AM Best Affirms Credit Ratings of Mitsui Sumitomo Insurance Company, Limited and Aioi Nissay Dowa Insurance Company Limited; Assigns Credit Ratings to MSIG Specialty Insurance America, Inc.

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HONG KONG--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” (Superior) of Mitsui Sumitomo Insurance Company, Limited (MSI) (Japan) and its subsidiaries (see below for related list). Concurrently, AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICR of “aa” (Superior) of Aioi Nissay Dowa Insurance Company Limited (ADI) (Japan). AM Best also has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Aioi Nissay Dowa Insurance (China) Company Limited (ADIC) (China). The outlook of all the aforementioned Credit Ratings (ratings) is stable. These companies are owned ultimately by MS&AD Insurance Group Holdings, Inc. and are collectively referred to here as MS&AD.

Lastly, AM Best has assigned an FSR of A+ (Superior) and a Long-Term ICR of “aa” (Superior) to MSIG Specialty Insurance America, Inc. The outlook assigned to this rating is stable.

The ratings assigned to MSIG Specialty Insurance America, Inc. reflects its strategic importance to the parent (MS&AD) as a newly formed excess & surplus entity to support further growth of the business in the United States. MSIG Specialty Insurance America, Inc. operates within the brand MSIG USA. MSIG Specialty Insurance America, Inc. was included in the existing pooling agreement alongside its three other U.S. subsidiaries.

The ratings of MS&AD 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). AM Best views both MSI and ADI as being integral to the group, given each of these companies’ financial, operational and strategic importance as MS&AD’s two core non-life insurance operating entities. Accordingly, the ratings of MSI and ADI are based upon the credit fundamentals of MS&AD, which are then extended specifically to each entity.

The ratings of ADIC reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings also reflect the company’s strategic importance to its immediate parent, ADI.

MS&AD’s balance sheet strength is supported by its risk-adjusted capitalisation being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), including equity credit in the BCAR hybrid securities. The group maintains a robust capital base, providing substantial capacity to absorb equity risks and underwriting risks in its growing operations. AM Best expects that the group’s accelerated disposal of strategic equity holdings and continued diversification of its investment portfolio will gradually reduce its overall exposure to domestic equity risk in the forthcoming years. The group’s financial leverage remains conservative, with an adjusted financial leverage ratio of 14.1% as of 31 March 2026, as calculated by AM Best, including credit for subordinated bonds. Its interest coverage and financial flexibility are considered strong. As one of the largest listed insurance groups in Japan, MS&AD benefits from strong financial flexibility and good access to equity and debt capital markets when needed.

MS&AD’s operating performance has remained strong in recent years, benefiting from its resilient domestic underwriting performance, improving overseas profitability, and substantial gains generated from investment activities and strategic equity disposals. Despite continued inflationary pressure on claims costs in the voluntary automobile insurance line, the group reported a significant improvement in domestic underwriting profitability in fiscal year 2025, supported by premium rate revisions, lower natural catastrophe losses, and improved fire line profitability. The group’s overseas operations continued to demonstrate improving profitability with its Lloyd’s and reinsurance business reporting strong earnings growth and improved underwriting performance through strict cycle management.

MS&AD is one of the largest insurance groups in Japan and maintains a strong position in the highly consolidated domestic non-life insurance market, with approximately one-third market share in terms of net premiums written through MSI and ADI. MSI anchors the group’s commercial lines franchise with broad-based underwriting capabilities across major commercial business lines, while ADI reinforces the group’s domestic franchise through its strength in the retail and automobile segments. The planned merger of MSI and ADI, targeted for April 2027, is expected to reinforce MS&AD’s competitive position in Japan’s mature non-life insurance market by combining their complementary domestic franchises.

MS&AD has also established a sizeable overseas (re)insurance platform spanning Europe, the Americas, and Asia, with overseas operations contributing approximately 35% of the group’s non-life net premiums written and providing meaningful earnings diversification and long-term growth opportunities. Through organic/inorganic initiatives, MS&AD continues to strengthen its specialty insurance capabilities and expand its presence in the U.S. market, which is the key priority in its overseas expansion strategy. AM Best expects the group’s new overseas management framework to allow more centralised governance and efficient decision making for its growing international business.

AM Best assesses ADIC’s balance sheet strength at the very strong level, underpinned by its risk-adjusted capitalisation at the strongest level, as measured by BCAR. ADIC’s capital and surplus increased moderately in 2025, supported by partial retention of positive earnings. Other supporting factors include the company’s robust regulatory solvency ratio, strong liquidity position and conservative investment strategy. However, the growing deferred tax assets will be an impediment regarding the available capital calculated in BCAR.

AM Best views ADIC’s operating performance as adequate, as demonstrated by a five-year average operating and return-on-equity ratios of 94.6% and 5.8% (2021-2025), respectively. In 2025, ADIC’s net profit after tax was RMB 82.6 million (USD 11.8 million), double the prior year, driven in part by improved underwriting performance and stable investment income.

As a contributor to the parent’s overseas business footprint and a major component of ADI’s business expansion in China, ADIC focuses on personal lines business in China, primarily Toyota-related motor insurance sourced from inward reinsurance business. The business is geographically diversified with a high-frequency, low-severity nature. Going forward, the company will continue to collaborate with its current and prospective business partners, and proactively seek opportunities in direct business to diversify the distribution channel and strengthen its underwriting know-how.

Partially offsetting rating factors include ADIC’s limited business scale in China’s non-life insurance market and considerable concentration risk in sourced premium, despite being partly mitigated by its close ties with ADI and major distribution partners. Notwithstanding, the company continues to benefit from parental support in terms of brand recognition, reinsurance and corporate governance.

Positive rating actions could occur if the group further enhances its business profile to exhibit an indisputable market leadership position with strong brand recognition across both domestic and overseas markets, while maintaining strong profitability in its domestic and international operations. Negative rating actions could occur if there is material deterioration in MS&AD’s balance sheet fundamentals driven by a significant increase in required risk amount outpacing its capital growth. Negative rating actions could also occur if there is persistent and significant deterioration in operating performance stemming from weak underwriting and investment results.

Positive rating actions could occur for ADIC if there is a sustained and notable improvement in its underwriting and operating profitability. Negative rating actions could occur if there is a substantial deterioration in ADIC’s balance sheet strength assessment. Negative rating actions also could arise if there is a reduced level of support from MS&AD.

AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICR of “aa” (Superior) of the following subsidiaries of MSI with stable outlooks:

MS Amlin AG (MS Reinsurance) (Switzerland)
MS Transverse Specialty Insurance Company
MS Transverse Insurance Company
TRM Specialty Insurance Company, (Dallas, TX)
Mitsui Sumitomo Insurance Company of America
Mitsui Sumitomo Insurance USA Inc.
MSIG Specialty Insurance USA Inc.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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.