Press Release - OCTOBER 04, 2019

AM Best Comments on Credit Ratings of Tokio Marine Holdings’ Subs After Announced Acquisition of Privilege Underwriters, Inc.


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 Maggie Wu
Associate Financial Analyst
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maggie.wu@ambest.com

Jason Shum
Associate Director, Analytics
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Christopher Sharkey
Manager, Public Relations
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Jim Peavy
Director, Public Relations
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FOR IMMEDIATE RELEASE

HONG KONG - OCTOBER 04, 2019
AM Best has commented that the Financial Strength Rating of A++ (Superior) and the Long-Term Issuer Credit Ratings of “aa+” of Tokio Marine & Nichido Fire Insurance Co., Ltd. (TMNF) (Japan) and its U.S. subsidiaries remain unchanged following an acquisition announcement by their parent company, Tokio Marine Holdings Inc. (TMH). The outlook of these Credit Ratings (ratings) remains stable.

This comment follows the announcement that TMH has entered into a definitive agreement to acquire Privilege Underwriters, Inc. (PUI) and its subsidiaries, which includes PURE Risk Management LLC and PURE Insurance Company (PIC). PURE Risk Management LLC is the attorney-in-fact for Privilege Underwriters Reciprocal Exchange (PURE). PURE is a member-owned reciprocal exchange serving the personal insurance needs of high-net-worth individuals and families across the United States. PIC provides reinsurance to PURE. TMH will acquire PUI for USD 3.1 billion, which will be financed through a combination of existing resources and a potential subordinated bond issue. This transaction is expected to close in the first quarter of 2020, subject to regulatory approvals.

The acquisition is in line with Tokio Marine Group’s long-term strategy, the key focus of which is to expand the scale and profitability of its international business in developed and developing markets.

AM Best does not expect a material deterioration in TMNF’s consolidated risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), financial leverage or its liquidity on completion of the acquisition. AM Best will closely monitor the progression of the acquisition and its impact on TMNF’s rating fundamentals.

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 Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency and information provider with an exclusive focus on the insurance industry.


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