Fitch expects Japan insurers to sustain strong underwriting in FY 2026

The three leading non-life insurers recorded solid profits in FY 2025.

Fitch Ratings expects Japan’s major non-life insurance groups to maintain strong underwriting results in both domestic and overseas markets for the financial year ending March 2026 (FY 2026), although earnings growth is likely to slow due to reduced gains from the sale of strategic shareholdings.

The three leading non-life insurers, MS&AD Insurance Group Holdings, Tokio Marine Holdings, and Sompo Holdings, recorded solid profits in FY 2025. It was driven by proceeds from strategic share divestments. 

These sales also improved their economic solvency ratios (ESR), as equities carry higher risk charges under ESR calculations.

Capital adequacy is expected to remain strong, supported by retained earnings and capital reserves. 

Fitch notes that domestic underwriting results were stable in FYE25, with minimal impact from natural catastrophes. 

Premium increases in the motor insurance segment are expected to support gradual profitability improvements.

Overseas operations, particularly in North America, continued to grow and contributed significantly to earnings. The weaker yen further boosted net profits when converted from foreign currencies.