S&P Upgrades Nisshin Fire to ‘BBB’; Outlook Positive

September 16, 2004

Standard & Poor’s Ratings Services announced that it has raised its financial strength and long-term counterparty ratings on Japan’s Nisshin Fire & Marine Insurance Co. Ltd. to “BBB” from “BBB-“, reflecting “steady progress as scheduled in a business and capital tie-up with Tokio Marine & Fire Insurance Co. Ltd. (AA-/Stable/–). The outlook on the ratings is positive.”

S&P noted: “Tokio Marine, which is scheduled to acquire about one-third of the outstanding shares of Nisshin Fire by the end of March 2005, is already the largest shareholder, with 10.6 percent as of March 31, 2004. Although Nisshin Fire has a relatively strong and stable financial profile, its business franchise has been relatively weak.

“The tie-up with Tokio Marine, one of the leading insurance companies in Japan, should help improve Nisshin Fire’s business franchise. The tie-up is also likely to have positive effects on Nisshin Fire’s differentiation strategy, including expansion of its distribution channels through small to medium-sized agencies.

“A further upgrade of the ratings would depend on the completion of the capital tie-up between Nisshin Fire and Tokio Marine as scheduled, after Tokio Marine merges with Nichido Fire & Marine Insurance Co. Ltd. (AA-/Stable/–), scheduled for October 2004. An upgrade would also require further concrete results flowing from the tie-up with Tokio Marine and its differentiation strategy.”

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