NZ Insurers' Financial Strength Ratings Remain Elusive for Brokers
New Zealand insurance brokers face challenges when comparing financial strength ratings from different agencies, according to a recent report by MoneyHub. The Reserve Bank of New Zealand requires licensed insurers to hold a current financial strength rating given by an approved rating agency, but the three agencies use different scales.
A.M. Best's 'A (Excellent)' and S&P's 'A (Strong)' sit in similar territory, while 'B+' means Good on A.M. Best's scale but a 'B' from S&P means Weak. This can cause confusion for brokers presenting competing quotes to clients.
MoneyHub founder Christopher Walsh noted that the AMI Insurance collapse after the Christchurch earthquakes showed New Zealanders that insurers don't have unlimited resources, highlighting the importance of financial strength ratings in measuring an insurer's ability to pay claims when it counts.