Various Rating Actions Taken On Subsidiaries Of Tokio Marine Nichido Fire Co. Ltd. Following Rating Action On Parent

Stocks and Financial Services Press Releases Tuesday April 17, 2018 17:41
SINGAPORE--17 Apr--S&P Global Ratings

SINGAPORE (S&P Global Ratings) April 17, 2018--S&P Global Ratings said today that it revised the outlook on four Asian subsidiaries of Tokio Marine & Nichido Fire Insurance Co. Ltd. (TMNF) to positive from stable. The four entities are Tokio Marine & Fire Insurance Co. (Hong Kong) Ltd. (TMHK); Tokio Marine & Nichido Fire Insurance Co. (China) Ltd. (TMC); Tokio Marine Newa Insurance Co. Ltd. (TM Newa); and Tokio Marine Insurance Singapore Ltd. (TMIS). We also affirmed our insurer financial strength and issuer credit ratings on these companies. At the same time, we affirmed our insurer financial strength and issuer credit ratings on Tokio Marine Insurance (Thailand) Public Co. Ltd. (TMITH) with a stable outlook (see ratings list below).

Our rating actions follow that on TMNF, the core operating and flagship entity of the wider Tokio Marine Group. On April 16, 2018, we revised our outlook on TMNF to positive from stable and affirmed our 'A+' ratings on the company following a similar sovereign rating action on Japan. The ratings on TMNF are constrained by the long-term sovereign rating because the company's business franchises and asset structures are highly concentrated in Japan.

Our rating actions on the subsidiaries of TMNF reflect that on the parent and did not result from any changes in the credit factors of each insurer.
We revised the outlooks on TMHK, TMC, TM Newa, and TMIS to reflect the outlook on parent TMNF.
We affirmed the ratings on TMHK, TMC, TM Newa, and TMIS to reflect their strategic importance to the Tokio Marine Group.

The financial strength rating on TMIS is one notch higher than the issuer credit rating because of the explicit support by TMNF, which covers all insurance policy obligations. We equalize the financial strength rating on TMIS to that on TMNF to reflect the guarantee from the parent.

The affirmed rating with stable outlook on TMITH reflects the company's material exposure to Thailand-based assets, primarily government bonds and bank deposits, which caps the rating on the insurer at the local currency sovereign rating on Thailand (foreign currency BBB+/Stable/A-2; local currency A-/Stable/A-2).

The positive outlook on TMIS reflects our outlook on the core entities of the Tokio Marine Group. The outlook also reflects our expectation that TMIS will remain a highly strategically important subsidiary of the group, and TMNF will continue to provide explicit support to the company. The financial strength rating and outlook on TMIS will move in tandem with the rating and outlook on TMNF. Nevertheless, we could lower the financial strength rating on TMIS if TMNF decides to withdraw the irrevocable and unconditional guarantee on TMIS' policy obligations.

The positive outlooks on TMHK and TMC reflect our outlook on the core entities of the Tokio Marine Group. The outlook also reflects our expectation that these insurers will remain highly strategically important subsidiaries of the group, and TMNF will continue to provide explicit support to them.

The positive outlook on TM Newa reflects our outlook on the core entities of the Tokio Marine group. The outlook also reflects our expectation that the insurer will remain a strategically important subsidiary of the group. The ratings will move in the same direction as that on TMNF.

The stable outlook on TMITH reflects our expectation that the insurer will maintain its highly strategic role in Tokio Marine Group over the next two years. We may downgrade TMITH if we lower the sovereign local currency rating on Thailand or the ratings on TMNF. We could also lower the rating on TMITH if the company's high strategic importance to the group diminishes substantially, which we view as unlikely over the next two years. We could upgrade TMITH if we raise the sovereign local currency rating on Thailand and the insurer maintains its high strategic importance to the group.


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