(The following statement was released by the rating agency)
Apr 12 -
Fitch Rating says Mitsui Sumitomo Insurance Co., Ltd's (MSI, rated Insurer Financial
Strength (IFS) 'A+'/Stable) issue of USD1.3bn of subordinated notes in March 2012 improves its
capital buffer after it was adversely impacted by various catastrophic losses, especially the
Thai floods in October 2011.
MSI's USD-denominated notes have a maturity of 60 years with deferral options.
The notes are subordinated to all senior debt of MSI and will rank substantially
pari passu with preferred stock of MSI, if any.
MSI's parent MS&AD Insurance Group Holdings, Inc. (MS&AD) raised its net insured
loss estimates for the Thai floods to JPY236bn in February 2012, of which the
majority are related to MSI, from JPY130bn in November 2011. This represented
11.6% of MS&AD's shareholder's equity plus catastrophe reserves, contingency
reserves and price fluctuation reserves at-end December 2011.
Fitch accords MSI's subordinated notes 100% equity credit for the agency's
internal capitalisation metric. The notes are recognised as capital under the
new calculation regime of the statutory solvency margin effective from end-March
2012. Fitch includes MSI's notes as available capital in its internal capital
adequacy ratio, as under its Insurance Rating Methodology hybrids that are
approved by FSA to be included in regulatory capital count as available capital.
((Bangalore Ratings Team, Hotline:+91 80 4135 5898
Group id: BangaloreRatings@thomsonreuters.com,