AM Best Affirms Credit Ratings of PPS Mutual Limited
AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of PPS Mutual Limited (PPS Mutual) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect PPS Mutual’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). In addition, the ratings factor in a neutral holding company impact from PPS Mutual’s owner, PPS Holdings Limited (PPS Holdings).
PPS Mutual’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which was at the strongest level at year-end 2025, as measured by Best’s Capital Adequacy Ratio (BCAR), and is expected to remain at that level over the medium term. AM Best considers PPS Mutual’s capital management plan as appropriate to support its planned business expansion during the start-up phase of its operations, taking into account capital injections from PPS Holdings, as needed. AM Best views PPS Mutual to have a high reliance on third-party reinsurance for risk transfer and upfront commission financing. This risk is partially mitigated by the high credit quality of the reinsurance counterparty. Another offsetting balance sheet strength factor is PPS Mutual’s small absolute capital base, which exposes its capital adequacy to potential volatility in the event of stress scenarios.
