A.M. Best Assigns Negative Outlook to ICR and Affirms Ratings of The Fuji Fire & Marine Insurance Company, Limited

OLDWICK, N.J.--(Business Wire)--
A.M. Best Co. has affirmed the financial strength rating (FSR) of B++ (Good) and
issuer credit rating (ICR) of "bbb+" of The Fuji Fire & Marine Insurance
Company, Limited (Fuji Fire) (Japan). The ratings have been removed from under
review with negative implications. The ICR has been assigned a negative outlook
and the FSR a stable outlook.

The negative outlook for the ICR reflects A.M. Best`s concerns about the
company`s capital buffer to absorb any negative impacts due to market
volatility. Moreover, A.M. Best estimates that the capital growth will be slower
going forward.

During fiscal year 2008, the overall combined ratio deteriorated by 3% to 101%.
This is mainly due to the premium rate change of CALI business and the
accelerated payment in motor business. The accelerated payment will be
stabilized. Also, the premium rate of motor business is expected to increase
this fall. The company launched a business plan including JPY 7 billion of cost
reduction by 2010.

Fuji Fire is reducing its risk assets to prevent further deterioration of
capital and surplus, which caused around JPY 90 billion of impairment losses in
fiscal year 2008. Moreover, the hedge options to prevent further significant
losses from securities are still available. These actions eased concerns on
further deterioration on capital, and the company maintained a relatively
favorable solvency margin ratio. As of March 2009, the company`s capital
adequacy measured by local solvency margin was around 506%, which is still
favorable to maintain the ratings.

However, A.M. Best has concerns regarding the relatively large amount of
deferred tax assets (DTA) from investment losses compared to Fuji Fire`s capital
and surplus. Although the equity market indices have bounced back after closing
financial results for fiscal year 2008, A.M. Best is cautious of the company's
investment income due to low interest rates and uncertainty in the market.

For Best`s Credit Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any
additional methodologies and factors that may have been considered, can be found
at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating
organization dedicated to serving the financial and health care service
industries, including insurance companies, banks, hospitals and health care
system providers. For more information, visit www.ambest.com.

A.M. Best Co.
Analysts:
Sanghoon Oh, +852-2827-3413
sanghoon.oh@ambest.com
or
Moungmo Lee, +852-2827-3403
moungmo.lee@ambest.com
or
Public Relations:
Jim Peavy, +1-908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, +1-908-439-2200, ext. 5378
rachelle.morrow@ambest.com

Copyright Business Wire 2009