AM Best Affirms Credit Ratings of FMG Insurance Limited

SINGAPORE–(BUSINESS WIRE)–#insuranceAM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of FMG Insurance Limited (FMGIL) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect FMGIL’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). In addition, the ratings factor in a neutral holding company impact from the company’s 100% ownership by Farmers’ Mutual Group (FMG).

FMGIL’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which is expected to remain at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Despite a weakened regulatory capital position as of fiscal year-end (31 March) 2023 as a result of an operating loss, the company continues to demonstrate prudent capital management to support its capital needs. FMGIL is considered to have a comprehensive reinsurance programme that provides protection against high-severity modelled catastrophe events in New Zealand. AM Best views the company’s investment portfolio to be of moderate risk with a focus on cash and high-quality fixed-income securities, albeit with some exposure to equities. A partially offsetting balance sheet strength factor is the company’s limited financial flexibility, given its ultimate ownership by FMG, a mutual organisation.

AM Best assesses FMGIL’s operating performance as adequate, with a five-year average return-on-equity ratio of 6.7% (fiscal years 2019-2023). For fiscal year 2023, the company reported negative underwriting and operating results, due to a combination of claims cost inflation and the impact of several large weather events in New Zealand. Notwithstanding this, AM Best expects the company’s robust pricing strategy and positive investment returns to help maintain its adequate operating performance assessment over the medium term.

AM Best views FMGIL’s business profile as neutral. The company benefits from its established profile as a leading rural insurer in New Zealand, despite having a modest market share of approximately 6% of the overall non-life segment, based on gross written premium. FMGIL has a strong direct distribution business model that is built on long-standing customer relationships and supported through its ownership by FMG, which has a long history and strong brand recognition in New Zealand’s rural sector. Whilst operating solely in New Zealand, FMGIL’s premium base is better diversified geographically compared with other domestic general insurers, as its focus on the rural sector helps to spread its insured risks across the country.

AM Best considers FMGIL’s ERM to be developed and appropriate for the company’s risk profile and operational scope.

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 © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


Yi Ding

Senior Financial Analyst

+65 6305 5021

Victoria Ohorodnyk

Director, Head of Analytics

+65 6303 5020

Christopher Sharkey

Associate Director, Public Relations

+1 908 882 2310

Al Slavin

Senior Public Relations Specialist

+1 908 882 2318

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