A.M. Best Affirms Credit Ratings of Tokio Marine & Nichido Fire Insurance Co., Ltd. and Its U.S. Subsidiaries
The ratings reflect TMNF’s balance sheet strength, which
TMNF's balance sheet strength is due in part to its risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). This is supported by a large adjusted capital base, which consists of reported capital, catastrophe loss reserves and price fluctuation reserves. While TMNF's underwriting leverage is considered conservative, the major strain on TMNF’s BCAR score stems from its investment allocation. Nevertheless, the company has maintained a significant amount of adjusted capital relative to the equity price risk associated with such securities.
Despite the impact of natural catastrophes and some large losses, TMNF has continued to generate positive operating profits for fiscal-year 2018. This is underpinned by a solid underwriting margin within its domestic non-life business and a stable stream of interest and dividend income from its investment portfolio. While operating performance deteriorated in the fiscal year ended
TMNF is a major non-life insurer in
The stable outlooks reflect A.M. Best’s view that TMNF will continue to maintain strong business trends in its domestic non-life business, as well as developing its overseas insurance business in a prudent manner. Negative rating actions could occur if there is a material decline in TMNF’s risk-adjusted capitalization due to a consistent deterioration in the company’s operating performance or a negative impact from large-scale catastrophe events.
The ratings of TMPI reflect its balance sheet strength, which
TMPI holds a very strong balance sheet consisting of high quality assets and a conservative investment portfolio. Capital and surplus grew steadily and organically in the past 10 years from consistently positive profit retention under a low operating expense structure. Despite its relatively high underwriting leverage, TMPI maintains a low product risk profile, as the majority of the company’s revenue comes from short-tailed group accident and health (A&H) products with high-frequency, low-severity claims. The company holds a solid leading position in Guam’s A&H market through a strong distribution partnership with its exclusive managing general agent, Calvo’s Insurance Underwriters. In addition, TMPI receives various support from TMNF and its affiliates including brand recognition, capital, reinsurance, risk management and operational support.
Offsetting rating factors include TMPI’s concentration risk in the A&H business line, in particular with the
While positive rating actions are unlikely in the near term, negative rating actions could occur if there is significant deterioration in the company’s operating performance or a material decline in its risk-adjusted capitalization. Negative rating actions could also occur if there is a material decline in the company’s A&H profitability or market share in
The FSR of A++ (Superior) and the Long-Term ICRs of “aa+”, each with a stable outlook, have been affirmed for the following subsidiaries of
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Tokio Marine America Insurance Company -
Trans Pacific Insurance Company -
TM Specialty Insurance Company -
TNUS Insurance Company
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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