DPL Insurance to maintain moderate growth, prudent earnings

For fiscal year 2024, its ROE was at 14.3%.

New Zealand-based DPL Insurance’s financial strength is supported by its strongest level of risk-adjusted capitalization as of fiscal 2024, measured by AM Best’s Capital Adequacy Ratio (BCAR). 

The company has demonstrated solid underwriting performance, with a return on equity of 14.3% and a combined ratio of 84.4% in fiscal 2024, consistent with prior years. Investment yields, including gains and losses, were at 4.7% for the year.

DPL benefits from its ownership by Turners Automotive Group Limited, which provides a strong distribution network through its role as the largest retailer of used motor vehicles in New Zealand. 

Despite this, DPL’s business profile is considered limited due to its niche and relatively modest operations. However, its core insurance products, particularly motor mechanical breakdown insurance, have seen stable pricing and loss experience, contributing to DPL’s positive financial performance.

The company’s balance sheet is strengthened by its investment strategy, which is balanced but includes exposure to illiquid assets, such as investment properties. 

However, AM Best notes that a high dividend payout ratio and the significant volume of intangible assets from DPL’s 2017 acquisition of Autosure Insurance partially offset these strengths. 

Nonetheless, AM Best expects DPL to maintain its strong capital position going forward, supported by moderate growth and prudent earnings retention.