A.M. Best Affirms Ratings of NIPPONKOA Insurance Company Limited; Assigns Issuer Credit Rating.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and assigned an issuer credit rating of "a+" of NIPPONKOA Insurance Company Limited (Nipponkoa) (Japan). The outlook for both ratings is stable. The ratings reflect Nipponkoa's solid market profile, growth in risk-adjusted capitalization and expansion of distribution channels. Nipponkoa is one of the five largest general insurers in Japan with a market share of about 10% in terms of direct premiums written as of fiscal year 2004. The company has maintained a stable market share in the past four years. Synergies created through mergers, acquisitions (such as Sonpo 24) and distribution arrangements with financial institutions (such as Meiji Yasuda Life) are expected to strengthen Nipponkoa's operating efficiency going forward. Nipponkoa is prudently capitalized, with the 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 improving from 996.4% in fiscal year 2004 to 1,015% at September 30, 2005. 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, also demonstrates the company's strong capital position. These attributes are partially offset by Nipponkoa's exposure to the volatility in the equity market, relative dependency upon maturity refund type business and intensified competition in the Japanese non-life industry. The company has a relatively high exposure in the equity market with about 30% of investments allocated in equity assets as of September 30, 2005. The equity portfolio is geared toward a heavier weighting in the financial sector. Although Nipponkoa has made an effort in reducing its stock holdings, volatility in the stock market remains a concern. The competition in Japan's non-life insurance market remains competitive 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. For Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. 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. |
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