Partners Life gets a rating
New life insurance company Partners Life has received a rating from AM Best which assesses its financial strength and claims paying ability.
Tuesday, April 3rd 2012, 12:36PM 
3 Comments
Partners Life has received a "Secure" B++ rating from AM Best which indicates the company has a good ability to meet its on-going insurance obligations.
AM Best evaluate balance sheet strength based on BCAR (Best's Capital Adequacy Ratio) and review operating performance and business profile as leading indicators to the company's ability to preserve or generate new capital over time and therefore to future balance sheet strength.
BCAR measures adjusted surplus relative to the required capital necessary to support a company's operating and investment risks. The Life/Health BCAR guidelines on the AM Best website indicate a BCAR of 120% for B++ rating compared to 130% for A-and 145% for A.
Partners says that since the company is new the ratings agency requires additional rigor in certain areas and applies more stringent quantitative and qualitative metrics. In particular, risk adjusted capital levels need to be well above the levels expected of a comparable existing company.
"This means that for a given capital level an early stage company such as Partners Life will have a lower rating than a more established company," Partners Life managing director Naomi Ballantyne says.
Partners has raised $23 million in equity and is currently capitalised at a market value of $78 million, she says. Its shareholders include a number of institutions and the majority of management and staff.
Partners Life's solvency capital at March 31 was around $14 million, more than double the amount required for the company under the Reserve Bank's solvency standards.
Partners Life has a quota share treaty with SCOR Global SE, the world's fifth largest reassurer. Under this treaty the majority of Partners Life's claims risks (excluding medical) are reassured and the company receives reassurance commissions that offset its expenses, thus allowing it to grow without creating undue funding strain.
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Comments from our readers
Can't wait to see the new set of published accounts that have backed up this massive change since last year.
"Offsetting these positive rating factors are Partners Life's execution risk and uncertainty over the quality of its rapidly growing new book of business."
But surely a press release is evidence of adviser care, diligence and skill?
Yes, I can't wait to see how things develop over the next few years for ClubLife/ING Life/OnePath/Partners Life clients.
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