A.M. Best Assigns an "A" (Excellent) Rating to Sony Life Insurance Co.OLDWICK, N.J.--(BUSINESS WIRE)--June 11, 1998--A.M. Best Co. today assigned a rating of "A" (Excellent) to Sony Life Insurance Co., Ltd., Tokyo, Japan. The rating reflects the company's financial strength, operating performance and market profile. It also reflects the excellent quality of the company's investment portfolio and position as a strategic subsidiary of Sony Corp., a world-renowned manufacturing and industrial company. In particular, A.M. Best cited Sony Life's "highly effective marketing strategy, through which it has built a sustainable and growing market position in the mature and highly competitive Japanese life insurance industry." According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Teruhisa Amano, an analyst in A.M. Best's International Division, Sony Life has "differentiated itself by distributing its products through a network of what it calls `life planners.'" These life insurance professionals offer an array of insurance products to address the financial goals and needs of the high-income segment of the consumer market. This approach to life insurance distribution-considered highly innovative in Japan - "has been instrumental in Sony Life's achievement of consistent growth on life insurance in force, solid operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before and acceptance in the market," Mr. Amano said. Sony Life's financial position is exceptionally strong. Its capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. , based on Japan's solvency margin standards, is excellent. The company's investment portfolio consists of high-grade Japanese and foreign bonds. Unlike most of the life insurance companies in the market, Sony Life does not hold mortgage loans and real estate in its investment portfolio. Therefore, the company is not exposed to the recent valuation concerns seen in the Japanese market for these investments. Sony Life's operating performance is very favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. when compared to the results of the Japanese life insurance industry. Its surrender, lapse (language) LAPSE - A single assignment language for the Manchester dataflow machine. ["A Single Assignment Language for Data Flow Computing", J.R.W. Glauert, M.Sc Diss, Victoria U Manchester, 1978]. and persistency ratios are much stronger than industry norms, as are its growth in premiums and increase in the insurance in force. A.M. Best considers these results extremely favorable, since they were accomplished during a time period when the Japanese industry has seen a decline in new premiums and only nominal increases in life insurance in force due to declining sales activity and increased cancellations of policies. A.M. Best also noted that Sony Life Insurance Ltd.'s policyholder Policyholder An individual who owns an insurance policy. persistency and agent retention are competitive advantages and important determinants of its strong operating performance and important indication of its success in the Japanese life insurance market. Offsetting these positive attributes are the recent weak economic conditions in Japan, the continuing low interest rate environment, and the ongoing financial regulatory reform Regulatory Reform concerns improvements to the quality of government regulation. At the international level, the "OECD Regulatory Reform Programme is aimed at helping governments improve regulatory quality -- that is, reforming regulations that raise unnecessary obstacles to of the Japanese insurance and 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. industries. These factors have created uncertainty in the market and are reflected in Sony Life's rating. They also are important considerations in A.M. 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. of other life insurers operating in this market. Sony Life is a small company by Japanese market standards; therefore, A.M. Best believes its ability to sustain growth and performance at its current levels could be pressured by erosion of its distinctive advantages through a heightened competition from larger life insurers or from new entrants to the market. A.M. Best, established in 1899, is the oldest insurance rating organization in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and the most widely recognized insurance information source. Ratings are based on a comparison of an insurer's financial strength, operating performance and market profile against A.M. Best's quantitative and qualitative standards. Internationally, A.M. Best's ratings also reflect the macro- and microeconomic mi·cro·ec·o·nom·ics n. (used with a sing. verb) The study of the operations of the components of a national economy, such as individual firms, households, and consumers. situation in the countries in which it operates. The evaluation of market profile encompasses such areas as market risk, competitive market position, specific event risk and the overall spread of insurance risk and other business risks. A.M. Best's evaluation of financial strength includes a comprehensive review of capitalization, leverage, capital structure, asset quality, diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. , reserve adequacy and liquidity. Its analysis of an insurer's operating performance includes an organization's profitability, revenue composition and management's ability to meet its objectives. CONTACT: Jeffrey Dunsavage (908) 439-2200, ext. 5618 dunsavj@ambest.com |
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