Dai-ichi Life retains stable outlook despite higher risky asset holdings

Asset quality is expected to gradually improve, Moody's said.

Dai-ichi Life retains its stable outlook on the back of its strong domestic market position, strong capitalisation, and sound asset quality management, said Moody’s Ratings.

Its long history and strong brand in Japan’s life insurance market supports its market position. The combined market shares of Dai-ichi Life and Dai-ichi Frontier Life in terms of premiums were 2.8 times the typical market share of life insurers in Japan in the fiscal year ended March 2025, the ratings agency noted.

Capitalisation is strong, with its economic solvency ratio (ESR) at 210% as of March 2025.

“We expect its ESR to remain within its mid-term target range of 170%-200%, while the group focuses on improving its capital efficiency as a listed company, through higher shareholder returns or acquisitions,” Moody’s stated.

However, the insurer's holdings of risky assets, which include equities, non-investment grade bonds and real estates, are higher than similarly rated global peers.

“That said, we expect the insurer's asset quality to improve gradually supported by its initiative to reduce domestic equity holdings,” Moody’s said.