KUALA LUMPUR, Jan 31 -- AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of ‘aa-’ (Superior) of The Dai-ichi Life Insurance Company Limited (DL) Japan, the wholly owned operating subsidiary of Dai-ichi Life Holdings Inc (DLH), with stable outlook of these Credit Ratings (ratings).
DLH is the ultimate parent for the entire Dai-ichi organisation, according to a statement.
Global credit rating agency AM Best views DL as being integral to the group, given its financial, operational and strategic importance to the overall organisation.
Accordingly, DL’s ratings are based upon the balance sheet fundamentals and operating performance of the DLH organisation, which are then extended specifically to DL.
The ratings reflect DLH’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management.
DLH’s balance sheet strength assessment mainly reflects its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR).
This assessment is also supported by the group’s low financial leverage, albeit higher than some of the life insurers in Japan. In addition, the group continues to manage the durations of its assets and liabilities actively to control any potential asset-liability mismatch risk.
DLH’s operating performance has been strong and stable amid the COVID-19 pandemic, supported by stable premium income and fundamental profit with low volatility in the past. While the group’s operating performance was adversely affected by Japan’s sales activity restrictions in the first half of fiscal-year 2020, it has continued to recover since the second half of fiscal-year 2020 with significant improvement in annualised premium of new business.
United States-headquartered AM Best expects that the group’s new sales performance will continue to improve, with the group’s stable in-force book of business continuing to support its fundamental profit.
In its domestic market, DLH has diversified its distribution channels by developing different brands (i.e. Dai-ichi Life, Dai-ichi Frontier Life and Neo First Life) to meet different customer needs and has also sought geographic diversification by expanding its overseas insurance business, which contributed 21 per cent of the group’s adjusted profit in fiscal-year 2020.
The stable outlooks reflect AM Best’s expectation that DLH will maintain its overall balance sheet strength, supported by its risk-adjusted capitalisation at the strongest level, as measured by BCAR.
For more information, visit www.ambest.com.
-- BERNAMA
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