HONG KONG (Press release) – AM Best revised the outlook from negative to stable and confirmed the financial strength rating of A + (superior) and the long term issuer credit rating of “aa-” (superior) of Tokio Marine Pacific Insurance Limited or TMPI (Guam).

The ratings reflect the strength of TMPI’s balance sheet, which AM Best considers to be very strong, as well as its adequate operational performance, neutral business profile and appropriate management of corporate risks. The ratings also recognize the wide range of implicit and explicit support that TMPI receives from its parent company, Tokio Marine & Nichido Fire Insurance Co. Ltd. or TMNF.

The revised outlook primarily reflects the company’s various initiatives to stabilize its credit fundamentals over the past few years, including capital accumulation, a rate hike exercise for the Accident and Health or A&H commercial accounts, the pursuit of ” a more diversified A&H portfolio, as well as underwriting and pricing discipline in the A&H and P&C segments.

TMPI has a history of positive and stable operating performance, although AM Best expects its underwriting margin to remain relatively low due to the A&H orientation of the company and the competition in the market. TMPI recorded a favorable performance in 2020 and in the first half of 2021, mainly due to the decrease in the frequency of medical claims in the context of the Covid-19 pandemic. However, AM Best notes that TMPI’s bottom line will remain subject to external factors over the next several years, such as a potential rebound in medical claims after the pandemic, investment income under pressure in an interest rate environment. low and additional tax obligations.

TMPI’s risk-adjusted capitalization is valued at the highest level, as measured by Best’s capital adequacy ratio. Its absolute capital base remains larger than its domestic peers in Guam, thanks to strong capital and surplus growth over the past 10 years, driven by profit retention. The balance sheet is also supported by its very conservative investment strategy and its low reliance on reinsurance.

TMPI is a wholly owned subsidiary of TMNF and its ultimate parent company, Tokio Marine Holdings, Inc., is one of the largest non-life insurance groups in Japan. The company has a strong presence in Guam’s non-life industry, mainly supported by its dominant position in the A&H segment. Despite a significant drop in revenue following the non-renewal of the GovGuam account in 2020 and 2021, the company’s bonus base remained supported by a significant volume of business from its A&H commercial accounts and the health plan for employees. federal employees the company has grown steadily. in recent years for the diversification of activities.

Negative rating actions could occur if TMPI’s risk-adjusted capitalization declines significantly or if there is a significant decline in A&H business volume or the company’s market share to a level that does not no longer supports the current assessment of the company profile. Negative rating actions may also occur if TMNF support is reduced to an extent that no longer supports the current level of improvement.

AM Best remains the main rating agency for alternative risk transfer entities, with more than 200 such vehicles rated worldwide. For Best’s current credit ratings and independent data on the captive and alternative risk transfer insurance market, visit www.ambest.com/captive

Ratings are communicated to rated entities before their publication. Unless otherwise indicated, the ratings have not been changed as a result of this communication.

This press release concerns credit ratings published on the AM Best website. For all rating information relating to the posting and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this post, see AM Best’s Recent Rating Activity webpage. For more information on the use and limits of credit rating reviews, see Best’s Guide to Credit Ratings. For more information on the proper use of Best Credit Ratings, Best Preliminary Credit Ratings, and AM Best press releases, see the Guide to Appropriate Use of Best Ratings and Reviews.

AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry. Based in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.


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