JAPAN’S NON-LIFE INSURANCE INDUSTRY REMAINS STABLE - AM BEST

KUALA LUMPUR, Jan 31 (Bernama) -- Global credit rating agency, AM Best has maintained a stable outlook on Japan’s non-life insurance industry, citing profitable and stable underwriting and a solid capital base amid financial market uncertainty.

The rating agency’s “Market Segment Outlook: Japan Non-Life Insurance” report notes that insurers’ efforts to enhance the profitability of the fire insurance line also is a factor in the stable outlook.

In a statement, AM Best said losses from large-scale historical catastrophe events have strained the underwriting results of the fire insurance line considerably and contributed to heightened reinsurance costs in recent years.

Consequently, most major domestic non-life insurers have recognised the pressing need to address the sustainability of their fire insurance products, while direct premiums in the fire insurance line grew more than 10 per cent in fiscal year 2022, supported by a rise in premium rates.

Most of Japan’s non-life insurance companies have reported an improvement in premium income in most lines of business over the past year.

AM Best expects that the impact of the January 2024 earthquake in Japan will be manageable relative to the non-life segment’s profit base, as most residential losses are supported by the government.

Although premium trends and profitability for Japan’s non-life market are expected to remain largely stable, uncertainty about Japan’s macroeconomic environment could still pressure the domestic insurance market over the next 12 months.

-- BERNAMA