S&P Upgrades NRMA NZ Ratings to ‘AA+’

February 8, 2002

Standard & Poor’s announced that it has upgraded its insurer financial strength and counterparty credit ratings on New Zealand-based NRMA Insurance NZ Ltd., formerly State Insurance Ltd., to double-‘A’-plus from double-‘A’-minus and removed them from CreditWatch.

S&P put the company on its watch list on Feb. 9, 2001, when Insurance Australia Group Ltd. (IAG), formerly NRMA Insurance Group Ltd., the major operating unit of NRMA Insurance Ltd., agreed to purchase State Insurance.

Michael Vine, S&P Director in Australia for Financial Services Ratings, indicated that the “upgrade follows Standard & Poor’s assessment of NRMA NZ as a core operating subsidiary of the IAG group, aligning with IAG’s strategic direction and demonstrating successful assimilation with key group initiatives.”

He further indicated that, “With market leadership in the New Zealand general insurance sector and excellent franchise in direct personal lines under the ‘State’ brand, NRMA NZ is a natural fit for IAG’s strategic direction, which involves diversification out of its home state of New South Wales, focus on core retail lines of motor and householders insurance, along with opportunities to expand SME and commercial business.”

“In its own right, NRMA NZ features a conservative financial structure, strong and improving underwriting performance, and an excellent retail franchise. The outlook is negative, reflecting that of the parent group’s capital management strategy to maximize returns and fund its growth targets,” S&P’s report concluded.

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