Secom General Insurance Co. Ltd.

The positive outlook reflects our view that there is at least a one in three chance that Secom General will likely further strengthen its capital base through retained earnings in next two years, underpinned by stable growth for the MEDCOM cancer insurance business. The outlook also incorporates our view that the insurer will maintain its strategic importance within the Secom group, its parent. We may raise the ratings if we come to believe that Secom General has successfully strengthened and stabilized its capital by further accumulating retained earnings. We may revise downward to stable the outlooks if Secom General's accumulates retained earnings slower than we expect, because of large natural disasters or a financial market crash. Insurers Rating Methodology, July

...Key strengths Key risks Differentiation from peers through use of its parent's agency-led sales distribution channels and the bundling of discounted insurance premiums with its parent's security services A relatively large amount of risk related to natural catastrophes and market risk such as equity, which make capital and earnings vulnerable Solid sales of a cancer insurance product, MEDCOM, which supports diversification of its business lines The small size of its business, which makes its expense ratio higher than the peers...

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