Brightsideco Insurance NZ’s credit ratings placed under review

AM Best has placed the ratings of Brightsideco Insurance (New Zealand) under review with negative implications.

The international insurance ratings house previously issued a financial strength rating of B (fair) and a long-term issuer credit rating of bb+ (fair) to Brightsideco.

According to AM Best, the rating actions follow Brightsideco’s plan to move its extended warranty portfolio distributed by Harvey Norman Holdings, a large electrical goods retailer based in Australia, into run-off from Aug. 1. This comes after Harvey Norman announced that it will not renew its contract with Brightsideco upon its expiry on July 31. The portfolio represents 99% of Brightsideco’s total insurance liabilities and is expected to be run-off until 2029.

The ratings were placed under review with negative implications to reflect the continued uncertainty over Brightsideco’s prospective business profile while the insurer is exploring opportunities to provide comparable underwriting services to existing and new non-Harvey Norman customers, AM Best said.

“The ratings will remain under review pending Brightsideco’s decision on its future business plan, and until AM Best can fully assess the impact of these factors on the company’s business profile and balance sheet strength fundamentals,” it said.