Secom General Insurance Co. Ltd.

The stable outlook reflects our view that Secom General will maintain a healthy capital level over the next two years, underpinned by stable profit contributions from the MEDCOM business. It also incorporates our view that the insurer will maintain strategic importance within the Secom group. We may raise the ratings if we revise up Secom General's stand-alone credit profile, because of further improvement in capitalization, and if the Secom group's creditworthiness strengthens. However, the likelihood of an upgrade within the next two years is remote, in our view. We may lower the ratings if Secom General's capital level deteriorates significantly because of, for example, large natural disasters, financial turmoil, or aggressive shareholder rewards. Environmental factors are a moderately negative consideration

...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 Vulnerability of capital and earnings because of relatively high exposures to market risk and risk related to natural catastrophes 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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