Japanese insurers grapple with global market volatility - Best's Commentary

KUALA LUMPUR, March 23 -- Despite the recent global equities rout, insurers in Japan remain financially stable to weather market volatility, given their robust balance sheet fundamentals, according to AM Best commentary in a statement.

The new Best’s Commentary, titled ‘Japanese Insurers Continue to Grapple With Global Market Volatility’ states that in AM Best’s view, the credit fundamentals of most insurers in Japan have not changed materially, even with the ongoing COVID-19 virus outbreak and the recent declines seen across global stock markets.

Domestically, the share prices of most of Japan’s large insurance groups have decreased by 30 to 40 per cent from the year-start.

In AM Best’s opinion, the recent share price movements of the major insurance groups do not have much in relation to the business fundamentals of Japan’s major insurance groups.

In addition, most domestic insurers maintain capital adequacy ratios and financial leverage ratios that AM Best considers to be conservative relative to global peers, which should enable the companies to withstand adverse market conditions.

With global financial markets expected to remain volatile over the near to medium term, AM Best’s view of Japanese insurers’ financial strength would be largely subject to the development of oil prices, as well as the evolving nature of the current COVID-19 pandemic, particularly in Europe and the United States.

-- BERNAMA