Insurer Financial Strength Ratings NZ: What They Mean and Why They Matter
When you buy life insurance, health insurance, or income protection, you are entering into a contract that might not be tested for 10, 20, or even 30 years. When the time finally comes to make a claim, the insurer needs to have the financial resources to pay it. That is what financial strength ratings measure.
Despite being one of the most important factors in choosing an insurer, financial strength ratings are among the least understood. Most New Zealanders compare premiums and product features but never check whether their insurer has the financial backing to honour its promises decades from now.
This guide explains how financial strength ratings work, which rating agencies operate in the NZ market, how to read their scales, and how every major NZ insurer is currently rated.
What Is a Financial Strength Rating?
A financial strength rating is an independent assessment of an insurance company's ability to meet its ongoing obligations to policyholders, measuring how likely an insurer is to pay a claim when needed. Rating agencies assess capital adequacy, operating performance, business profile, risk management and reinsurance. The result is a forward-looking opinion, and every licensed New Zealand insurer must hold one.
These ratings are issued by specialised credit rating agencies that analyse an insurer's:
- Capital adequacy. Does the insurer hold enough reserves to cover expected and unexpected claims?
- Operating performance. Is the insurer consistently profitable, or is it burning through capital?
- Business profile. How diversified is the insurer's book of business, and how well positioned is it in its market?
- Risk management. How effectively does the insurer manage investment risk, underwriting risk, and catastrophe exposure?
- Reinsurance arrangements. Does the insurer have robust reinsurance in place to protect against large or clustered claims?
The resulting rating is a forward-looking opinion. It does not guarantee an insurer will never fail, but it gives consumers and regulators a standardised way to compare the financial health of different insurers.
Why Financial Strength Ratings Matter for Kiwis
Financial strength ratings matter for Kiwis because a life insurance policy is a promise that may not be tested for 25 years, and that promise is only as reliable as the insurer's financial position. New Zealand has roughly seven to ten major life and health insurers, so a single failure would disrupt policyholders, particularly those with pre-existing conditions.
Consider a 35-year-old who takes out life insurance and income protection today. That person may not make a claim for 25 years. Over that period, the insurer must remain solvent, continue to hold adequate capital, and maintain the financial capacity to honour potentially hundreds of millions of dollars in claims across its entire portfolio.
A strong financial strength rating provides confidence that the insurer can do this. A weak rating, or no rating at all, should prompt serious questions.
Financial strength ratings also matter because New Zealand's insurance market is relatively small. Unlike in larger markets where dozens of insurers compete, New Zealand has roughly seven to ten major life and health insurers. If one were to fail, the disruption to policyholders could be significant, particularly for those with pre-existing conditions who may struggle to obtain replacement cover.
The Three Rating Agencies That Matter in NZ
Three international rating agencies assess insurers operating in New Zealand: A.M. Best (Guide to Best’s Financial Strength Ratings, A.M. Best), Fitch (Rating definitions, Fitch Ratings) and S&P Global. For the current rating of every licensed NZ life and health insurer in one table, see our financial-strength explorer, and for how ratings sit alongside published claims statistics, our Claims & Insurer Strength report. A.M. Best, founded in 1899 and focused exclusively on insurance, rates Partners Life and Fidelity Life. Fitch Ratings rates AIA and Asteron Life. S&P Global rates nib and Southern Cross; A.M. Best rates Chubb Life New Zealand. Each uses a slightly different scale, but all serve the same purpose.
A.M. Best
Source: Guide to Best’s Financial Strength Ratings, A.M. Best, retrieved 9 September 2026.
A.M. Best is the oldest and most specialised insurance rating agency in the world, founded in 1899. It focuses exclusively on the insurance industry and is widely regarded as the benchmark for insurer financial strength globally.
In the NZ market, A.M. Best rates Partners Life and Fidelity Life, among others, as each publishes on its own disclosure page, retrieved 14 August 2026.
Fitch Ratings
Source: Rating definitions, Fitch Ratings, retrieved 9 September 2026.
Fitch is one of the "Big Three" global credit rating agencies. It rates both insurers and other financial institutions. Fitch's insurance financial strength ratings are widely used across the Asia-Pacific region.
In New Zealand, Fitch rates AIA New Zealand and Asteron Life, as each publishes, retrieved 14 August 2026.
S&P Global Ratings
Source: Southern Cross Health Society financial strength and nib nz, both retrieved 14 August 2026.
S&P Global is another of the Big Three agencies and provides financial strength ratings for insurers worldwide. S&P ratings are particularly common among larger multinational insurance groups.
In the NZ market, S&P rates nib nz and Southern Cross, while Chubb Life NZ is rated by A.M. Best, as each publishes, retrieved 14 August 2026.
How to Read the Rating Scales
Rating agency scales are letter-based, similar but not identical, and run from the highest grade down to grades signalling financial vulnerability. A.M. Best runs from A++ and A+ (Superior) through A and A- (Excellent) to B++ and B+ (Good). Fitch and S&P Global run from AAA through AA and A grades to BBB. All major New Zealand insurers are rated A or above. The published scales are the A.M. Best guide and Fitch rating definitions.
The following table shows the key rating grades you will encounter in the NZ market.
A.M. Best Scale
Scale as published in the Guide to Best’s Financial Strength Ratings, A.M. Best.
| Rating | Descriptor | What It Means |
|---|---|---|
| A++ | Superior | Strongest ability to meet ongoing obligations |
| A+ | Superior | Strongest ability to meet ongoing obligations |
| A | Excellent | Strong ability to meet ongoing obligations |
| A- | Excellent | Strong ability to meet ongoing obligations |
| B++ | Good | Adequate ability to meet ongoing obligations |
| B+ | Good | Adequate ability to meet ongoing obligations |
Fitch Scale
Scale as published in Fitch’s Rating definitions, Fitch Ratings.
| Rating | Descriptor | What It Means |
|---|---|---|
| AAA | Exceptionally Strong | Lowest expectation of ceasing payment |
| AA+, AA, AA- | Very Strong | Very low expectation of ceasing payment |
| A+, A, A- | Strong | Low expectation of ceasing payment |
| BBB+, BBB, BBB- | Good | Low expectation of ceasing payment, but more vulnerable to adverse conditions |
S&P Global Scale
Grades as published by the rated insurers: Southern Cross Health Society financial strength and nib nz, both retrieved 14 August 2026.
| Rating | Descriptor | What It Means |
|---|---|---|
| AAA | Extremely Strong | Highest rating; extremely strong capacity to meet obligations |
| AA+, AA, AA- | Very Strong | Very strong capacity to meet obligations |
| A+, A, A- | Strong | Strong capacity, but somewhat more susceptible to adverse conditions |
| BBB+, BBB, BBB- | Adequate | Adequate capacity, but adverse conditions more likely to weaken ability to meet obligations |
A practical note. All the major NZ insurers currently hold ratings in the A range or above across their respective agencies. This means the NZ market is, by international standards, well capitalised. However, there are meaningful differences between an A- rating and an AA rating, particularly over long time horizons.
Current Financial Strength Ratings for Major NZ Insurers
Every major New Zealand life and health insurer currently holds a rating in the A range or above with a Stable outlook. Partners Life holds A (Excellent) and Fidelity Life A- (Excellent) from A.M. Best. AIA New Zealand holds AA (Very Strong) and Asteron Life A+ (Strong) from Fitch. Chubb Life New Zealand holds A (Excellent) from A.M. Best, while Southern Cross Medical Care Society, the health insurer, holds A+ and nib A from S&P Global. Every grade below is the one the insurer itself publishes: Partners Life, AIA New Zealand, Asteron Life, Chubb Life NZ, Fidelity Life, nib nz and Southern Cross, all retrieved 14 August 2026.
Partners Life
- Rating: A (Excellent), as the insurer publishes it, retrieved 14 August 2026
- Agency: A.M. Best
- Outlook: Stable
Partners Life is New Zealand's largest adviser-supported life insurer by new business volume. Its A (Excellent) rating from A.M. Best reflects strong capitalisation and a growing market position. Partners Life has won the ANZIIF Life Insurance Company of the Year award multiple times, most recently in 2025. Rating as published by Partners Life, retrieved 14 August 2026.
AIA New Zealand
- Rating: AA (Very Strong), as the insurer publishes it, retrieved 14 August 2026
- Agency: Fitch Ratings
- Outlook: Stable
AIA New Zealand benefits from the financial strength of its parent, AIA Group, which is the largest publicly listed life insurance group in the Asia-Pacific region. The AA rating is among the highest held by any insurer operating in New Zealand, reflecting AIA Group's substantial capital base and diversified operations across 18 markets.
Asteron Life
- Rating: A+ (Strong), as the insurer publishes it, retrieved 14 August 2026
- Agency: Fitch Ratings
- Outlook: Stable
Asteron Life New Zealand is part of the Acenda Group (formerly Resolution Life Australasia), ultimately owned by Nippon Life Insurance Company of Japan. It left the Suncorp Group when Resolution Life completed its purchase on 3 February 2025. Asteron Life paid out on 97% of the Trauma, Life and Income Protection claims it received between 1 July 2023 and 30 June 2024 (Asteron Life media release, 11 December 2024, retrieved 18 August 2026), the highest published payout rate in our comparison of NZ life insurers.
Fidelity Life
- Rating: A- (Excellent), as the insurer publishes it, retrieved 14 August 2026
- Agency: A.M. Best
- Outlook: Stable
Fidelity Life is the largest New Zealand-owned life insurer, backed by the NZ Super Fund and Ngai Tahu Holdings. Its A- (Excellent) rating from A.M. Best (RBNZ Register of licensed insurers, retrieved 18 August 2026) reflects solid capitalisation and a growing book of business, bolstered by its acquisition of the Westpac Life portfolio in 2022. Fidelity Life has paid more than $2 billion in claims in the 52 years since it was founded (riskinfonz, 1 December 2025, retrieved 18 August 2026).
Chubb Life
- Rating: A (Excellent), as the insurer publishes it, retrieved 14 August 2026
- Agency: A.M. Best
- Outlook: Stable
Chubb Life Insurance New Zealand Limited is the locally incorporated, RBNZ-licensed insurer, and it is rated A (Excellent) by A.M. Best (RBNZ Register of licensed insurers, retrieved 18 August 2026). That rating belongs to the New Zealand entity. It should not be confused with the AA- that S&P assigns to Chubb Insurance New Zealand Limited, which is the general insurer, nor with the parent group's rating. In New Zealand, Chubb Life offers life, trauma, income protection, and disablement cover through advisers, and also sells its Life & Living and Funeral Cover products online direct.
nib New Zealand
- Rating: A (Strong), as the insurer publishes it, retrieved 14 August 2026
- Agency: S&P Global
- Outlook: Stable
nib is an ASX-listed health insurer headquartered in Australia with a significant New Zealand operation. Its A (Strong) rating from S&P reflects sound capitalisation and a well-established market position in both the Australian and NZ health insurance markets. nib offers health insurance alongside life cover options. Rating as published by nib, retrieved 14 August 2026.
Southern Cross
- Entity: Southern Cross Medical Care Society (health insurance)
- Rating: A+ (Strong), as the insurer publishes it, retrieved 14 August 2026
- Agency: S&P Global
- Outlook: Stable
Southern Cross Medical Care Society is New Zealand's largest health insurer and operates as a not-for-profit organisation. Its A+ (Strong) rating from S&P reflects conservative financial management and a dominant market position. Southern Cross is consistently ranked as one of the most trusted insurance brands in New Zealand.
That A+ belongs to the health society and must not be read across to a Southern Cross life policy. Southern Cross Life Insurance and the Life & Living products are promoted and marketed by Southern Cross Insurance Services Limited, and they are underwritten and administered by Chubb Life Insurance New Zealand Limited (Southern Cross Life Insurance, Legal disclosure and About Chubb, both retrieved 8 September 2026). The financial strength grade behind those life, trauma and income protection products is therefore Chubb Life's A (Excellent) from A.M. Best, set out in the Chubb Life section above.
Comparing Ratings Across Agencies
Scales as published: A.M. Best and Fitch, both retrieved 9 September 2026. S&P grades are taken from the New Zealand insurers that publish them, linked in each profile above.
Because different insurers are rated by different agencies, direct comparison requires care. A.M. Best uses a more compressed scale than Fitch or S&P Global, so an A from A.M. Best is roughly equivalent to an AA from Fitch or S&P rather than a letter-for-letter match. Partners Life's A (Excellent) is therefore broadly comparable to the AA-range ratings other New Zealand insurers hold.
| A.M. Best | Fitch | S&P Global | General Meaning |
|---|---|---|---|
| A++ / A+ | AAA | AAA | Highest financial strength |
| A / A- | AA+, AA, AA- | AA+, AA, AA- | Very strong to excellent financial strength |
| B++ / B+ | A+, A, A- | A+, A, A- | Strong to good financial strength |
| B / B- | BBB+, BBB, BBB- | BBB+, BBB, BBB- | Adequate financial strength |
The key takeaway is that A.M. Best uses a more compressed scale than Fitch or S&P. An "A" from A.M. Best is roughly equivalent to an "AA" from Fitch or S&P, not a direct letter-for-letter match. This means Partners Life's A (Excellent) from A.M. Best is broadly comparable to the AA-range ratings that Fitch and S&P assign to other NZ insurers. Compare the published scales directly: A.M. Best and Fitch.
What the RBNZ Requires
The Reserve Bank of New Zealand requires all insurers operating in New Zealand to be licensed under the Insurance (Prudential Supervision) Act 2010. To obtain and maintain a licence, insurers must hold a current financial strength rating from an approved agency and publish it, meet minimum solvency requirements, submit to ongoing supervision, and maintain a fit and proper governance structure.
To obtain and maintain a licence, insurers must:
- Hold a current financial strength rating from an approved rating agency and make it publicly available.
- Meet minimum solvency requirements as set out in the RBNZ's solvency standards.
- Submit to ongoing supervision, including regular reporting on capital adequacy, governance, and risk management.
- Maintain a fit and proper governance structure, including board composition and risk management frameworks.
The requirement for a published financial strength rating is a significant consumer protection measure. It means that every licensed insurer in New Zealand has been independently assessed, and you can check that rating before committing to a policy.
You can verify an insurer's licensing status, and its current financial strength rating, on the RBNZ's Register of licensed insurers.
What Happens If an Insurer Fails?
New Zealand has no statutory insurance guarantee scheme, unlike the UK's Financial Services Compensation Scheme, so no government-backed fund automatically pays claims if an insurer becomes insolvent. Protections instead come from early RBNZ intervention, policyholder priority over general creditors under insolvency law, reinsurance with large global reinsurers, and portfolio transfers of policies to another insurer.
New Zealand does not have a statutory insurance guarantee scheme like some other countries (such as the UK's Financial Services Compensation Scheme). This means there is no government-backed fund that automatically steps in to pay claims if an insurer becomes insolvent.
However, several protections exist:
- RBNZ intervention. The RBNZ has powers to intervene early if an insurer's financial position deteriorates. This can include requiring the insurer to raise additional capital, restricting new business, or facilitating a transfer of policies to another insurer.
- Policyholder priority. Under NZ insolvency law, policyholders have priority over general creditors in the distribution of an insurer's assets.
- Reinsurance. Most NZ insurers reinsure a significant portion of their risk with large global reinsurers. This means that even if the primary insurer fails, the reinsurer may still be obligated to pay claims.
- Portfolio transfer. In practice, when an insurer exits the NZ market or faces financial difficulty, its policies are typically transferred to another insurer. This has occurred several times in the NZ market without policyholders losing cover.
The absence of a guarantee scheme makes choosing a well-rated insurer even more important. Your insurer's financial strength rating is, in practical terms, your first line of defence.
How to Check an Insurer's Rating
Checking a New Zealand insurer's financial strength rating can be done four ways. All RBNZ-licensed insurers must publish their rating, usually in the website footer, on an About Us page, or in product disclosure statements. Ratings can also be searched directly at A.M. Best, Fitch Ratings and S&P Global, checked on the RBNZ register, or confirmed with your adviser. The register itself is the Reserve Bank register of licensed insurers.
- Check the insurer's website. All RBNZ-licensed insurers are required to publish their financial strength rating. It is usually found in the footer, on an "About Us" page, or in product disclosure statements.
- Check the rating agency directly. You can search for ratings on A.M. Best, Fitch Ratings, and S&P Global.
- Check the RBNZ register. The RBNZ's register of licensed insurers includes the current financial strength rating for each insurer.
- Ask your adviser. A good financial adviser will be able to explain the financial strength rating of any insurer they recommend. If you do not have an adviser, QuoteHub can connect you with one.
Should You Choose an Insurer Based on Rating Alone?
Financial strength should not be the only factor when choosing a New Zealand insurer. How reliably the insurer pays claims, product suitability, premium competitiveness including stepped versus level structures, and the quality of adviser support all matter alongside the rating. All major New Zealand insurers currently hold ratings in the A range or above, so the market has no weak option on financial strength.
- Claims performance. How often does the insurer actually pay claims? This is arguably just as important as financial strength. Published rates range from 91% of claims received at AIA in the year to 31 December 2025 (AIA NZ Claims Compass 2025, reported by riskinfonz, 12 May 2026) to 97% at Asteron Life for the year to 30 June 2024 (Asteron Life media release, 11 December 2024). See our comparison of all major NZ life insurers for the full picture.
- Product suitability. Does the insurer offer the specific type of cover you need, with the features and flexibility that match your circumstances?
- Premium competitiveness. What does the cover cost, and what premium structure options are available (stepped vs level)?
- Adviser support. Most NZ life insurance is arranged through financial advisers. The quality of the adviser relationship matters as much as the insurer behind the policy.
The good news is that all major NZ insurers currently hold ratings in the A range or above. This means the NZ market does not have a "bad" option in terms of financial strength. The differences between insurers are more nuanced and depend on your individual situation.
If you are unsure which insurer is the best fit, get a free, no-obligation comparison from QuoteHub. We compare all major NZ insurers and match you with a licensed adviser who can explain the options.
Frequently Asked Questions
What is a good financial strength rating for an insurer?
In the NZ context, any rating in the A range or above from A.M. Best, Fitch, or S&P Global is considered strong. All major NZ life and health insurers currently hold ratings at this level or higher. Ratings of AA or above (Fitch/S&P) or A+/A++ (A.M. Best) indicate very strong to superior financial strength. The bands are defined in the A.M. Best guide and Fitch rating definitions.
Are financial strength ratings the same as credit ratings?
No, though they are related. A credit rating assesses an entity's ability to repay debt. A financial strength rating specifically assesses an insurer's ability to pay policyholder claims. The same agencies often issue both types of rating, but they measure different things.
How often are financial strength ratings updated?
Rating agencies typically review insurer ratings annually, but they can issue interim updates if there is a material change in an insurer's financial position. Ratings also include an "outlook" (typically Stable, Positive, or Negative) that signals the expected direction of future changes.
Can an insurer lose its financial strength rating?
Yes. If an insurer's financial position deteriorates significantly, the rating agency can downgrade its rating. In extreme cases, a rating can be withdrawn entirely. Under RBNZ rules, a licensed insurer that loses its rating must obtain a new one or risk losing its licence to operate in New Zealand.
Does a higher rating mean the insurer is better?
A higher rating means the insurer has a stronger financial position and is more likely to be able to pay claims over the long term. It does not necessarily mean the insurer offers better products, better premiums, or a better claims experience. Financial strength is one important factor among several when choosing an insurer.
Is my money protected if my insurer fails?
New Zealand does not have a government-backed insurance guarantee scheme. However, the RBNZ's prudential supervision framework, policyholder priority in insolvency, and reinsurance arrangements provide significant protections. Choosing a well-rated insurer remains the most effective way to protect yourself.
Disclaimer: Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name. Henry Smith is a Financial Adviser (FSP1010699). The information in this article is general in nature and does not constitute personalised financial advice. Financial strength ratings are current as at the date of publication and are subject to change. Always check the most recent rating with the relevant agency or on the insurer's website. We recommend speaking with a licensed financial adviser before making insurance decisions.
References
- Reserve Bank of New Zealand, Register of licensed insurers
- Asteron Life, media release, 11 December 2024 (claims year to 30 June 2024)
- AIA New Zealand, Claims Compass 2025, reported by riskinfonz (12 May 2026)
- Fidelity Life claims result reported by riskinfonz (1 December 2025)
- Financial Markets Authority (FMA), Insurance guidance
- ACC New Zealand
- Sorted.org.nz, Insurance guides
- Insurance & Financial Services Ombudsman (IFSO)
- MoneyHub NZ, Insurance resources
- ACC New Zealand, What we cover
Read the full insurance guides
Compare your cover with a licensed NZ adviser · free, no obligation.
Explore related pages: Life Insurance, Income Protection, Health Insurance, Trauma Insurance, Compare Insurance NZ.