A.M. Best Affirms Rating of Tokio Marine & Fire.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--May 21, 2001

A.M. Best Co. has affirmed the A++ (Superior) financial strength rating of The Tokio Marine & Fire Insurance Company, Ltd., Tokyo, and its U.S. branch in New York, New York. The company has been assigned a financial size category of XV.

The rating reflects the company's superior capitalization, strong market leadership and diversified strategies for competing in a deregulated and highly competitive financial services marketplace. It also recognizes Tokio Marine's innovative product development, cost efficient operations, excellent claims servicing capabilities and strong agent and customer loyalty. Tokio Marine's net premium leverage ratios of 0.4x surplus at fiscal year-end 1999 (ending March 31, 2000)--with surplus adjusted for unrealized gains and contingency reserves--rank first among the 14 listed primary Japanese non-life companies. The premium leverage ratios are superior to most insurers in the United States and other world markets with a similar business profile and comparable size. As measured by the recently revised solvency margin ratio capitalization standard in Japan, its ratio of 2,037% at fiscal year-end 1999 was by far the highest among its peer companies. Tokio Marine's capitalization is enhanced by its financial flexibility, along with access to capital markets and modest outstanding debt. Additionally, it is strengthened by extensive reinsurance coverage, exchange of catastrophe risks and substantial reserves to protect against catastrophe losses.

Partially offsetting these positive rating factors is the intensely competitive non-life insurance marketplace in Japan. This stems from the deregulation of the insurance industry, liberalization of the financial services industry in general and the entry of foreign companies and companies from other industries into the market. The competitive environment, combined with the currently depressed Japanese economy, have resulted in slowed premium growth, decreased dividend and interest income and reduced underwriting profitability. While these weakened fundamentals likely will result in continued pressure on Tokio Marine's operating performance in the near term, it has developed diversified strategies for improving future premium growth and profitability. These strategies include merging or forming alliances with other major insurers and financial services companies, as well as strengthening internal operating systems.

In September 2000, Tokio Marine, Nichido Fire and Marine Insurance Company, Ltd. and Asahi Mutual Life Insurance Company announced the formation of a new insurance group--Millea Insurance Group--along with a holding company to fully integrate their non-life and life insurance businesses. In March 2001, Kyoei Mutual Fire and Marine Insurance Company announced that it would also join the Millea Insurance Group.

Tokio Marine presently is the oldest and largest non-life insurance company in Japan in terms of net premiums written and surplus. Established in 1879, it has maintained its market leadership since its inception and is well known and highly regarded as an insurer throughout the world. In addition to a dominant personal lines customer base, its clients include financial, industrial, service and trading companies. As part of its global strategy, Tokio Marine continues to emphasize its international operations and has developed a strong base in Asia through a strategically located network of branches, representative offices and underwriting agencies.

For the full report, which includes the four companies' integration plan, please visit www.ambest.com/news/tokio.pdf.

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 www.ambest.com.