AUGUST 19, 2015 08:39 AM (EDT)
A.M. Best Places Ratings of Aioi Nissay Dowa Insurance (China) Company Limited Under Review With Negative Implications
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FOR IMMEDIATE RELEASE
HONG KONG - AUGUST 19, 2015 08:39 AM (EDT)
A.M. Best has placed under review with negative implications the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Aioi Nissay Dowa Insurance (China) Company Limited (ADIC) (China).
The under review status reflects the material increases in ADIC's credit and liquidity risks due to losses caused by explosions at the Tianjin port on Aug. 12, 2015. Toyota Motor Corporation, which operates the joint venture Tianjin FAW Toyota Motor Co. Ltd., has been particularly affected since Tianjin is Toyota's largest production base in China. Although the loss survey is ongoing, ADIC is expected to have a sizeable gross loss from the explosions given its exposure to Toyota Motor Corp. The explosions are expected to lead to a significant increase in credit risk related to reinsurance recoveries, as well as to overall liquidity risk. The ratings will remain under review pending further discussion between A.M. Best and ADIC's management regarding measures to restore the company's risk-adjusted capitalization.
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
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