AM Best Downgrades Credit Ratings of Accuro Health Insurance Society Limited
AM Best Downgrades Credit Ratings of Accuro Health Insurance Society Limited

AM Best Downgrades Credit Ratings of Accuro Health Insurance Society Limited

SINGAPORE, April 28, 2023–(BUSINESS WIRE)–AM Best has downgraded the Financial Strength Rating (FSR) to B (Fair) from B+ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bb” (Fair) from “bbb-” (Good) of Accuro Health Insurance Society Limited (Accuro) (New Zealand). The outlooks of these Credit Ratings (ratings) have been revised to stable from negative.

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

The rating downgrades reflect a deterioration in AM Best’s view of Accuro’s balance sheet fundamentals. The company’s risk-adjusted capitalisation for fiscal-year ended 31 August 2022, as measured by Best’s Capital Adequacy Ratio (BCAR), fell to adequate from strong at the previous year end. Accuro’s risk-adjusted capitalisation is expected to fall to the weak level over the near term, primarily as a result of underwriting growth outpacing the growth in tangible capital. The company has undertaken a substantial investment to upgrade its policy administration system in recent years, which gave rise to material intangible assets relative to its capital base of NZD 11.8 million as of 31 August 2022. Accuro’s prospective capital adequacy is highly sensitive to changes in the development and implementation costs arising from this infrastructure investment, as well as to variations in future earnings.

AM Best expects Accuro’s regulatory solvency position to remain appropriate, although the company is expected to record a weaker solvency position than previously indicated at fiscal year-end 2023, due to a cyber incident that adversely impacted its cashflow position. AM Best considers Accuro’s financial flexibility to be limited, given its status as a member-owned organisation. However, the company has the ability to make rate adjustments on relatively short notice to support profitability, if required.

AM Best views Accuro’s operating performance as adequate with a five-year average return-on-equity ratio of 5.6% (fiscal-years 2018-2022). The company’s combined ratio has typically tracked at the break-even level, reflective of Accuro’s status as a not-for-profit organisation that provides health insurance in New Zealand. In fiscal-year 2022, Accuro recorded a favourable return-on-equity ratio of 15.1%, primarily as a result of a fall in claims frequency due to the impact of the COVID-19 pandemic. However, claims are now returning to more usual frequencies following the removal of COVID-19-related restrictions in the country.

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 AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Yi Ding
Senior Financial Analyst
+65 6303 5021
[email protected]

Christopher Sharkey
Associate Director, Public Relations
+1 908 439 2200, ext. 5159
[email protected]

Michael Dunckley, CFA
Director, Analytics
+65 6303 5020
[email protected]

Al Slavin
Senior Public Relations Specialist
+1 908 439 2200, ext. 5098
[email protected]

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