Sovereign Awarded A+ Rating

Media Release
For immediate release
Friday 15 January 2010

Sovereign Awarded A+ Rating

At a time when financial institutions have been rocked by instability and waning consumer confidence, Sovereign Assurance Company Limited (Sovereign) has been deemed as having “a superior ability to meet its ongoing obligations to policyholders”.

That review was given as part of AM Best Company Inc’s (AM Best) award of an A+ (Superior) Financial Strength Rating on 22 December 2009*. A+ (Superior) is AM Best’s second highest rating and the highest rating it has given to any life insurer in New Zealand. Sovereign was also awarded an A+ (Superior) rating for financial strength from AM Best in 2007 and 2008.

According to financial analysts from AM Best** - the rating reflects Sovereign’s leadership in the market, improved risk-adjusted capitalisation and continued improvements in operating performance.

“We are delighted with this continued show of confidence,” says Sovereign Managing Director, Charles Anderson. “Not only does it confirm Sovereign’s position as one of New Zealand’s highest-rated insurance companies, it also gives added peace of mind to both advisers and clients at a time when the insurance industry is working through significant regulatory changes and taxation reforms. The rating is a direct measure of our ability to meet our on-going obligations to policy holders.

“Insurance provision is a long term proposition. Advisers and customers need to be able to trust their insurance provider to honour its promise when it comes to claim time.

“The report highlights that, despite the current volatile investment environment, Sovereign’s risk adjusted capitalisation improved in the 2009 fiscal year”.

According to AM Best, this was achieved through prudent asset and liability management, conservative investment of shareholder’s funds, and consistent underwriting profitability which supported Sovereign’s continued growth in financial strength.

Notes

* A copy of the scale of which this rating forms part is available from Sovereign
** AM Best Company Inc is a global organisation (and an approved rating agency in New Zealand) that undertakes public rating assignments.

ENDS

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