Nippon Life maintains stability with strong capitalisation

Nissay’s capital position is supported by a 52% increase in absolute capital to $68b.

Nippon Life Insurance Company (Nissay) is expected to maintain a stable performance amidst a robust capital position, according to AM Best.

Nissay’s capital position remains strong, supported by a 52% increase in absolute capital to $68.25b (¥10.5t) as of 31 March 2024.

The growth was driven by unrealized gains on securities investments amid favorable market conditions.

Whilst the company faces moderate equity risk from its stock holdings, its strong capital base provides a buffer.

AM Best anticipates that Nissay’s planned acquisition of Resolution Life Group Holdings Ltd. will have a limited impact on its balance sheet, though some moderate erosion in risk-adjusted capitalization is expected.

For the fiscal year ended 31 March 2024, Nissay’s premium income rose 35% year-over-year to $55.9b (¥8.6t), whilst core operating profit reached $4.97b (¥764b).

Growth in sales of savings-type single premium products, supported by foreign and domestic interest rate trends, contributed to this performance.

The company also benefited from higher investment income due to the Japanese yen’s depreciation and lower COVID-19-related losses.

AM Best expects Nissay’s stable in-force business in Japan and ongoing diversification efforts to support sustainable long-term profits.

($1.00 = ¥154.62)