AM Best Affirms Credit Ratings of Pinnacle Life Limited

SINGAPORE–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb+” of Pinnacle Life Limited (Pinnacle Life) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.

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

Pinnacle Life’s balance sheet strength is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which AM Best expects to remain at the strongest level over the medium term, albeit with a declining trend driven by increased underwriting risk as the company executes its strategic growth plan. The company has a highly liquid investment portfolio focused on cash and term deposits. Since fiscal-year 2020, the company has increased the diversification by asset class within its portfolio, through investing in high-quality fixed income securities to strengthen its asset-liability management. Pinnacle Life has experienced some volatility in its regulatory solvency ratio over recent years. Nonetheless, AM Best expects prospective regulatory solvency to be managed to an adequate level over the medium term. However, AM Best notes that given the company’s small absolute capital base, capital adequacy remains sensitive to the rate of new business growth, changes in the interest rate environment and shock events. In addition, AM Best views the company as having a high reliance on third-party reinsurance.

AM Best views Pinnacle Life’s operating performance as adequate, with the company having generated a five-year average return-on-equity ratio of 9.9% (fiscal-years 2016-2020). The company’s operating results have been driven by the robust underwriting performance of its in-force life business, coupled with solid investment returns. Overall earnings during this period have exhibited moderate volatility, driven mainly by discount rate movements impacting reported technical results. Prospectively, AM Best expects Pinnacle Life’s operating performance to remain adequate whilst the company executes its significant growth plan, underpinned by a robust pricing strategy and support from a strategic distribution partner.

AM Best considers Pinnacle Life’s business profile as limited, largely reflecting the company’s small-scale of operations, as well as its low product and geographical diversification in New Zealand. The company is focused mainly on term life and funeral insurance and has a domestic life insurance market share of less than 1%, based on 2020 gross premium written. Despite challenging market conditions, the company’s in-force book of business has grown rapidly in recent years, with prospective growth to be supported by development of a wider product offering and new distribution agreements with a strategic partner.

AM Best views Pinnacle Life’s ERM as appropriate given the size and complexity of the company’s current operations. While AM Best considers Pinnacle Life’s risk management capabilities as appropriate for its key risks, it expects continual development as the company increases its scope of operations over the near term.

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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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 © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


Sin Yee Chuah
Financial Analyst
+65 6303 5022

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Alex Rafferty, ACA
Associate Director, Analytics
+44 20 7397 0312

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644

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