TEXT-S&P summary: Sompo Japan Insurance Inc. - Reuters
(The following statement was released by the rating agency)
May 16 -
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Summary analysis -- Sompo Japan Insurance Inc. -------------------- 16-May-2012
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CREDIT RATING: Country: Japan
Local currency A+/Stable/--
Primary SIC: Fire, marine, and
casualty
insurance
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Credit Rating History:
Local currency Foreign currency
22-Feb-2012 A+/-- --/--
16-Apr-2002 AA-/-- --/--
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Rationale
The ratings on Sompo Japan Insurance Inc. (Sompo Japan; A+/Stable/--) reflect its position as a core non-life insurance subsidiary within NKSJ Group and itssolid business franchises in both commercial and individual insurance. The ratings also reflect our expectation of further improvement in its business efficiency in the medium term due to its planned full merger with NIPPONKOA Insurance Co. Ltd. (NIPPONKOA; A+/Stable/--). These strengths are partly offset by the company's capitalization, which is commensurate with the ratings but is also vulnerable to stock market swings, and weaker profitability than international peers in the same rating category.
Standard & Poor's Ratings Services believes that Sompo Japan should be viewedas a "core" entity of NKSJ Group under its group methodology criteria. NKSJ Group began operations on April 1, 2010, following Sompo Japan's business consolidation with NIPPONKOA. NKSJ Group is one of Japan's three mega non-life insurers, with about 25% of the domestic market on a premium income basis (based on the combined stand-alone market share of each of the group's four non-life insurance companies as of March 31, 2011). The group benefits from Sompo Japan's wide network of exclusive, specialized professional agents and NIPPONKOA's financial institution channel, which consists mainly of regional banks. In addition, the domestic life insurance business is also important to the group, and is likely to support the group's business franchise and earnings in the medium term.
Sompo Japan has a strong business franchise in Japan's non-life insurance market, supported by the strong customer base and extensive distribution networks it inherited through the merger of Yasuda Fire & Marine Insurance Co. Ltd. and Nissan Fire & Marine Insurance Co. Ltd. Sompo Japan and NIPPONKOA have been operating separately under a holding company. However, in March 2012, the group announced that both companies would fully merge to form a single company in the first half of fiscal 2014. Sompo Japan and NIPPONKOA have been working toward their integration by sharing some business administration functions. We believe that their merger will further improve the business efficiency of their non-life insurance operations in the medium term.
16 May, 2012
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Source: http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHwsBMJD8-BHS0pirLOvZBxns7vuw&url=http://www.reuters.com/article/2012/05/16/idUSWLB979720120516
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