Beneficial Insurance boasts 36.1% return on equity

Beneficial’s risk-adjusted capitalisation was strongest level as of 31 March.

New Zealand-based Beneficial Insurance Limited (New Zealand) held an adequate balance sheet strength, strong operating performance, limited business profile, and appropriate enterprise risk management, according to AM Best.

As of 31 March, Beneficial’s risk-adjusted capitalisation was at the strongest level, according to Best’s Capital Adequacy Ratio (BCAR).

This was due to moderate underwriting leverage and a conservative investment strategy. The company’s capital base, though small, is supported by retained earnings but is vulnerable to volatility in stress scenarios.

AM Best also took into account the neutral holding company impact from Beneficial Holdings Limited, the parent company.

Beneficial reported a return-on-equity of 36.1% for fiscal 2024, driven by strong performance in its core pet insurance portfolio.

AM Best expects the company to maintain solid profitability through low loss ratios and positive investment returns.

However, the company’s business profile remains limited due to its small scale and focus on pet insurance in New Zealand, where it holds a niche but small market share in the general insurance sector.

The product risk is considered low due to the nature of pet insurance, which is less exposed to large losses and catastrophe events.