A.M. Best Affirms Ratings of CIGNA Life Insurance New Zealand Limited.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "a-" for 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 on both ratings remains stable. The ratings reflect the company's favorable level of risk-adjusted capitalization, continued improvement in operation profitability and conservative investment mix. The ratings also acknowledge the prominent market position within its core business lines. CIGNA Life's risk-adjusted capitalization, as measured by 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. , is strong and showing a positive trend. The company's aggregate capital and surplus levels have increased consistently in the past years, due mainly to its high retention of operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before . Its five-year average growth rate of capitalization stands at 10.6%. CIGNA Life experienced a strong growth in net earnings to NZD NZD In currencies, this is the abbreviation for the New Zealand Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 11.5 million (approximately USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 7.8 million) in 2005 from NZD 5.3 million (approximately USD 3.8 million) in 2004. The company has a highly liquid investment portfolio, generating a net yield of 8.8%. As of year-end 2005, cash and fixed interest securities represented approximately 95% of invested assets. This prudent investment strategy has partly sheltered the company's operating earnings from potential volatility. The primary offsetting rating factor is the company's concentration of business in credit life insurance. Given the company's niche target market, A.M. Best believes the sustainability of CIGNA Life's business growth could be adversely affected by a downturn in the New Zealand credit market. For Best's Ratings, 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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