Why Financial Strength Matters When Choosing an Insurance Provider
When choosing insurance, it’s natural to focus on premiums and policy features. But behind every policy is something just as important – the financial strength of the insurer standing behind it.
At Lifestyle Cover, recommending an insurance provider is never just about the cover and price – it’s also about confidence, stability, and long-term reliability. Because insurance is designed to be there when it matters most, often many years into the future.
What is financial strength and why does it matter?
An insurer’s financial strength reflects its ability to meet claims and obligations over the long term. In simple terms, it’s a measure of how well an insurer is positioned to pay claims – not just today, but into the future.
In New Zealand, licensed insurers are required to publish a Financial Strength Rating from an approved global ratings agency. These ratings provide an independent assessment of an insurer’s financial position, governance, capital reserves and risk management.
A strong rating helps provide confidence that:
- claims can be paid when needed
- the insurer is well managed and financially stable
- long-term cover is backed by solid foundations
Our insurers ratings
Many types of insurance such as life, trauma, total permanent disability (TPD) and income protection are designed to protect people over decades. That long-term nature means it’s not enough for an insurer to be competitive today. They need to be financially resilient over time, through economic cycles, changing claim patterns and evolving regulations.
Financial strength ratings help advisers and clients alike look beyond short-term pricing and focus on sustainability and reliability.
Financial strength ratings are issued by independent international ratings agencies approved by the Reserve Bank of New Zealand (RBNZ), including:
- A.M. Best
- Fitch Ratings
- S&P Global Ratings
These agencies assess insurers using globally recognised frameworks, ensuring consistency and transparency across the industry.
Financial strength is one check but not the only one
A strong rating alone doesn’t make an insurer the “right” choice for everyone.
Our advice considers:
- your personal circumstances
- the type and structure of cover
- affordability and flexibility
- claims definitions and policy wording
- how different covers work together
Financial strength ratings are an important checkpoint but they sit alongside many other considerations that help ensure cover is fit for purpose, not one-size-fits-all. Insurance decisions aren’t just about what’s written in a policy document. They’re about trust, knowing that if support is ever needed, it’s backed by an insurer with the capacity to deliver. That’s why we take the time to look beneath the surface, helping clients understand not just what they’re covered for, but who is standing behind that promise.
Because choosing the right insurer matters just as much as choosing the right cover.