Insurance firm Sovereign has had its financial strength of A+ (Superior) affirmed by ratings agency AM Best.

Consequently, AM Best has removed Sovereign’s ‘review with developing implications status’ − which it applied in anticipation of AIA Group’s purchase of Sovereign, which was completed in July 2018 − and also gave Sovereign a long-term issuer credit rating of aa-. The outlook of the credit ratings is stable.

“The ratings reflect Sovereign’s balance sheet strength, which AM Best categorises as very strong, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management,” the ratings agency said. “In addition, Sovereign benefits from rating enhancement from AIA.”

Meanwhile, Sovereign chief financial officer Linda Page noted an insurer’s financial rating is a direct reflection of its ability to pay claims. The assigned credit rating gives customers the certainty they want that Sovereign will be able to honour its commitment to them, she added.

In the year ending on June 30, 2018, Sovereign paid $388 million in claims. Sovereign will begin operating under the AIA brand during 2019.