5th June 2019
Japan's three non-life groups-Tokio Marine Holdings, SOMPO Holdings and MS&AD Insurance Group Holdings-have maintained strong capital buffers despite record-high weather-related losses of JPY1.6tr in 2018, as the groups' diversified businesses tempered the poor performance of their domestic non-life segments at group level, says Fitch Ratings in a new report.
Fitch expects limited improvement in the underwriting performance of the fire business line in the financial year ending March 2020(FYE20) due to planned premium hikes of 5%-10% later in the year, as most retail fire policies have multi-year terms. In addition, further premium hikes will be required to reflect rising claim costs from more frequent weather-related losses.
Japan's top-four non-life insurers' average combined ratios deteriorated to 101, from 95 at FYE18. These insurers expect their combined ratio to decline back to the historical average of 95, assuming weather-related losses remain within their estimates.
The non-life groups' economic solvency ratio fell in FYE19 due to lower interest rates and a flattened yield curve. However, each group's ratio was still within its respective target level.
The "Japanese Non-Life Insurance Dashboard 2019" is available at www.fitchratings.com
Fitch Trends(319 articles)