A.M. Best Affirms Rating of NIPPONKOA Insurance Company Ltd.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A (Excellent) of NIPPONKOA Insurance Company Ltd. (Nipponkoa) (Japan). The outlook is stable. The rating reflects the company's strong business profile, moderate risk-adjusted capitalization and improved operating results. The rating also recognizes the success in the company's market strategies through effective distribution arrangements with major life insurers and the establishment of a direct distribution channel, Sonpo 24. Nipponkoa is one of the five largest general insurers in Japan with a market share of 10% in terms of net premiums written as of fiscal year 2003. The alliance with Meiji Yasuda Life and the recent establishment of Sonpo 24 will provide Nipponkoa with new distribution opportunities to complement existing distribution capability. The Best's Capital Adequacy Ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. (BCAR BCAR Brunswick County Association of Realtors BCAR British Civil Airworthiness Requirements BCAR Bullitt County Animal Rescue (Shepherdsville, KY) BCAR Business Case Analysis Report BCAR Beaver Creek Array BCAR Buffalo Civic Auto Ramps, Inc. ), which measures capitalization on a risk-adjusted basis, indicates that Nipponkoa is prudently capitalized as of fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. 2003. The company's local solvency ratio Solvency Ratio One of many ratios used to gauge a company's ability to meet long-term obligations. Notes: Derived by taking a company's net worth and dividing by total assets. See also: Asset, Asset Valuation, Balance Sheet, Fundamental Analysis, Income Statement also improved from 840.5% in fiscal year 2002 to 996.4% in fiscal year 2003. These factors are partially offset by a relatively high expense ratio, intensified competition in the Japanese non-life market and vulnerability of the local equity market. Nipponkoa's expense ratio remains relatively high among the major non-life insurers in Japan. Although the loss ratio showed a slight improvement, the combined ratios remained somewhat high in fiscal year 2003. Nipponkoa's asset portfolios have a relatively high concentration on domestic equities. Although the company benefits from the recovery in Japanese equities, vulnerability to the equity market remains a considerable risk factor to the company. Other offsetting factors include Japan's competitive non-life insurance marketplace due to the deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. and liberalization lib·er·al·ize v. lib·er·al·ized, lib·er·al·iz·ing, lib·er·al·iz·es v.tr. To make liberal or more liberal: "Our standards of private conduct have been greatly liberalized . . . of the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industry as well as the entry of foreign companies into the market. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. |
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