AMI maintains A+(Superior) AM Best rating despite a decline in underwriting performance

By John Grant AMI have had their "˜Superior' A+ credit rating reconfirmed by ratings agency A.M. Best. The company is yet to issue its annual report for the year ending 30 June 2009. However, A.M. Best's annual review of AMI's performance shows the insurer has slipped its net earnings from NZ$26.2m in 2008 to just NZ$7.5m this financial year. The company has had to cope with three catastrophe events in this period and A.M Best believes recent hardening in rates will see a gradual improvement in the company's underwriting margin going forward. The combined ratio made up of underwriting performance and expenses deteriorated from 96.9% for the 2008 financial year to be 100% in 2009. However the company has seen steady growth in its capital and surplus base to now stand at $334m up from $230m in 2005. A.M. Best expects that AMI's risk-adjusted capitalisation will remain stable, as consistent operating profitability and corresponding surplus accumulation will continue to support future premium growth. AMI investments assets generated a net yield of 6.4% at an effective average yield of 7% over 5 years. AMI has a strong market position with around 30% share of the domestic home, contents and motor market. It is the only insurer operating under a mutual structure where the ultimate ownership rests with the policyholders. Its head office is in Christchurch and they're sponsors of AMI Stadium (previously Jade Stadium) in Christchurch and have been sponsoring club rugby referees around New Zealand for several years. Their annual report is expected to be released prior to the annual meeting in November. "”"”"”"” * John Grant edits the insurance coverage on interest.co.nz