HONG KONG--(BUSINESS WIRE)--A.M. Best has commented that the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of “aa-” of Sompo Japan Nipponkoa Insurance Inc. (SJNK) (Japan) remain unchanged following its announced sale of Sompo Canopius AG (Canopius) (Switzerland).
This commentary follows SOMPO Holdings, Inc.’s (Sompo) announcement on Sept. 1, 2017, that its wholly owned subsidiary, SJNK, has entered an agreement to sell 100% of its shares in Canopius to Fortuna Holdings Limited, an affiliate of Centerbridge Partners, L.P. (Cayman Islands).
The transaction is subject to regulatory approvals and is expected to close in or after January 2018. The transaction, totaling USD 952.4 million (or about JPY 105.1 billion), is expected to generate a loss of JPY 14 billion (after-tax) to the consolidated financial result of Sompo, but it will have a limited impact on the profitability of SJNK. A.M. Best expects SJNK’s risk-adjusted capitalization to remain supportive of the current ratings, following the transaction’s closing.
SJNK, the major operating entity of Sompo in terms of revenue and earnings contribution, implements the group’s overseas expansion strategies through its wholly owned subsidiary, Sompo International. Sompo International was formed as the global commercial business platform for the group through the restructure of the overseas businesses after the acquisition of Endurance Specialty Holdings Ltd. in March 2017.
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