HONG KONG, Nov 1 (Bernama-BUSINESS WIRE) — AM Best is maintaining a stable market segment outlook on Japan’s non-life insurance segment, as domestic insurers record profitable underwriting performance despite significant catastrophe losses; however, according to a new AM Best report, the recent consumption tax hike and ongoing global trade tensions could create pressure on the insurance companies operating in the country.
A new Best’s Market Segment Report, titled, “Market Segment Outlook: Japan Non-Life Insurance,” states that AM Best expects that more taxes will be imposed on various underwriting and operating expenses for most of the domestic insurance companies. These taxes could lead to a rise in combined ratios and a decline in underwriting profit for the market. Underwriting results generally deteriorated in fiscal-year 2018-2019 due to catastrophe events, but insurers still achieved profitability. Along with the underwriting resilience, the stable outlook factors in insurers’ premium rate adjustments that are likely to mitigate the negative impact of the consumption tax hike. Solid risk-adjusted capital positions, which weather financial market volatility, also are a key factor supporting the stable outlook.