A.M. Best Special Report: Japanese Insurers’ Balance Sheet Strength Improves With a Focus on Risk Exposure

HONG KONG--(BUSINESS WIRE)-- Japanese insurers are maintaining their balance sheet strength despite the challenging market conditions in Japan, according to a new A.M. Best special report. The Best’s Special Report, titled, “Japanese Insurers’ Balance Sheet Strength Improves With a Focus on Risk Exposure,” states that A.M. Best-rated Japanese insurance companies’ levels of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), have improved over the past five years as a result of strong growth in capital. Both life and non-life companies have tightly controlled their risk exposure primarily through rebalancing their investment portfolio and risk diversification during the period.

Although the recent large scale of acquisitions in overseas markets weighs on their capitalization in the near term, this is expected to gradually recover going forward due to a more stable earnings source from the diversified business mix across different regions, based on successful progress in the integration of these overseas operations. This may help offset the high exposure of life insurers to domestic investment risk, especially in Japanese Government Bonds.

For the full copy of this briefing, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=244878.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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Source: A.M. Best Company