HONG KONG, Jan 31 (Bernama-BUSINESS WIRE) -- AM Best is maintaining 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
Best’s Market Segment Report, “Market Segment Outlook: Japan Non-Life Insurance”, notes that insurers’ efforts to enhance the profitability of the fire insurance line also is a factor in the stable outlook. 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 to sustainability of their fire insurance products. Supported by a rise in premium rates, direct premiums in the fire insurance line grew more than 10% in fiscal year 2022.
Most of Japan’s non-life insurance companies have reported an improvement in premium income in most lines of business in the last 12 months. 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.
“The most critical uncertainty stems from the risks associated with inflation and foreign exchange markets, both of which are closely correlated with each other,” said Charles Chiang, senior financial analyst, AM Best. “Persistently higher-than-expected inflation could squeeze the profitability of non-life insurers, driven by rises in insurance claims and labour costs in the short term.”
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http://www3.ambest.com/bestweek/purchase.asp?record_code=339993.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.View source version on businesswire.com:
https://www.businesswire.com/news/home/20240130413379/en/ContactCharles ChiangSenior Financial Analyst+852 2827 3427charles.chiang@ambest.comChristopher SharkeyAssociate Director, Public Relations+1 908 882 2310christopher.sharkey@ambest.comAl SlavinSenior Public Relations Specialist+1 908 882 2318al.slavin@ambest.comSource : AM Best
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