A.M. Best Affirms Ratings of Youi NZ Pty Limited

SINGAPORE--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb” of Youi NZ Pty Limited (Youi NZ) (New Zealand). The outlook for both ratings remains stable.

Youi NZ is a startup non-life insurer that commenced underwriting New Zealand risks in July 2014. The company is wholly owned by Youi Holdings Pty Ltd (Australia), which in turn is controlled by OUTsurance Holdings Limited (South Africa).

The ratings of Youi NZ are based on its favorable risk-adjusted capitalization and sound operating controls.

Youi NZ is expected to maintain favorable risk-adjusted capitalization throughout its first five-years of operation, benefitting from low underwriting leverage and a strong reinsurance panel to support the capital requirement for premium written. Despite its start-up nature, as an extension of an existing Australian operation, adequate risk management processes, infrastructure, and operating controls are in place to support the company’s strategic initiatives in New Zealand.

Partially offsetting these positive rating factors are the challenges in executing its business plan. Despite a prudent reinsurance program that helps reduce the company’s capital requirement and claim-related volatility, Youi NZ’s financial condition is relatively sensitive to the cost of reinsurance and whether the expense ratio can remain in line with budgeted costs.

Factors that may trigger negative rating actions include a material adverse deviation of its risk-adjusted capital relative to its business plan due to a failure to meet its planned underwriting and investment performance.

Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150728006101/en/

A.M. Best
Jason Shum
Financial Analyst
+65 6589 8400, ext. 217
[email protected]
or
Chi-Yeung Lok
Senior Financial Analyst
+65 6589 8400, ext. 211
[email protected]
or
Christopher Sharkey
Manager, Public Relations
+(1) 908 439 2200, ext. 5159
[email protected]
or
Jim Peavy
Assistant Vice President, Public Relations
+(1) 908 439 2200, ext. 5644
[email protected]

Source: A.M. Best

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