A.M. Best Affirms Rating of NIPPONKOA Insurance Company

February 26, 2003

A.M. Best Co. announced that it has affirmed the financial strength rating of A (Excellent) of NIPPONKOA Insurance Company, Ltd., Tokyo, with a stable outlook. Best also assigned the company 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,” said Best.

“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,” it continued.

“This 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,” Best concluded.

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