Fitch expects continued capital adequacy for Japanese insurers

Weaker investor pressure has allowed insurers to build excess capital.

Fitch Ratings expects Japanese life insurers to keep a strong capital adequacy for the medium term, amidst accumulated capital, including continued hybrid debt issuance and substantial unrealised gains on securities. 

This is supported by accumulated capital, ongoing hybrid debt issuance, and substantial unrealized gains on securities. 

Unlike in markets such as the US and UK, weaker investor pressure in Japan for share buybacks and dividend payouts has allowed insurers to build excess capital, reinforcing their financial stability.  

According to the review, Dai-ichi Life stands out as a major global player due to its highly diversified business portfolio. 

In contrast, other Japanese life insurers face challenges stemming from smaller operations and limited diversification, which weigh on their credit profiles.  

The report underscores that whilst differences in company profiles persist, Japanese life insurers' capital positions remain sufficient to support their ratings.