Outlook on Fuji Fire Revised

July 18, 2002

Standard & Poor’s revised the outlook on its “BBB” long-term rating on Fuji Fire & Marine Insurance Co. to stable from negative, based on the insurer’s relatively strong capitalization, more focused corporate strategy, and enhanced financial flexibility supported by its new joint-largest shareholders, ORIX Corp. and the AIG group.

Constraining factors on the rating include Fuji Fire’s weakened market position as a result of industry consolidation and competition, and its lackluster underwriting performance due to business concentration on auto insurance and geographically in western Japan.

Fuji Fire, under new management, intends to implement a revised business plan intended to restore its pressured profitability, while achieving a more focused business mix in retail and small to midsize corporate markets.

Despite relatively large investment losses in fiscal 2001 (ended March 31, 2002), Fuji Fire’s capitalization is relatively strong, thanks to a capital injection of JPY34.4 billion from ORIX and AIG group in March 2002.

ORIX and the AIG group are now the joint-largest shareholders of Fuji Fire, each owning 22.14 percent of the company.

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