FITCH PUTS TOKIO MARINE & NICHIDO FIRE ON NEGATIVE OUTLOOK

Rating agency Fitch has revised to negative its outlook on Japanese big three insurer Tokio Marine & Nichido Fire, while affirming its Insurer Financial Strength rating at 'AA-'. Fitch believes that the rating of Tokio Marine's holding company parent "should continue to be capped by the creditworthiness of Japan over the foreseeable future". Fitch noted that Tokio Marine had "substantial exposure to the Japanese government such as JGB Holdings, of about ¥5trn ($61.4bn)". This compares with a group capitalization of about ¥3trn. Fitch acknowledged that Tokio Marine & Nichido Fire had overall robust insurance underwriting fundamentals in both non-life and life, and that capitalization remained strong, "despite a weak domestic equity market in Financial Year 2010 and insured losses from the March earthquake". Its domestic life and non-life businesses are profitable and growing. Fitch said that it does not expect significant deterioration in the insurer's business profile and performance. But its rating could be downgraded if Japan's long-term Local Currency Issuer Default Rating – which Fitch moved to a Negative Outlook on May 27 – were to be downgraded.