NU Online News Service, June 2, 2003, 12:55 p.m. EDT – The Tokyo office of Standard & Poor’s Ratings Services has lowered the financial strength ratings of four Japanese life insurers one notch.

S&P lowered the financial strength rating of Nippon Life Insurance Company, Osaka, to A plus, from AA minus.

It lowered the financial strength rating of Nissay Dowa General Insurance Company Ltd., Tokyo, to A plus, from AA minus; of Sumitomo Life Insurance Company, Osaka, to BB plus, from BBB minus; and of Asahi Mutual Life Insurance Company, Tokyo, to CCC minus, from CCC.

S&P says it lowered the ratings of Nippon Life and Nissay Dowa, a unit of Nippon Life, because it believes falling Japanese stock prices will hurt Nippon Life’s capital base.

Nippon Life is still generating underwriting profits, but its business in force fell 3.5% in fiscal year 2002, S&P says.

S&P says it is lowering Sumitomo Life’s rating because of concerns about Sumitomo Life’s capital base and a 15% drop in new business in 2002.

“While Sumitomo Life has achieved some success at reducing its domestic equity holdings, the company lags behind its peers in terms of easing concentration risk from its exposure to banks,” S&P says.

S&P says it is lowering Asahi Life’s rating because Asahi Life, which recently announced plans to skip its 2003 insurance policy dividend payments and defer interest payments on its kikin debt, will probably have a tough time raising the cash it needs to improve its finances.