HONG KONG--(BUSINESS WIRE)--#insurance--Fourth paragraph, first sentence of release dated Sept. 2, 2021 should read: SJ has a track record of strong operating performance, mainly supported by its increasing premium income and strong domestic non-life insurance business, which has an average five-year combined ratio of 96.2% (fiscal years 2016-2020), excluding premiums and losses from its compulsory automobile liability insurance (CALI) and household earthquake businesses. (instead of: SJ has a track record of strong operating performance, mainly supported by its increasing premium income and strong domestic non-life insurance business, which has an average five-year combined ratio of 96.2% (fiscal years 2016-2020), excluding premiums and losses from its compulsory automobile liability insurance (CALI) business.)

The updated release reads:

AM BEST AFFIRMS CREDIT RATINGS OF SOMPO JAPAN INSURANCE INC. AND ITS SUBSIDIARIES

AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of �aa-� (Superior) of Sompo Japan Insurance Inc. (SJ) (Japan) and its subsidiaries. The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed list of companies below).

The ratings reflect SJ�s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management (ERM).

SJ�s balance sheet strength assessment reflects the company�s strongest level of risk-adjusted capitalisation, as measured by Best�s Capital Adequacy Ratio (BCAR). While the company�s financial leverage remains conservative with adjusted debt leverage ratios below 25%, the ratio is relatively high compared with most of the major domestic non-life insurers in Japan.

SJ has a track record of strong operating performance, mainly supported by its increasing premium income and strong domestic non-life insurance business, which has an average five-year combined ratio of 96.2% (fiscal years 2016-2020), excluding premiums and losses from its compulsory automobile liability insurance (CALI) and household earthquake businesses. SJ�s domestic non-life underwriting performance improved in fiscal year 2020 with a lower combined ratio, due to less severe domestic natural catastrophe losses and a decrease in incurred losses from auto and personal accident insurance claims during the COVID-19 pandemic. But its overseas business recorded temporary deterioration with a decline in adjusted profit as a result of the COVID-19 pandemic�s adverse impact, despite steady growth in net premium written (NPW).

SJ is the core operating unit of SOMPO Holdings, Inc., (SOMPO Holdings), its ultimate parent and one of the largest non-life insurance groups in Japan. The company maintains a leading market position with approximately a quarter share of the highly consolidated non-life insurance segment in Japan, in terms of NPW. In addition, the company has a growing book of overseas insurance business, which accounted for 25% of its NPW and 20% of adjusted profits in fiscal year 2020.

The stable outlooks reflect AM Best�s expectation that SJ will maintain its overall balance sheet assessment, supported by risk-adjusted capitalisation at the strongest level, as measured by BCAR, while ongoing strategic initiatives should help maintain its strong and consistent operating performance over the intermediate term.

Negative rating actions could occur if there is material deterioration in risk-adjusted capitalisation caused by substantial investment losses or a large-scale natural catastrophe. Negative rating actions could also occur if there is significant deterioration in SOMPO Holdings, Inc.�s credit profile, including its risk-adjusted capitalisation, financial leverage or interest coverage levels.

The FSR of A+ (Superior) and the Long-Term ICRs of �aa-� (Superior) have been affirmed with a stable outlook for the following subsidiaries of Sompo Japan Insurance Inc.:

• Endurance Specialty Insurance Limited
• Endurance Assurance Corporation
• Endurance Worldwide Insurance Limited
• Endurance American Specialty Insurance Company
• Endurance American Insurance Company
• Endurance Risk Solutions Assurance Co.
• American Agri-Business Insurance Company
• Sompo America Insurance Company
• Sompo America Fire & Marine Insurance Company
• Lexon Insurance Company
• Bond Safeguard Insurance Company

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best�s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best�s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best�s Credit Ratings. For information on the proper use of Best�s Credit Ratings, Best�s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best�s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright � 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

Charles Chiang
Associate Financial Analyst
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Christopher Sharkey
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+852 2827 3424
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Jim Peavy
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+1 908 439 2200, ext. 5644
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Clare Finnegan
Senior Financial Analyst
+1 908 439 2200, ext. 5165
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