AM Best Removes From Under Review With Negative Implications and Affirms Credit Ratings of Momentum Life Limited

Business Wire

SINGAPORE--(BUSINESS WIRE)--
AM Best has removed from under review with negative implications and affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb” (Fair) of Momentum Life Limited (Momentum Life) (New Zealand). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Momentum Life’s balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and marginal enterprise risk management (ERM). In addition, the ratings factor in the neutral impact from the company’s 100% owners, DCG Invest Limited (DCG), a New Zealand domiciled investment holding company.

The ratings have been removed from under review with negative implications as AM Best has completed its analysis and assessment of Momentum Life’s post-acquisition details and business plans. The acquisition of Momentum Life by DCG closed in July 2025.

AM Best assesses Momentum Life’s risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and expects it to remain at this level over the medium term. Following a post-acquisition capital injection, the company’s regulatory solvency position improved from its prior negative position to 117% as of September 2025. Partially offsetting balance sheet strength factors include Momentum Life’s small absolute capital base, which increases its sensitivity to stress scenarios, as well as its high reliance on third-party reinsurance for risk transfer and upfront commission financing; however, this risk is partially mitigated by the high credit quality of the reinsurance counterparty.

AM Best assesses Momentum Life’s operating performance as marginal. The revision of the operating performance assessment to marginal from adequate reflects the sustained pressure on the company’s underwriting results, with it recording a loss before tax in the last three consecutive fiscal years (2023 – 2025), as well as for the first half of fiscal-year 2026. Momentum Life’s earnings have been constrained by its high expense ratio relative to its small premium base and muted growth in recent periods. Prospectively, AM Best expects that Momentum Life’s underwriting performance will improve, as the new management team executes its strategic business plan and achieves greater economies of scale, while managing expenses. Nonetheless, AM Best views there to be a high level of execution risk stemming from the company’s growth strategy, given the highly competitive nature of the New Zealand life insurance market.

AM Best views Momentum’s Life business profile as limited, reflecting its small scale of operations as well as its concentration of business in New Zealand’s life insurance sector. The products offered by Momentum Life include guaranteed acceptance funeral insurance and fully underwritten term life insurance products, which have a low risk profile. Momentum Life benefits from good control over its underwriting and sales practices, with all products distributed through its wholly owned subsidiary. Prospectively, the company plans to expand its distribution network to include intermediated channels.

Momentum Life’s ERM is assessed as marginal. Negative solvency margins and underwriting losses in recent periods have highlighted weaknesses in the company’s risk management capabilities. Following the change in ownership, these shortfalls are being addressed by management, with a formal review of the company’s risk management framework and policy, which is expected to be completed in fiscal-year 2026. Over the medium term, AM Best expects continual development of the company’s risk management framework and capabilities to support its increasing operational scale.

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 www.ambest.com.