A.M. Best Assigns "B++" -Very Good- Rating to Fuji Fire and Marine Insurance Co., Ltd.,.

OLDWICK, N.J.--(BUSINESS WIRE)--Nov. 24, 1998--A.M. Best Co. today assigned a "B++" (Very Good) rating to Fuji Fire & Marine Insurance Co., Ltd., Osaka, Japan.

The rating reflects the company's good capitalization, solid underwriting performance, and substantial market presence among Japanese non-life insurance companies. The rating also acknowledges the company's financial flexibility, with its access to the capital markets and only modest convertible debt outstanding. The company's capitalization, while weaker than its peers in the Japanese non-life market, compares favorably with A.M. Best "B++" rated personal lines companies in the U.S. and other world markets. The company has achieved good underwriting and operating profitability over the past five years as evidenced by its average combined ratio in the high-90s and pretax return on premiums of 4.4%.

Offsetting these positive rating factors are the competitive environment the company faces, which stems from the partial deregulation of the personal lines insurance sector and liberalization of the financial services industry in Japan. However, with a predominantly personal lines book of business, Fuji Fire's operations should be less impacted by deregulation than its peers', as the competition that has developed to date is far more intense in commercial lines. In addition, the company currently is experiencing the adverse effects of declining premium volume and lower investment values -- primarily in its stock and loan portfolios -- due to the weak Japanese economy. Lastly, the company has an above-average dividend payout ratio, which could dampen its surplus generation relative to its peers.

Fuji Fire ranks ninth in size among Japanese non-life companies with $2.8 billion of net premiums written in fiscal 1997, ending March 31, 1998. The company markets a full line of non-life insurance products throughout Japan and, with the changes in Japanese insurance business law in 1996, has established a subsidiary to market life insurance.

A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com.