S&P Lowers Asahi Life; Affrms TokioMarine NichidoFire.Business EditorsTOKYO--(BUSINESS WIRE)--Standard & Poor's Jan. 31, 2002--Standard & Poor's today lowered its insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. financial strength and counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit ratings on Asahi Mutual Life Insurance Co Asahi Mutual Life Insurance Company (朝日生命保険相互会社 Asahi Seimei Hoken Sōgo-kaisha) is a Japanese insurance company. External links
At the same time, Standard & Poor's also affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its double-'A' insurer financial strength and counterparty credit ratings on both Tokio Tokio: see Tokyo, Japan. Marine & Fire Insurance Co. Ltd. and Nichido Fire & Marine Insurance Co. Ltd., and removed the ratings from CreditWatch, where they had been placed on Nov. 14, 2001. The outlooks on the counterparty credit ratings on both Tokio Marine and Nichido Fire are negative. The various rating actions follow an announcement today by Tokio Marine that it will not provide explicit support to Asahi Life, which is facing serious asset quality issues and weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. 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. . Tokio
Marine had announced in November 2001 that it would enter discussions on
providing various types of financial and business support to Asahi Life,
including:
-- The possible provision of "kikin" funding, a type of subordinated debt unique to Japanese mutual life insurers; and -- The possible transfer of Asahi Life's new business franchise to Tokio Marine's fully owned life insurance subsidiary, Tokio Marine Life Insurance Co. Ltd, and a possible subsequent merger of the two entities. The downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. of Asahi Life reflects increased concerns over the company's asset quality, and the potential for higher surrender activity in the absence of immediate financial support from Tokio Marine. Asahi's asset quality remains extremely weak, as indicated by significant unrealized losses Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on its investment portfolio-including a JPY JPY In currencies, this is the abbreviation for the Japanese Yen. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 502 billion unrealized loss in its domestic equity portfolio alone as of September 2001 -- which has significantly weakened its capitalization. Asahi Life has been striving to reduce its level of risk-based assets and to implement various initiatives to maintain its business position. However, it has become more challenging for the insurer to improve its financial profile in the short term amid unfavorable market conditions in the Japanese life insurance industry. Moreover, given the status of the company as a mutual life insurer, Asahi Life's financial flexibility is declining, and the company has limited options for receiving financial support from external parties to offset its sizable siz·a·ble also size·a·ble adj. Of considerable size; fairly large. siz a·ble·ness n. unrealized losses. Although Asahi Life
remains a member of Millea Insurance Group-which includes Tokio Marine,
Nichido Fire, and Kyoei Mutual Fire & Marine Insurance Co.
(BBB-/Developing/--) -- it is now very uncertain whether the company
will be able to both proceed with its demutalization process, scheduled
for around 2004, and execute significant balance sheet restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). .The affirmations of the ratings on Tokio Marine and Nichido Fire, which will create a joint holding company in April 2002 as part of plans to form the Millea Insurance Group, are based on the confirmation that both companies strong financial and operational profiles will be maintained following Tokio Marine's decision not to provide explicit support to Asahi Life. Outlooks: Negative The outlooks on all three insurers are negative. The negative outlook on Asahi Life reflects the company's weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak en·er n. asset
quality and capitalization, and the limited prospects for the company to
improve its financial profile in the near term amid intensifying in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: competition and unfavorable market conditions in the domestic life insurance industry. The negative outlooks on both Tokio Marine and Nichido Fire reflect continuing concerns over their earnings prospects amid intensifying competition in the Japanese nonlife sector. However, both Tokio Marine and Nichido Fire maintain very strong balance sheets compared with their major peers, which should limit the impact of adverse market conditions on their financial performance to some extent. RATINGS LOWERED AND REMOVED FROM CREDITWATCH Asahi Mutual Life Insurance Co. Counterparty credit rtg B-/Negative Financial strength rtg B- RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH Tokio Marine & Fire Insurance Co. Ltd. Counterparty credit rtg AA/Negative Fincl strength rtg AA First Chicago Tokio Marine Financial Products Ltd. Counterparty credit rtg AA/Negative Tokio Marine & Fire Insurance Co. (HK) Ltd. Fincl strength rtg AA Tokio Marine & Fire Insurance Co. (UK) Ltd. Counterparty credit rtg AA/Negative Fincl strength rtg AA Tokio Marine & Fire Insurance Co. Ltd. (New Zealand Branch) Fincl strength rtg AA Tokio Marine & Fire Insurance Co. Ltd. U.S. Branch Fincl strength rtg AA Tokio Marine Global Re Ltd. Counterparty credit rtg AA/Negative Fincl strength rtg AA Tokio Marine Life Insurance Co. Ltd. Counterparty credit rtg AA/Negative Fincl strength rtg AA Tokio Millennium Re Ltd. Counterparty credit rtg AA/Negative Fincl strength rtg AA Nichido Fire & Marine Insurance Co. Ltd. Counterparty credit rtg AA/Negative Fincl strength rtg AA Nichido Fire & Marine Insurance Co. Ltd. (US Branch) Fincl strength rtg AA Copyright 2002, Standard & Poor's Ratings Services Ratings Service A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends. |
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