The ratings reflect Nissay's adequate capitalization level, improving operating performance and diversified distribution channels. Nissay strengthened its capitalization in fiscal year 2011 with an increase in its foundation fund by
In fiscal year 2011, strong sales of the single premium whole life product has led to roughly a 30 percent sales growth in the bancassurance channel, which resulted in an increase in Nissay's bancassurance channel market share without the compensation of profitability.
The continued low levels of interest rates could weigh on Nissay's investment returns given the large proportion of fixed income assets in its investment portfolio.
Partially offsetting these positive rating factors are the persistently low interest rate environment and Nissay's high exposure to the fluctuating stock market.
Positive ratings actions could occur if Nissay shows a significant improvement in its risk capitalization and/or operating performance. Conversely, negative rating actions may occur if there is material deterioration in the company's risk-adjusted capital position and/or operating performance.
The rating affirmations for NLB reflect the operational and financial support it receives from Nissay, its continued favorable financial results, established niche in the U.S. Asian (Japanese and Korean) markets and its solid risk-adjusted capital position. Additionally, NLB successfully completed the transition of its business to
NLB primarily markets group medical products to the U.S. operations of Japanese companies as well as other companies in
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides an explanation of
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