AM Best Affirms Credit Ratings of Quest Insurance Group Limited

SINGAPORE–(GOOD WIRE)–
AM Best has affirmed the Financial Strength of B (Fair) and the Long-Term Credit Rating of “bb+” (Fair) of Opinions of the company Quest Insurance Group Limited (Question) (new Zealand). The loan format (parts) is fixed.

The ratings reflect the strength of Quest’s paper, which AM Best considers to be adequate, as well as its performance, limited business history and corporate governance (ERM). In addition, the votes give the company neutral power from the majority of the company’s shareholders Company proposal Federal Pacific Group Limited.

Quest’s paper’s robustness assessment is driven by the most robust financial reform as of 2022, as measured by Best’s Capital Adequacy Ratio (BCAR). The risk of corporate underwriting has increased significantly in recent years due to the high growth rate. However, this was partially mitigated by the improvement of its financial position after the sale of fixed assets in the informal business in 2021. The current distribution of cash, long-term deposits and related loans is expected to remain unchanged in the short term. time. Factors that strengthen balance sheets include the company’s small investments, which increase the risk-adjusted capital’s sensitivity to pressures and changes in future operations, business growth and dividend returns.

AM Best assesses Quest’s performance as adequate and identifies its inconsistencies. The company has a five-year compound interest rate of 18.8% (fiscal years 2018 to 2022) and the total earnings during this period reflect a combination of strong operating performance and good investment returns. The company’s write-up has improved over the past two years mainly due to the company’s reduced expenses despite its losses. The improved interest rate was mainly driven by the growth of the economy, as well as lower costs due to changes in the product mix and the nature of long-term investments as they matured. However, the recent rapid growth of the business in highly profitable corporate insurance (CVI) has resulted in loss risk; this is expected to continue to drive potential changes in its performance in the short term.

A closer look at Quest’s business shows its presence in the small market and the stability of the products it offers, especially as providers of CVI and mechanical damage insurance (MBI) in new Zealand. The company’s growth has grown significantly in recent years, driven by the growth of Quest’s direct strategy and strategic alliances with Opinions of the company Janssen Insurance Limited (Janssen), a third-party distributor of auto insurance. This has changed Quest’s distribution strategy outside of joint ventures written jointly with its medium-sized parent group, Geneva Finance Limited. However, there is an inherent risk associated with the company’s partnership with Janssen. Prospectively, AM Best expects the growth of the Quest business in the short term to be driven mainly by increased volume written through the partnership with Janssen, as well as the direct distribution of the MBI and CVI business.

AM Best evaluates Quest’s ERM as appropriate based on the size and complexity of the company’s operations. After recent business growth, the company is at high risk of write-offs and executions. However, this risk has been mitigated to some extent due to a thorough review of the underwriting process, as well as a careful pricing and booking process with the help of third-party experts. AM Best considers Quest’s risk management capabilities to be well worth the risk, and expects continued growth as the company expands its portfolio in the short term.

Ratings are given to organizations that have been rated before they are published. Unless otherwise stated, the ratings have not been changed following this communication.

This article relates to the Credit Ratings published on the AM Best website. For more information on ratings related to issuance and relevant disclosures, including details of the office responsible for issuing all ratings listed in this publication, please see AM Best’s. Recent Actions Web page. For more information on the application and limitations of the Credit Rating concept, please see Best’s Credit Ratings Guide. For more information on the appropriate use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best’s social media, please see Tips for Effectively Using Quality Scores & Tests.

AM Best is a global credit agency, news publisher and data analytics provider specializing in the insurance industry. Headquarters at United Statesthe company does business in more than 100 countries with regional offices London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by AM Best Rating Services, Inc. and/or partners. ALL RIGHTS RESERVED.

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Source: AM Best