Credit rating agency AM Best has announced two significant moves involving New Zealand insurers this week: the withdrawal of Foundation Life (NZ) Limited’s ratings following its policy cancellations, and the upgrade of Beneficial Insurance Limited’s issuer credit rating.
AM Best said in a statement it had withdrawn the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent) for Foundation Life (NZ) Limited (FLNZ). The action follows the insurer’s decision to cancel all participating insurance policies as of Sept. 1, 2025, as part of its ongoing wind-up.
Although still a licensed insurer, FLNZ was granted an exemption by the Reserve Bank of New Zealand under section 60 (2A) of the Insurance (Prudential Supervision) Act 2010, which means it no longer needs to hold a current financial strength rating.
AM Best said its standard procedure is to issue a final rating opinion when withdrawing ratings. However, as FLNZ no longer has insurance assets or liabilities on its balance sheet, it was unable to provide a final opinion.
Separately, AM Best upgraded Beneficial Insurance Limited’s long-term issuer credit rating to “bbb+” (Good) from “bbb” (Good) and affirmed its financial strength rating at B++ (Good).
The outlook for the issuer credit rating has been revised to stable from positive, while the outlook for the financial strength rating remains stable. AM Best cited improvements in Beneficial’s balance sheet fundamentals, supported by strong capital generation and prudent earnings retention.
Beneficial’s capitalisation, measured by Best’s Capital Adequacy Ratio, has consistently remained at the strongest level. Its performance has been bolstered by conservative investment strategies and moderate underwriting leverage.
In fiscal 2025, the insurer recorded a combined ratio of 71.1% and a return on equity of 33.3%, driven by its pet insurance portfolio. Investment income also added positively, with a net yield of 6.3%.
Despite its solid financial results, AM Best noted that Beneficial remains a niche player with limited scale and diversification, leaving it susceptible to volatility.
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