A.M. Best Assigns Rating to Nichido Fire and Marine Insurance Company, Ltd.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 13, 2003 A.M. Best Co. has assigned an initial financial strength rating of A+ (Superior) to The Nichido Fire and Marine Insurance Company, Ltd., Tokyo, Japan, with a negative outlook. The company has a financial size category of XV. The rating reflects the company's superior stand-alone capitalization, strong market presence and historically sound operating profitability. The rating also recognizes the strategic benefits the company derives from its close operating relationship with the Japanese non-life insurance market leader, Tokio Marine & Fire Insurance Company, under Millea Holdings Millea Holdings, Inc. (株式会社ミレアホールディングス , Inc. Nichido Fire's capitalization is enhanced by its modest outstanding debt, extensive reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. coverage and substantial reserves to protect against catastrophe losses. The rating also applies to the company's U.S. branch. Partially offsetting these positive rating factors is Japan's intensely competitive non-life insurance marketplace, which stems from 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. of the insurance industry 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 in general. Japan's competitive environment, combined with the depressed economy, has resulted in slowed premium growth, sharply decreased dividend and interest income and weak underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. profitability. These environmental factors will continue to place pressure on Nichido Fire's operating performance in the near term. In response to these pressures and in efforts to boost profitability and capital efficiency, Nichido and Tokio Marine plan to merge their life insurance subsidiaries and many overseas operations in 2003 and have discussed merging their domestic non-life insurance operations. 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. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion