AM BEST AFFIRMS CREDIT RATINGS OF NIPPON LIFE INSURANCE COMPANY AND ITS SUBSIDIARY
HONG KONG, Jan 24 (Bernama-BUSINESS WIRE) -- AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa-” (Superior) of Nippon Life Insurance Company (Nissay) (Japan). Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Nippon Life Insurance Company of America (NLB) (West Des Moines, Iowa, USA). The outlook of these Credit Ratings (ratings) is stable.
The ratings of Nissay reflect its balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management (ERM).
Nissay’s balance sheet strength assessment mainly reflects its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). This assessment also is supported by the company’s low financial leverage. Although the company is exposed to moderate equity risk from its stock investment portfolio, its sizable available capital and its good access to debt markets as a well-known life insurance company in Japan and overseas should allow it to absorb such risk.
Nissay’s operating performance has been consistent and resilient amid the COVID-19 pandemic. For the fiscal year ended 31 March 2021 (FY2020), its core operating profit remained stable at JPY 690 billion. Although the company’s annualised premiums from new policies declined due to sales restrictions in the first half of FY2020, its annualised premiums from new policies have been recovering since the second half of FY2020. AM Best expects that the company’s new sales performance will continue to recover, and the company’s stable in-force book of business will continue to support its core operating profit sustainably.
Nissay is one of the leading life insurance companies in Japan, with a market share of 18% in terms of premium income. The company’s sales representative base remains strong, and it is making efforts to diversify its distribution channels further to achieve revenue growth and strengthen profitability in its domestic market. The company continues to have modest geographical diversification, with its relatively small operations in other Asia-Pacific countries and the United States.
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