A.M. Best Affirms Ratings of The Fuji Fire & Marine Insurance Company, Limited and AIU Insurance Company, Ltd
February 27 2015 - 12:24PM
Business Wire
A.M. Best has affirmed the financial strength rating of A
(Excellent) and the issuer credit ratings of “a” of The Fuji
Fire & Marine Insurance Company, Limited (Fuji Fire)
(Japan) and AIU Insurance Company, Ltd. (AIU) (Japan). The
two companies plan to merge in the second half of 2015 or later,
pending regulatory approvals; the ultimate parent company of both
companies is American International Group, Inc. (AIG) (New
York, New York, USA) [NYSE: AIG]. The outlook for all ratings is
stable.
Fuji Fire’s risk-adjusted capitalization remained adequate to
support the current ratings owing to the contribution from the
improved net profit. The company has reported an improvement in its
operating performance since being integrated by AIG. The
integration process with AIU and comprehensive restructure in its
operation, driven by the group, led Fuji Fire’s underwriting
results to significantly improve over the past two years.
AIU's ratings reflect its distinctive presence in the Japanese
market as a significant provider of accident and health insurance
(A&H). AIU's retention remained low at approximately 23% over
the past five years ending in 2014, with a significant portion of
risk ceded to the parent company and its affiliates.
Fuji Fire’s and AIU's ratings consider the support from their
parent company, AIG Japan Holdings KK, which is ultimately owned by
AIG, in the areas of reinsurance arrangement, cross-selling
opportunities, risk management and strategic initiatives from
underwriting to claims management that are led by the group.
Negative rating actions could occur if there is a substantial
deterioration in profitability or their risk-adjusted
capitalization. Any favorable rating actions on AIG could put
upward pressure on the companies' ratings.
The methodology used in determining these interactive ratings is
Best’s Credit Rating Methodology, which provides a comprehensive
explanation of A.M. Best’s rating process and contains the
different rating criteria employed in the rating process. Best’s
Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
• Catastrophe Analysis in A.M. Best Ratings
• Rating Members of Insurance Groups
• Risk Management and the Rating Process for Insurance
Companies
• Understanding Universal BCAR
• Evaluating Country Risk
• Understanding BCAR for Property/Casualty Insurers
Ratings are communicated to rated entities prior to publication,
and unless stated otherwise, the ratings were not amended
subsequent to that communication.
This press release relates to rating(s) that have been
published on A.M. Best's website. For all rating information
relating to the release and pertinent disclosures, including
details of the office responsible for issuing each of the
individual ratings referenced in this release, please visit A.M.
Best’s Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2015 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
A.M. BestSeewon Oh, +852-2827-3404Senior Financial
Analystseewon.oh@ambest.comorMoungmo Lee,
+65-6589-8412General Manager,
Analyticsmoungmo.lee@ambest.comorChristopher Sharkey, +(1)
908 439 2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy, +(1) 908
439 2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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