Reuters: Market News: TEXT-S&P: MetLife Alico Japan assigned 'A+' ratings

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TEXT-S&P: MetLife Alico Japan assigned 'A+' ratings Mar 26th 2012, 04:58 Mon Mar 26, 2012 12:58am EDT -- We have assigned our 'A+' financial strength and long-term counterparty credit ratings and 'A-1' short-term counterparty credit rating to MetLife Alico Life Insurance KK (MetLife Alico Japan). -- The ratings reflect the insurer's strong stand-alone credit profile and its role within American Life Insurance Co. (Alico) and MetLife Inc. (MET). MET acquired Alico in 2010. We view MetLife Alico Japan as a core entity of Alico as well as a strategically important entity of MET, given its large contributions to the MET group and the group's strong commitment to the entity. -- In our view, MetLife Alico Japan has a strong competitive position in the Japanese life insurance market. It has a strong distribution network and good product diversification. It also has strong earnings on relatively low-risk products and adequate capitalization relative to the risks it assumes. -- The positive outlook reflects the possibility that we may come to view MetLife Alico Japan as a core entity of the MET group upon its successful integration into the group. TOKYO (Standard & Poor's) March 26, 2012--Standard & Poor's Ratings Services said today that it has assigned its 'A+' financial strength and long-term counterparty credit ratings and 'A-1' short-term counterparty credit rating to MetLife Alico Life Insurance KK (MetLife Alico Japan). The outlook on the ratings is positive. MetLife Alico Japan will start operations as the Japanese subsidiary of American Life Insurance Co. (Alico; A+/Positive/--) on April 2, 2012. It will take on the insurance policy liabilities of a Japanese branch of Alico by the end of May 2012. The ratings reflect our assumption that MetLife Alico Japan will successfully begin operations on April 2, 2012, and adequate capital will be injected into the new subsidiary by that date. The ratings reflect MetLife Alico Japan's important role within the MET group's international strategy. Based on our group methodology, we view MetLife Alico Japan as a core entity of Alico and a strategically important subsidiary of MetLife Inc. (MET; A-/Negative/A-2). MetLife Alico Japan operates businesses that are integral to the MET group's strategy, and it contributes to the group's sales and earnings. We believe the MET group is strongly committed to Alico, particularly to MetLife Alico Japan as it makes up a significant part of Alico's capital and earnings. This can be seen from the large acquisition costs that the group incurred for Alico; the subsequent strategic restructuring of Alico entities, including MetLife Alico Japan; and the progress made in integrating Alico's key areas, such as investments and enterprise risk management, into the MET group. The ratings on MetLife Alico Japan also reflect the company's strong stand-alone credit profile. In our view, MetLife Alico Japan has a strong competitive position in Japan's life insurance market. It has a diversified distribution network and good product diversification, as well as strong earnings from relatively low-risk products. We also believe that the new subsidiary is likely to be adequately capitalized relative to the risks it assumes. The positive outlook on the ratings on MetLife Alico Japan reflects our expectation that we will consider this subsidiary to be a core entity of the MET group upon its full and successful integration into the group. When that happens, we expect to align the ratings on MetLife Alico Japan with those on the core operating entities of the MET group, which are currently 'AA-'. We revised our outlook on Alico to positive in November 2010 when MET acquired Alico to reflect the possibility that we may view Alico as a core entity of the MET group in a relatively short period (for more details, please see "American Life Insurance Co. Outlook Revised To Positive After Being Acquired By MetLife Inc.," published on Nov. 1, 2010). We will review MetLife Alico Japan's group status, based on the progress of Alico's restructuring and integration into the MET group. If MetLife Alico Japan is fully integrated into the operations of the MET group, leading us to view it as a core entity of the group, we may raise the ratings on MetLife Alico Japan. We may also raise the ratings if we upgrade the core operating entities of the MET group--even if MetLife Alico Japan were to keep its current group status within the MET group. However, the ratings and outlook on MetLife Alico Japan will be constrained by the sovereign ratings on Japan (AA-/Negative/A-1+), given that its operations and asset concentration are in Japan. Conversely, we may downgrade MetLife Alico Japan if we lower the ratings on MET's core operating companies and if MetLife Alico Japan were to keep its current group status within the MET group. RELATED CRITERIA AND RESEARCH Principles Of Credit Ratings, Feb. 16, 2011 General: Interactive Ratings Methodology, April 22, 2009. Group Methodology, April 22, 2009 Link this Share this Digg this Email Reprints

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