SINGAPORE--(BUSINESS WIRE)--Jun 14, 2018--A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Union Medical Benefits Society Limited (UniMed) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect UniMed’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

UniMed’s balance sheet strength is supported by its solid risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). In addition, the company has low underwriting leverage and a favorable liquidity position.

UniMed has a track record of favorable earnings, with a five-year average operating ratio of approximately 90%. The company has a competitive expense ratio of 13% due to its distribution model, which relies more on the direct channel with lower acquisition expenses than on intermediaries, as well as lower administrative costs for group business. A.M. Best expects the company to continue delivering favorable earnings with moderate volatility, supported by steady revenue growth, adequate product pricing and investment income.

UniMed is a non-profit organization that provides health insurance in group and retail markets. The company is a medium-size insurer in the New Zealand health insurance industry, with a market share of less than 5% based on in-force premiums. The mono-line insurer has premium concentration risk among a few large group accounts. This could make the company’s underwriting performance relatively more vulnerable to competitive pressure.

UniMed has a developed risk management program based on its current size and complexity. The company has demonstrated an overall satisfactory ability to address most of its risks, primarily through adequate pricing. Therefore, A.M. Best considers UniMed’s risk management capabilities to be aligned appropriately with its risk profile.

UniMed is well-positioned for its current rating level. Negative rating actions may occur if there is a major underwriting deficit or significant deterioration in risk-adjusted capitalization.

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 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 see A.M. Best’s web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view .

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

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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CONTACT: A.M. Best

Sin Yee Chuah, +65 6303 5022

Associate Financial Analyst

sinyee.chuah@ambest.com

or

Chi-Yeung Lok, +65 6303 5018

Director, Analytics

chi-yeung.lok@ambest.com

or

Christopher Sharkey, +1 908-439-2200, ext. 5159

Manager, Public Relations

christopher.sharkey@ambest.com

or

Jim Peavy, +1 908-439-2200, ext. 5644

Director, Public Relations

james.peavy@ambest.com

KEYWORD: EUROPE ASIA PACIFIC SINGAPORE

INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE

SOURCE: A.M. Best

Copyright Business Wire 2018.

PUB: 06/14/2018 10:40 AM/DISC: 06/14/2018 10:40 AM

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