A.M. Best Lowers Rating of Unum Japan Accident Insurance Company, Ltd.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 19, 2003 A.M. Best Co. has lowered the financial strength rating to A- (Excellent) from A (Excellent) of Unum Japan Accident Insurance Company, Ltd., Tokyo, Japan, and placed the rating under review with negative implications. The company has a financial size category of V. The rating reflects the company's excellent growth opportunities in the Japanese long-term disability insurance market and the strategic importance of the operation to the company's parent, UnumProvident Corporation. The rating also recognizes UnumProvident's commitment to Unum Japan and the support it provides in 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. , management, capitalization and 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. . While disability products remain under-appreciated in Japan, the company is experiencing strong sales results, and Unum Japan's ongoing marketing and product development efforts in affiliation with several large life and non-life insurers should promote sales going forward. As the initiator of the disability market in Japan and a subsidiary of the leading U.S. disability underwriter underwriter n. a company or person which/who underwrites an insurance policy, issue of corporate securities, business, or project. (See: underwrite) UNDERWRITER, insurances. One who signs a policy of insurance, by which he becomes an insurer. , Unum Japan is positioned to benefit as the market grows. Offsetting factors include Japan's continuing recession and the company's limited distribution network and small scale of operations. Several years of slow or negative economic growth, high unemployment and erosion of discretionary income Discretionary Income The amount of an individual's income available for spending after the essentials have been taken care of. Notes: Essentials are things like food, clothing, and shelter. in Japan has restrained demand for the company's products. Furthermore, 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. has opened the market to other insurers, and Unum Japan's success has attracted several large potential competitors whose full-scale entry into the market may further limit the company's future growth and returns. Japan's 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. Agency's recent decision to penalize pe·nal·ize tr.v. pe·nal·ized, pe·nal·iz·ing, pe·nal·iz·es 1. To subject to a penalty, especially for infringement of a law or official regulation. See Synonyms at punish. 2. the company exacerbates this position. A.M. Best will closely monitor developments in this regard. 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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