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AM Best Removes From Under Review With Positive Implications, Upgrades Long-Term Issuer Credit Rating of Cigna Life Insurance New Zealand Limited

SINGAPORE--(BUSINESS WIRE)--#insurance--AM Best has removed from under review with positive implications and upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to �a+� (Excellent) from �a� (Excellent) and affirmed the Financial Strength Rating of A (Excellent) of Cigna Life Insurance New Zealand Limited (CLINZ) (New Zealand). The outlook assigned to these Credit Ratings (ratings) is stable.

These rating actions follow the acquisition of CLINZ on 1 July 2022 by Chubb Limited (Chubb group) [NYSE:CB], one of the world�s largest property and casualty insurance groups. This follows a previous announcement on 7 October 2021 that Cigna Corporation [NYSE: CI] had entered into a definitive agreement to sell its life, accident and supplemental benefits businesses in several countries in the Asia-Pacific region, including CLINZ, to Chubb group.

The ratings reflect CLINZ�s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The upgrade of the Long-Term ICR factors increased rating enhancement from the Chubb group following the recent acquisition of CLINZ. This reflects integration with and ownership by the Chubb group and AM Best�s expectation that capital support for CLINZ will be forthcoming, if required. In addition, the Chubb group is expected to provide reinsurance protection to CLINZ. While CLINZ accounts for a small component of the Chubb group�s overall revenues and earnings, the acquisition is viewed to grow the group�s presence notably in New Zealand. CLINZ is expected to complete its transition to operate under the Chubb brand in the second half of 2022.

CLINZ�s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best�s Capital Adequacy Ratio (BCAR), which was at the strongest level as of fiscal year end 2021 and is expected to remain at this level over the medium term. This reflects the company�s moderate underwriting leverage and conservative investment allocation. In addition, the company�s local regulatory solvency position in New Zealand is expected to be maintained at an appropriate level, supported by its robust capital management strategy.

AM Best views CLINZ�s operating performance as adequate, with the company having generated a five-year average return-on-equity ratio of 6.7% (fiscal years 2017-2021). The company�s operating results have been driven by typically positive underwriting performance of its in-force life business, coupled with robust investment returns. Overall earnings during the past five years have exhibited moderate volatility, driven mainly by discount rate movements impacting reported technical results. Prospectively, AM Best expects steady revenue growth, a robust pricing strategy and planned expense improvements to sustain CLINZ�s adequate operating performance.

AM Best views CLINZ�s business profile as neutral. CLINZ ranks among the largest life insurance companies in New Zealand. The company�s product range includes term life, disability income, trauma and funeral insurance. CLINZ�s competitive advantage arises from its multi-channel distribution approach, particularly benefitting from a bancassurance distribution agreement with ANZ Bank New Zealand Limited and its adviser channel.

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

This press release relates to Credit Ratings that have been published on AM 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 see AM Best�s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best�s Credit Ratings. For information on the proper use of Best�s Credit Ratings, Best�s Performance Assessments, Best�s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best�s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright � 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

Sin Yee Chuah
Financial Analyst, CFA
+65 6303 5022
[email protected]

Myles Gould
Director, Analytics
+44 20 7397 0304
[email protected]

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
[email protected]

Jeff Mango
Managing Director,
Strategy & Communications
+1 908 439 2200, ext. 5204

[email protected]

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