AM Best Affirms Credit Ratings of Union Medical Benefits Society 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 Union Medical Benefits Society Limited (UniMed) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.

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The ratings reflect UniMed’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

UniMed’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which was at the strongest level for fiscal year ended 30 June 2022 reflecting the company’s, low underwriting leverage and moderate risk investment strategy. The company’s regulatory solvency position was substantially higher than the regulatory minimum requirement and its own internal minimum threshold. As a member-owned organisation, AM Best considers UniMed’s financial flexibility to be limited. However, this is mitigated partially by the company’s prudent approach to capital management and its track record of robust internal capital generation.

AM Best views UniMed’s operating performance as strong, with a five-year average return-on-equity ratio of 6.0% and a combined ratio of 93.4% (fiscal years 2018-2022). In recent years, the company’s overall operating results experienced volatility as a result of COVID19 and volatile investment markets. UniMed benefits from its ability to adjust premium rates rapidly in response to any claims deterioration, as well as an efficient cost structure that allows it to offer competitive health coverage and premiums to its members. Prospectively, AM Best expects the company’s operating performance to remain robust although investment in marketing activities and technology infrastructure is expected to drive an increase in its expense ratio over the medium term.

AM Best assesses UniMed’s business profile as limited, largely reflecting its small-scale operations and its limited product and geographic diversifications. The company is a not-for-profit organisation that provides health insurance to its members in New Zealand. In addition, AM Best views the company as having a concentration toward a small number of large group medical accounts, which increases the susceptibility of overall earnings to changes in the performance of these key accounts. AM Best expects the company’s investments in marketing and technology to support its next phase of accelerated growth and customer retention.

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 © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


Isaac Yeo
Associate Financial Analyst
+65 6303 5019
[email protected]

Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
[email protected]

Michael Dunckley, CFA
Associate Director, Analytics
+44 20 7397 0312
[email protected]

Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
[email protected]

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