S&P Rates Tokio Marine (Singapore) ‘A+’

July 2, 2004

Standard & Poor’s Ratings Services announced that it has assigned its ‘A+’ long-term counterparty credit and insurer financial strength ratings to Tokio Marine & Fire Insurance Co. (Singapore) Pte. Ltd. (TMS), with a stable outlook.

“The ratings are based on the company’s strong financial profile characterized by its stable underwriting profitability, robust capitalization, and sound balance sheet structure, as well as its solid franchise as one of the top three marine cargo insurers in the Singapore nonlife insurance market,” S&P said. “The ratings also reflect the strategic importance of the company to the overall Millea Holdings Group, where Japan’s largest nonlife insurer, Tokio Marine & Fire Insurance Co. Ltd. (TMJ; AA-/Stable/–), is a core operating entity.”

S&P credit analyst WeeKiat Sim, an associate in the Financial Services Ratings Group, commented: “In the near term, the underwriting and overall earnings of TMS are expected to be supported by the gradually improving economic conditions in Singapore and the company’s diversification away from its predominantly Japanese business. The company’s earnings will, to some extent, depend on its success in growing its non-Japanese business.”

S&P noted that “moderating these strengths are the company’s small absolute size in terms of assets and capital within the Singapore nonlife insurance industry, and its concentration in the Japanese-based nonlife market, which has limited growth prospects.”

“The stable outlook on TMS takes into consideration the expectation that the company’s strong business profile and market position will enable the company to maintain stable underwriting profitability,” Sim continued.

However, S&P indicated that “the company’s efforts to reduce its focus on the Japanese business gradually and increase its non-Japanese business are likely to subject TMS to the keen competition within the Singapore nonlife market. Nevertheless, this will be partly mitigated by the company’s continued focus on prudent underwriting practices and its traditional strengths in the marine cargo and property lines.”

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