OnePath's Financial Strength and Solvency

It’s our job to provide you with the insurance cover you need to protect your life and your lifestyle, and to be there for you if you ever need us. With our recently acquired financial strength rating from world renowned rating house Standard & Poor’s (Australia) Pty Limited we hope that this adds to your confidence in choosing OnePath as your trusted insurer.
 

If you’re not already a customer of OnePath – thanks for visiting our website, and we encourage you to read on to find out why so many New Zealanders trust us.

The following information relates to our Financial Strength Rating and the OnePath Life Statutory Fund, both of which reinforce our strong financial position and our ability to pay claims.

What is OnePath’s financial strength rating?

OnePath Life has an A+ (strong) insurer financial strength rating under the Insurance (Prudential Supervision) Act 2010 from Standard & Poor’s (Australia) Pty Limited. This means that OnePath is considered to have a strong ability to pay out eligible claims.

Standard & Poor’s rating scale is:

  • AAA  Extremely strong
  • AA  Very strong
  • A Strong
  • BBB Good
  • BB  Marginal
  • B Weak
  • CCC Very weak
  • CC  Extremely weak
  • SD or D Selective default or default
  • R  Regulatory action
  • NR Not rated

Ratings from “AA” to “CC” can be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. The above rating scale is in summary form. The full rating scale is available from Standard & Poor's at www.standardandpoors.com.

What is an insurer’s financial strength rating and what is its purpose?

In simple terms, an insurer’s financial strength rating is a measurement that summarises the risk of an insurer defaulting on its obligation to pay claims. An insurer’s financial strength rating is required for licensed insurers under the Insurance (Prudential Supervision) Act 2010.  The Reserve Bank of New Zealand supervises compliance with the requirements of that Act.

The purpose of the rating is to provide a means of enabling the public to distinguish between higher and lower risk insurance companies so that they are able to make more informed decisions when choosing their insurer. It is common all around the world for insurance companies, banks and other companies in the financial services industry to have such a rating.

Why is it important to know about an insurance company’s financial strength rating?

There are many factors involved in choosing an insurance provider. For example, does the product meet my needs? Is it good value for money? And is this an insurer I trust to be there for me if I ever need to make a claim? It’s not a straightforward decision and therefore, as a consumer, it’s important to know about the financial strength rating of all insurance providers so that you can make an informed decision.

Who are Standard & Poor’s?

Standard & Poor’s is a rating agency approved by the Reserve Bank of New Zealand for the purpose of rating licensed insurers. They have been operating since 1916 and provide ratings for many companies in New Zealand and around the world. For more information about Standard & Poor’s you can visit their website at www.standardandpoors.com

What is a Standard & Poor’s insurer financial strength rating?

A Standard & Poor’s insurer financial strength rating is a forward-looking opinion about the financial security characteristics of an insurance organisation with respect to its ability to pay under its insurance policies and contracts in accordance with their terms.

Does a financial strength rating provide a guarantee to customers?
No, a financial strength rating is an independent opinion only and does not provide a guarantee to customers.

What is a statutory fund?

A statutory fund is a fund that is established in the records of a life insurance company and relates to its life insurance business.

What is the purpose of a statutory fund?

The purpose of a statutory fund is to ensure that the funds received and paid out in respect of life insurance policies are separately identifiable as being part of the statutory fund. The assets of the statutory fund enjoy certain protections under the Insurance (Prudential Supervision) Act 2010 which are designed to ensure that the interests of holders of life insurance policies are given certain priority over the interests of other parties, such as unsecured creditors.

Why do I need to know about the OnePath Life Statutory Fund?

Under the Insurance (Prudential Supervision) Act 2010 we are required to tell our existing and new holders of life insurance policies that their policy is part of OnePath Life’s Statutory Fund. Along with our financial strength rating we hope that it will give you more confidence about current or future insurance cover with OnePath Life, and to reinforce our message that you can trust us to be here for you if and when you ever need to make a claim.

If you have any questions please don’t hesitate to contact your adviser, or OnePath directly on 0508 464 999 (select option three).

OnePath's Solvency

Like all licensed insurance companies in New Zealand, OnePath Life (NZ) Limited is required to meet the Solvency Standard set by the Reserve Bank of New Zealand.

What is a Solvency Standard?

A Solvency Standard sets out the minimum amount of capital an insurance company is required to hold in order to meet its long-term projected liabilities under adverse conditions. These liabilities include insurance claims that the company is expected to pay to its customers in the future.

What is the Solvency Margin?

The Solvency Margin is the amount of capital an insurance company holds that is above the minimum level of capital it is required to hold under the Solvency Standard.

What is OnePath Life (NZ) Limited's Solvency Margin?

The Solvency Margin of OnePath Life (NZ) Limited as at 31 March 2018 is $38.2m. The table below shows how the Solvency Margin is made up:

  Statutory Fund
Actual Solvency Capital $473.0m
Minimum Solvency Capital $434.8m
Solvency Margin $38.2m
Solvency Ratio 109%

 

Interpretation

'Actual Solvency Capital' is the actual capital held for solvency purposes.

'Minimum Solvency Capital' is the capital required to be held by the Reserve Bank of New Zealand for solvency purposes.

The difference between the Actual Solvency Capital and Minimum Solvency Capital is the Solvency Margin.

'Solvency Ratio' is the Actual Solvency Capital divided by the Minimum Solvency Capital, expressed as a percentage.

What does a Solvency Margin mean to me as a customer?

The higher the Solvency Margin, the better equipped an insurance company is to keep meeting its on-going obligations. With its Solvency Margin you can be confident that OnePath Life (NZ) Limited will be there when you need them the most – at claim time.

Want to know more or find an adviser?

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