Fitch Ratings is more positive than Standard & Poor’s on the impact on Japanese insurers of the earthquake and Tsunami.
Fitch affirmed nine Japanese life insurers’ Insurer Financial Strength (IFS) Ratings, following the agency’s ‘core’ & ’severe’ stress test of the impact of the Great East Japan Earthquake and tsunami as well as stock market volatility in its aftermath. The Outlook on all of the ratings is Stable.
The nine insurers are Nippon Life Insurance Company (IFS ‘A+’/Stable), Dai-ichi Life Insurance Company, Limited (IFS ‘A’/Stable), Meiji Yasuda Life Insurance Company (IFS ‘A’/Stable), Sumitomo Life Insurance Company (IFS ‘A-’/Stable), Daido Life Insurance Company (IFS ‘A+’/Stable), Taiyo Life Insurance Company (IFS ‘A-’/Stable), Mitsui Life Insurance Company Limited (IFS ‘BBB-’/Stable), Asahi Mutual Life Insurance Co. (IFS ‘BB’/Stable) and Fukoku Mutual Life Insurance Co. (IFS ‘A’/Stable).
The Fitch stress test results indicate that the Japanese life insurers’ capitalisation is more than sufficient to cover the expected loss estimates even under the Fitch ’severe’ scenario coupled with stock market volatility.
Fitch would expect the insured losses to be absorbed by the insurers’ annual core profits without negatively affecting capitalisation, unless the actual ultimate losses turn out to be materially larger than the amount assumed in Fitch’s ’severe’ stress scenario.