AM Best affirms credit ratings of Japan’s The Dai-ichi Life Insurance

KUALA LUMPUR, Feb 13 (Bernama) -- AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of “aa-” (Superior) of Japan’s The Dai-ichi Life Insurance Company Limited (DL), the wholly owned operating subsidiary of Dai-ichi Life Holdings Inc (DLH).

In a statement, AM Best said the outlook of these credit ratings (ratings) was stable and viewed 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. DLH is the ultimate parent for the entire Dai-ichi organisation.

The ratings reflect DLH’s balance sheet strength, which AM Best assessed 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), which is also supported by the group’s low financial leverage, although this is higher than that of some 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 remained strong and stable amid the COVID-19 pandemic during fiscal year 2021. Over the past five fiscal years, the group’s return on equity based on comprehensive income also remained strong with a five-year average of 10 per cent.

The stable outlooks reflected 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.

DLH remains one of the largest life insurance groups in Japan where in its domestic market, the group has diversified its distribution channels by developing various brands namely, Dai-ichi Life, The Dai-ichi Frontier Life Insurance Co Ltd and The Neo First Life Insurance Company Limited to meet different customer needs.

-- BERNAMA