AM BEST AFFIRMS CREDIT RATINGS OF MEIJI YASUDA LIFE INSURANCE COMPANY
- news2u
- Feb 8, 2023
- 2 min read
HONG KONG, Feb 7 (Bernama-BUSINESS WIRE) -- AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of “aa-” (Superior) of Meiji Yasuda Life Insurance Company (Meiji Yasuda) (Japan). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Meiji Yasuda’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management.
Meiji Yasuda’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, with an adjusted debt leverage ratio that is well below 25%. The company’s use of sophisticated and transparent economic-based indicators, including the economic solvency ratio and group surplus results, also allow it to evaluate its risk-taking activities and capital on a timely basis.
Meiji Yasuda has a track record of a consistently strong operating performance, mainly supported by a stable trend of base profit and a five-year average return-on-equity of 6.2% (fiscal years 2017-2021), as calculated based on comprehensive income. The company’s base profit remained resilient at JPY 617 billion (USD 5.5 billion) in fiscal-year 2021 amid the COVID-19 pandemic. The company was adversely affected by a new wave of COVID-19 infections in Japan that led to significant hospitalisation benefit payments for the fiscal year ended 31 March 2023. However, AM Best expects that the impact of these pandemic-related claims will moderate significantly from October 2022, following the Japanese government’s updated guidelines. Over the long term, the company’s stable in-force business will continue to support its base profit in a sustainable manner.
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