A.M. Best Affirms Rating of CIGNA Life Insurance New Zealand Limited; Assigns Issuer Credit Rating.OLDWICK, N.J. -- A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of A- (Excellent) and assigned an issuer credit rating of "a-" to CIGNA CIGNA CG (Connecticut General Life Insurance Company) INA (Insurance Company of North America) Life Insurance New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. Limited (CIGNA Life) (New Zealand). The outlook for both ratings is stable. The ratings of CIGNA Life reflect its prudent capitalization, conservative investment portfolio and profitable operation. CIGNA Life is prudently capitalized on a risk-adjusted basis. Best's Capital Adequacy Ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. , which measures capitalization on a risk-adjusted basis, also demonstrates the company's strong capital position. CIGNA Life has adopted a conservative investment portfolio. Approximately 92% of investment assets are invested in short-term deposits or government fixed interest securities. Additionally, shareholder investments constitute 70% of total assets. CIGNA Life's average dividend payout of 4% over the past five years has resulted in steady growth in capital and surplus. Offsetting factors include CIGNA Life's concentrated premium source and large expected dividend payout. A.M. Best remains cautious of the company's exposure to the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of the credit market in New Zealand, given CIGNA Life's business concentration in credit life insurance. Finally, a substantial dividend payout is expected pending the completion of CIGNA Group's regional restructure. This dividend payout will substantially reduce the company's capital and surplus. Forecasts indicate that CIGNA Life's solvency position will remain sound. For Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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