HONG KONG, July 23 (Bernama-BUSINESS WIRE) -- AM Best is holding its stable market segment outlook on Japan’s non-life insurance industry, predominantly driven by carriers’ profitable underwriting performance amid the COVID-19 pandemic. According to the new Best’s Market Segment Report, titled, “Market Segment Outlook: Japan Non-Life Insurance,” premium rate adjustments, which are likely to improve the profitability of the fire insurance line; and solid risk-adjusted capitalisation to weather potential financial market volatility also are key supporting factors behind the stable outlook. For fiscal-year 2020, the economic fallout from the pandemic led to a slowdown in economic activity domestically and regionally. Most major domestic non-life insurers saw a negative impact on certain lines of business due to the pandemic, such as the premium revenue of marine and travel insurance. Nonetheless, the overall underwriting performance of non-life insurers in Japan generally has been positive despite the impact of COVID-19. According to the report, this is because the increase in claims related to COVID-19 have been relatively low, as domestic non-life insurers typically have limited net retained exposure to event cancellation and business interruption risks in Japan. Net incurred losses of most major domestic non-life insurers declined in fiscal-year 2020, primarily due to a decrease in large-scale natural catastrophe occurrences, as well as the positive effect of stay-at-home policies on the claim frequencies of voluntary automobile and travel insurances. Furthermore, with increases in the premium rates for voluntary automobile insurance and fire insurance, most major domestic non-life insurers reported a material improvement in their combined ratios for private insurance. Voluntary automobile insurance accounts for over half of Japan’s non-life insurance net premium written, excluding compulsory automobile liability insurance. As a result, the underwriting profitability of the non-life market is tied more closely to the underwriting performance of the voluntary automobile insurance business. The majority of domestic non-life companies have very strong capital positions. In addition, the amount of excess solvency margin held by most domestic insurance companies is also sizable relative to the value of equities and foreign securities, which suggests that there is a significant amount of excess capital available to cushion against market volatility. To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=310960. AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com. Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED. View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005606/en/ Contact Jason Shum Associate Director +852 2827 3424 jason.shum@ambest.com Christopher Sharkey Manager, Public Relations +1 908 439 2200, ext. 5159 christopher.sharkey@ambest.com Jim Peavy Director, Communications +1 908 439 2200, ext. 5644 james.peavy@ambest.com Source : AM Best --BERNAMA |
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