AM Best Confirms New Zealand Medical Indemnity Insurance Limited Credit Ratings


SINGAPORE–(BUSINESS WIRE)–AM Best affirmed the financial strength rating of B+ (good) and the long-term issuer credit rating of “bbb-” (good) of New Zealand Medical Indemnity Insurance Limited (NZMII) (New Zealand). The outlook for these Credit Ratings (ratings) is stable.

The ratings reflect NZMII’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The strength of NZMII’s balance sheet is based on its risk-adjusted capitalization, which is expected to remain at the highest level over the medium term, as measured by Best’s capital adequacy ratio (BCAR). Balance sheet strength factors partially offset the company’s limited financial flexibility and weak absolute capital base, which increases the sensitivity of capital adequacy to shock events.

AM Best also considers NZMII’s operating performance to be adequate, as evidenced by a five-year average return on equity ratio of 11.3% (fiscal years 2017-2021). After a period of adverse claims experience in fiscal years 2018 and 2019, NZMII’s underwriting performance has improved over the past two years due to corrective actions taken by management, including premium rate adjustments. In addition, technical performance improvements were partly driven by lower claims frequency due to COVID-19 related movement restrictions. Overall earnings are supported by NZMII’s strong investment income, with the company reporting a five-year average net return (including gains) of 5.2% (FY 2017-21).

AM Best views NZMII’s business profile as limited given its position as a small, niche insurer in New Zealand focused on providing medical indemnity insurance to doctors and healthcare professionals. The company’s claims consist largely of legal costs, excluding medical costs. As a single-line insurer operating in a single country, the company is considered to have limited geographic and product diversification. Access to new business is supported by its membership of the Association of Resident Doctors of New Zealand. In financial year 2021, NZMII changed its name from New Zealand Medical Professionals Limited.

NZMII’s ERM is considered appropriate given the size and complexity of its operations. The company has a moderate exposure to operational risks, as it has outsourced most of its operations to third-party service providers. However, the company’s management has taken appropriate measures to mitigate this risk, including the use of high quality suppliers and contractual arrangements to ensure continuity of services.

Ratings are communicated to rated entities before publication. Unless otherwise indicated, the ratings have not been changed as a result of this 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 relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Assessment Activity Web page. For more information on the use and limitations of credit rating opinions, please see Best Credit Score Guide. For more information on the proper use of Best’s Credit Ratings, Best’s Performance Ratings, Best’s Preliminary Credit Ratings, and AM Best’s press releases, please see Guide to Proper Use of Best’s Ratings and Reviews.

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

Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


About Author

Comments are closed.