A.M. Best Affirms Rating for NIPPONKOA Co. Ltd.

February 25, 2003

A.M. Best Co. has affirmed the financial strength rating of A (Excellent) of NIPPONKOA Insurance Company, Ltd., Tokyo, with a stable outlook. The company has a financial size category of XV.

The rating reflects the company’s excellent capitalization, strong market presence and effective strategies for competing in a deregulated and competitive financial services marketplace. The company’s capitalization is enhanced by comprehensive reinsurance programs and substantial reserves to protect against catastrophe losses.

Offsetting these positive rating factors is Japan’s intensely competitive non-life insurance marketplace. Deregulation of the insurance industry and liberalization of the financial services industry in general has encouraged consolidation and strong competition in commercial and personal lines.

The competitive environment, combined with Japan’s depressed economy, has resulted in slowed premium growth, reduced underwriting profitability and sharply lower interest and dividend income. These factors will continue to pressure NIPPONKOA’s operating performance in the near to mid term.

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