A.M. Best Upgrades Ratings of The Fuji Fire & Marine Insurance Company, Limited

HONG KONG--(BUSINESS WIRE)--A.M. Best Co. has upgraded the financial strength rating to A- (Excellent) from B++ (Good) and the issuer credit rating to “a-” from “bbb+” of The Fuji Fire & Marine Insurance Company, Limited (Fuji) (Japan). Both ratings have been removed from under review with positive implications and assigned a stable outlook.

“Risk Management and the Rating Process for Insurance Companies.”

The ratings reflect Fuji’s favorable risk-adjusted capitalization. The ratings also consider the continued parental support from the American International Group, Inc., in the areas of sales cooperation, underwriting and strategic initiatives.

Fuji’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is adequate and has improved for two consecutive years. In addition, the company’s local solvency margin ratio stood at 628.6% as of September 30, 2011 under the revised standard to be applied from March 31, 2012. Both these indicators are currently supportive of Fuji’s ratings.

Partially offsetting these positive rating factors is Fuji’s low growth momentum and relatively high net underwriting leverage.

Fuji’s market position has deteriorated in the midst of intense competition and premium decline. Over the past two years, its overall market share has declined to 3.8% from 4.0% on a net premium written basis.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Rating Members of Insurance Groups”; “Understanding Universal BCAR”; “Understanding BCAR for Property/Casualty Insurers”; “Catastrophe Analysis in A.M. Best Ratings”; and “Risk Management and the Rating Process for Insurance Companies.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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