SINGAPORE--(BUSINESS WIRE)--AM Best has commented that the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of The Hollard Insurance Company Pty Ltd (HIC) (Australia) remain unchanged following an announcement that its intermediate parent has successfully tendered to purchase the general insurance business, Commonwealth Insurance Limited, from Commonwealth Bank Ltd (CBA). The outlook of HIC’s Credit Ratings (ratings) is stable.
The transaction announced on 21 June 2021 involving Hollard Holdings Australia Pty Ltd (HHA), HIC’s intermediate parent, includes an exclusive 15-year strategic alliance between CBA and HHA to distribute home and motor products to CBA’s customers through the CBA brand. The transaction, which is subject to customary closing conditions, including regulatory and other approvals, is expected to complete in mid-calendar year 2022.
HIC’s insurance operations are currently not expected to be impacted by the aforementioned transaction at the intermediate parent level of HHA. Notwithstanding this, the rating fundamentals of HIC incorporate an assessment of HHA’s consolidated financial position. As such, AM Best will continue to monitor the progress of the transaction and consider any impact on the consolidated financial position of HHA, including as a result of the funding structure for the transaction.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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