S&P Revises Sompo U.S. Outlook to Stable

March 31, 2004

Standard & Poor’s Ratings Services announced that it has revised its outlook on Sompo Japan Insurance Co. of America (SJA; A+/Stable/–) to stable from negative.

S&P said the “outlook revision followed Standard & Poor’s revision of its outlook on SJA’s parent company, Sompo Japan Insurance Inc. (SJI; AA-/Stable/–) to stable from negative, which in turn followed the outlook revision on Japan (AA-/Stable/A-1+) to stable from negative.”

The bulletin indicated that the “ratings on SJA reflect its strategic importance to its parent company, SJI. In addition, SJA benefits from explicit strong support in the form of a net worth maintenance agreement that is enforceable by policyholders. SJA operates in lines of business that are integral to the parent’s global strategy and plays a vital role in providing insurance coverage to SJI’s global Japanese customers in the U.S.

“SJA has an extremely strong capital base, good but limited business position, and strong parental commitment, as demonstrated through multiple capital infusions. Offsetting these positive factors are SJA’s very weak operating performance and unsuccessful expansion in the U.S. domestic market.”

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