AM Best has lowered its credit rating for New Zealand niche insurer Consumer Insurance Services.

The BBB rating, while stable, is a result of a significant dividend payout in the first quarter of this year which reduced the company’s solvency margin level.

A solvency margin level is similar to a capital adequacy requirement for banks.

Given the volume of risks Consumer Insurance Services underwrites and retains, its capital requirements are relatively modest, the ratings agency says.