HONG KONG, June 29 (Bernama-BUSINESS WIRE) — AM Best is maintaining its negative market segment outlook on Japan’s life insurance segment, citing the social and economic impacts of the COVID-19 pandemic on life insurers’ top-line growth and significantly dampened investment income due to low interest rates.
A new Best’s Market Segment Report, “Market Segment Outlook: Japan Life Insurance,” notes that Japan continues to face ongoing pressure domestically and abroad from the economic fallout from the COVID-19 pandemic. Consequently, AM Best’s negative outlook primarily reflects an anticipation of headwinds for the near-term operating performance metrics of Japan life insurers. In AM Best’s view, the current and forecast macroeconomic conditions are likely to suppress top-line growth and profitability of most domestic life insurance companies. However, AM Best notes that most life insurers maintain very strong risk-adjusted capitalisation, and are expected to be able to withstand the potential impact on capital changes that may result from volatility in the global financial markets.