AM Best has affirmed South African-owned Youi New Zealand’s B++ financial strength rating and bbb issuer credit rating, with a stable outlook.

“The rating affirmations reflect Youi New Zealand’s strong risk-adjusted capitalisation, resulting from the company’s low underwriting leverage, its prudent reinsurance program and conservative investments,” the ratings agency says.

“In addition, actual claims experience during the company’s first two years of operation has been largely consistent with the assumptions it uses in pricing its policies.”

Negative rating actions may be triggered if Youi’s risk-adjusted materialisation materially declines, AM Best says.

The New Zealand business, established in August 2014, made a loss of 70 million rand ($6.6 million) in the half-year to December 31.