December 2020, our solvency as filed with the Reserve Bank of New Zealand is as follows:
- minimum solvency capital: $38.3 million;
- actual solvency capital: $132.5 million;
- solvency margin: $94.2 million; and
- solvency result: 346%.
By comparison, our solvency results filed with the Reserve Bank of New Zealand as at 31 December 2019 were as follows:
- minimum solvency capital: $35.9 million;
- actual solvency capital: $122.1 million;
- solvency margin: $86.2 million; and
- solvency result: 340%.
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.