A.M. Best Downgrades Rating of Meiji Life Insurance Company.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Jan. 22, 2003 A.M. Best Co. has downgraded the financial strength rating to A (Excellent) from A+ (Superior) of Meiji Life Insurance Company, Tokyo. The company has a financial size category of XV. The outlook is negative. The rating reflects Meiji Life's strong market presence. It also recognizes the company's innovative product development capability, its cost efficient operations and customer loyalty in its individual life product line. It is also buffered by the company's substantial contingency reserves. Meiji Life's 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. is enhanced by its ability to tap into the resources of companies within the Mitsubishi group. Offsetting these positive rating factors is Japan's intensely competitive life insurance marketplace, stemming 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, along with the entry of foreign companies into the market. Cancellations due to recessionary economic conditions, along with a competitive environment and the currently depressed economy, have resulted in slowed new premium growth, reduced 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 and sharply decreased dividend and interest income. Another offsetting factor is the increasing susceptibility susceptibility the state of being susceptible. Refers usually to infectious disease but may be to physical factors such as wetting or to psychological factors such as harassment. to the weak banking sector as well as the weak financial market in general. Although the close relationship with the banking sector has helped Meiji Life in raising foundation funds in the past, the weak banking sector could inevitably hurt the quality of Meiji Life's investments by adversely impacting its investment portfolio. The company also has significant currency exposure on its books. A sharp appreciation of the Japanese Yen “Yen” redirects here. For the other use, see Yen (disambiguation). “JPY” redirects here. For the Australian singer with the same moniker, see John Paul Young. could adversely affect the company. While these weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. fundamentals could likely result in continued pressure on Meiji Life's operating performance in the near term, the company has developed diversified strategies for improving its future premium growth and achieving profitability. These strategies include new product offerings, various alliances with other insurers and financial services companies in the individual pension and asset management areas, as well as expansion into the overseas markets, particularly in Asia and third sector health insurance business. 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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