A.M. Best Affirms Ratings of Meiji Yasuda Life Insurance Company

A.M. Best Asia-Pacific Limited has affirmed the financial strength rating of A+ (Superior) and the issuer credit rating of "aa-" of Meiji Yasuda Life Insurance Company (Meiji Yasuda) (Japan). The outlook for both ratings is stable.

The ratings reflect Meiji Yasuda's strong risk-adjusted capitalization, continuous improvement in operating performance and solid market position in the group life market.

Meiji Yasuda's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), has improved over the past year and remains supportive of the current ratings. The company's adjusted capital and surplus (which includes price fluctuation reserve and contingency reserve) rose 48% in fiscal year 2012 to JPY 3,613 billion as a result of a surge in unrealized gains, a JPY 100 billion increase in foundation funds and continuous accumulation of retained earnings. During fiscal year 2012, Meiji Yasuda's regulatory solvency ratio improved by 181 percentage points to 930% and remained stable at 927% at the end of September 2013.

Meiji Yasuda reported further improvement in its interest profit in fiscal year 2012 as it continued to accumulate additional liability reserve to lower its assumed average interest rate. The company has also managed interest rates and investment risks by limiting the sales volume of single premium products and extending the duration of the bond portfolio.

Partially offsetting these positive rating factors are Meiji Yasuda's exposure to volatile financial markets and a persistently low interest rate environment.

While there is no positive movement in the ratings considered in the short term, the ratings and outlook may come under negative pressure if the company's risk-adjusted capital position and/or operating performance sharply deteriorate due to unfavorable capital market movement.

The methodology used in determining these interactive ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.

A.M. Best Asia-Pacific Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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A.M. Best Asia-Pacific Limited
Irene Chan
Associate Financial Analyst
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Seewon Oh
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Jim Peavy
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