Best Affirms Mitsui Sumitomo’s U.S. Subs Ratings; Upgrades Aioi Nissay U.S.

June 3, 2013

In conjunction with its affirmation of the parent company, A.M. Best Co. has also affirmed the financial strength rating (FSR) of ‘A+’ (Superior) and the issuer credit ratings (ICR) of “aa” of Mitsui Sumitomo Insurance Company of America (MSIA) and Mitsui Sumitomo Insurance USA, Inc.(MSU).

Best has also upgraded the FSR to ‘A+’ (Superior) from A (Excellent) and the ICR to “aa” from “a+” of Aioi Nissay Dowa Insurance Company of America (ADIA). All of the above companies are domiciled in New York, NY, and are direct subsidiaries of MSIG Holdings (Americas), Inc. and are ultimately owned by MS&AD Insurance Group Holdings, Inc. (MS&AD) (Japan).

The outlook for all of the ratings is stable.

The ratings of MSIA and MSU, which operate under an intercompany pooling agreement, “largely reflect their strong risk-adjusted capitalization, strategic roles and importance as U.S. domestic insurers within the MS&AD Insurance Group and the benefit of the explicit support provided through internal reinsurance by Mitsui Sumitomo Insurance Company Limited (MSI) (Japan), as well as the implied support from MS&AD,” said Best.

“Although both companies have been embarking on diversification tactics in recent years, MSIA and MSU’s primary mission is to provide insurance to the U.S. business interests of the global clients insured by MSI.

“Similarly, the ratings of ADIA largely recognize its strong risk-adjusted capitalization, its role within the organization and the benefits of implicit and explicit support provided through a comprehensive reinsurance program by Aioi Nissay Dowa Insurance Company Limited (ADI) (Japan). Most insureds of ADIA are ADI clients that have operations in the United States. The rating upgrades of ADIA follow the rating upgrades of ADI.”

In addition Best noted that “given the extent of implied and explicit support embedded in these ratings, any upward or downward movement on the ratings of MSI and ADI would likely influence the ratings of MSIA, MSU and ADIA. Any material changes to the financial condition of MS&AD and/or its commitment in the United States also could cause these ratings to move. In addition, if MSIA, MSU and ADIA’s capitalization or operating performance falls markedly short of A.M. Best’s expectations, negative rating actions could ensue.

Source: A.M. Best

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