Sovereign's financial strength

In times of uncertainty, it's good to know who you can trust. And when you rely on someone to protect your lifestyle, health and savings, you want to be sure they’ll be there when you need them.

Sovereign Assurance COmpany LimitedSovereign’s passion for service excellence, coupled with our financial strength, makes us one of New Zealand’s leading financial services providers. So, even when the times are tough, you can depend on Sovereign.

There when you need us:

  • Our claims history has earned us an A+ (Superior) financial strength rating from A.M. Best* – an approved insurance rating agency for over 100 years. The financial strength rating is an assessment of an insurer’s ability to meet obligations to policyholders.
  • Last year we paid out more life insurance claims than any other New Zealand insurance provider.
  • We test our liquidity every month to ensure we have a strong capacity to meet our claim responsibilities.
  • We have our reinsurance arrangement with the strongest reinsurer in the world, Gen Re, which has the highest financial ratings possible – an A++ rating from A.M. Best and AAA from Standard & Poor’s.
  • We’re part of the ASB Group of Companies, which in turn is part of the Commonwealth Bank of Australia (CBA) Group, one of only 12 banks worldwide with an AA rating or better from Standard & Poor’s.

For more information on A.M. Best, go to: www.ambest.com

A.M. Best Rating scale
Secure Vulnerable
A++, A+ (Superior) B,B- (Fair)
A, A- (Excellent) C++, C+ (Marginal)
B++, B+ (Good) C, C- (Weak)
D (Poor) ​
E (Under Regulatory Supervision) ​
F (In Liquidation) ​
S (Suspended)

Solvency – what it means and why it’s important

As a licensed insurance company in New Zealand, Sovereign is required to meet the Solvency Standard for life insurance business set by the Reserve Bank of New Zealand.

What is the Solvency Standard?

The Solvency Standard sets out the amount of capital a life insurance company is required to hold to meet its long-term liabilities under adverse conditions. These liabilities include insurance claims that the company is expected to pay to its customers.

What is Sovereign’s Solvency Margin?

Sovereign’s solvency position as at 30 June 2017:

NZ $(Millions) Total Sovereign Statutory Fund Other Fund​
Actual Solvency Capital 713.2 601.9 111.3
Solvency Capital required by RBNZ 572.8 482.1 90.7
Solvency Margin 140.4 119.8 20.6
​Solvency Ratio 125% 125% ​123%
Sovereign is holding capital in excess of RBNZ's requirements.

Sovereign Statutory Fund

The ‘Insurance (Prudential Supervision) Act 2010’ has introduced a licensing system to provide greater protection for policyholders, and requires Sovereign to establish and maintain a statutory fund.

What is a statutory fund?

A statutory fund is a fund established by a life insurance company that relates solely to its life insurance business.

What is the purpose of a statutory fund?

The purpose of a statutory fund is to keep the assets and liabilities relating to a company’s life insurance business separate from other accounts, to help ensure that sufficient funds are available to pay customers’ claims.

The assets of a statutory fund benefit from certain protections under the Act, which are designed to protect the interests of the life insurance policyholder.

Why do I need to know about the Sovereign Statutory Fund?

As part of Sovereign’s obligations under the Insurance (Prudential Supervision) Act 2010, we are required to tell all our life insurance policyholders that their policies are linked to the ‘Sovereign Statutory Fund Number 1’.

Questions?

If you have any questions please don’t hesitate to contact your adviser, or the Sovereign Customer Relationship Team on 0800 500 108.

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The information contained on this website is general in nature and is not intended as advice. It may not be relevant to individual circumstances and before making any investment, insurance or financial planning decision; you should consult a professional adviser. Copies of our disclosure statements are available on request, free of charge.