Reuters logo
Fitch Revises Outlooks on 10 Japanese Insurers to Stable
May 2, 2017 / 5:52 AM / 5 months ago

Fitch Revises Outlooks on 10 Japanese Insurers to Stable

(The following statement was released by the rating agency) TOKYO/HONG KONG, May 02 (Fitch) Fitch Ratings has revised the Outlooks on 10 Japanese insurers to Stable from Negative and affirmed the ratings on all 10 insurers. The Outlooks on the Long-Term Issuer Default Ratings (IDR) of The Dai-ichi Life Insurance Company, Limited and Fukoku Mutual Life Insurance Co remain Stable. The ten insurers are: - The Dai-ichi Life Insurance Company, Limited (Dai-ichi Life) - Daido Life Insurance Co. (Daido Life) - Fukoku Mutual Life Insurance Co (Fukoku Life) - Meiji Yasuda Life Insurance Company (Meiji Yasuda Life) - Mitsui Sumitomo Insurance Company, Limited (MSI) - Nippon Life Insurance Company (Nippon Life) - Sompo Japan Nipponkoa Insurance Inc. (Sompo Japan Nipponkoa) - Sumitomo Life Insurance Company (Sumitomo Life) - Taiyo Life Insurance Company (Taiyo Life) - Tokio Marine & Nichido Fire Insurance Co., Ltd. (TMNF) A full list of rating action is provided at the end of this commentary. KEY RATING DRIVERS The rating action follows Fitch's revision of the Outlook on Japan to Stable from Negative (see <a href="https://www.fitchratings.com/site/pr/1022824 ">Fitch Revises Outlook on Japan to Stable; Affirms at 'A', dated 27 April 2017 at www.fitchratings.com). The ratings of all the insurers, except Dai-ichi Life and TMNF, are capped at Japan's Long-Term Local-Currency IDR. In Fitch's view, only insurers with very good credit quality and large international business diversification can be rated above the sovereign rating if they hold high levels of government debt; that is, more than 20% of invested assets. Fitch views insurance groups that generate 20% or more of their net premiums from international business sources on a sustained basis as having large international business diversification. Fitch maintains its view that only Dai-ichi Life and TMNF out of the 10 insurers under review have achieved the necessary international business diversification that counterbalances their heavy Japanese government debt holdings. This allows the ratings on the two insurers to be up to one notch higher than the sovereign rating. The other eight Japanese insurers have high levels of Japanese government debt without the necessary level of international business diversification. As a result, they cannot be rated above the sovereign. However, MSI's parent, MS&AD Insurance Group Holdings, Inc., has been expanding its international insurance businesses by acquiring foreign insurers and is approaching the threshold of large international business diversification. Therefore, Fitch may consider allowing the ratings on MSI to exceed Japan's sovereign rating by a maximum of one notch, taking into consideration MSI's other rating triggers. RATING SENSITIVITIES An upgrade of any of the insurers is not probable in the near-term, as they are currently rated at or above Japan's Long-Term Local-Currency IDR. If the rating on Japan are lowered, the ratings on the insurers are also likely to be lowered. See previously released commentary on the 10 insurance companies at <a href="https://www.fitchratings.com">www.fitchratings.com for a discussion of additional ratings sensitivities. FULL LIST OF RATING ACTIONS The Dai-ichi Life Insurance Company, Limited --Insurer Financial Strength (IFS) rating affirmed at 'A+'; Outlook revised to Stable from Negative --Long-Term IDR affirmed at 'A'; Outlook Stable --USD1.3 billion cumulative perpetual subordinated notes issued in 2011 affirmed at 'A-' --USD1 billion cumulative perpetual subordinated notes issued in 2014 affirmed at 'A-' --USD2.5 billion cumulative perpetual subordinated notes issued in 2016 affirmed at 'A-' Daido Life Insurance Co. --IFS rating affirmed at 'A'; Outlook revised to Stable from Negative Fukoku Mutual Life Insurance Co --IFS rating affirmed at 'A'; Outlook revised to Stable from Negative --Long-Term IDR affirmed at 'A-'; Outlook Stable --USD0.5 billion cumulative perpetual subordinated notes issued in 2013 affirmed at 'BBB+' --USD0.5 billion cumulative perpetual subordinated notes issued in 2015 affirmed at 'BBB+' Meiji Yasuda Life Insurance Company --IFS rating affirmed at 'A'; Outlook revised to Stable from Negative --Long-Term IDR affirmed at 'A'; Outlook revised to Stable from Negative --USD2 billion subordinated notes due 2045 affirmed at 'A-' Mitsui Sumitomo Insurance Company, Limited --IFS rating affirmed at 'A'; Outlook revised to Stable from Negative --Long-Term IDR affirmed at 'A'; Outlook revised to Stable from Negative --USD1.3 billion subordinated notes due 2072 affirmed at 'A-' Nippon Life Insurance Company --IFS rating affirmed at 'A'; Outlook revised to Stable from Negative --Long-Term IDR affirmed at 'A'; Outlook revised to Stable from Negative --USD2 billion subordinated notes due 2042 affirmed at 'A-' --USD2.25 billion subordinated notes due 2044 affirmed at 'A-' --USD1.5 billion subordinated notes due 2046 affirmed at 'A-' Sompo Japan Nipponkoa Insurance Inc. --IFS rating affirmed at 'A'; Outlook revised to Stable from Negative --Long-Term IDR affirmed at 'A'; Outlook revised to Stable from Negative --USD1.4 billion subordinated notes due 2073 affirmed at 'A-' Sumitomo Life Insurance Company --IFS rating affirmed at 'A'; Outlook revised to Stable from Negative --Long-Term IDR affirmed at 'A'; Outlook revised to Stable from Negative --USD1 billion subordinated notes due 2073 affirmed at 'A-' Taiyo Life Insurance Company --IFS rating affirmed at 'A'; Outlook revised to Stable from Negative Tokio Marine & Nichido Fire Insurance Co., Ltd. --IFS rating affirmed at 'A+'; Outlook revised to Stable from Negative Contact: Primary Analysts Teruki Morinaga, CFA (Dai-ichi Life, Daido Life, Fukoku Life, Sompo Japan Nipponkoa, Taiyo Life and TMNF) Director +81 3 3288 2781 Fitch Ratings Japan Limited Kojimachi Crystal City East Wing 3F, 4-8 Kojimachi, Chiyoda-ku Tokyo 102-0083 Akane Nishizaki (Meiji Yasuda Life, MSI, Nippon Life and Sumitomo Life) Associate Director +852 2263 9942 Fitch (Hong Kong) Limited 19/F Man Yee Building 68 Des Voeux Road Central Hong Kong Secondary Analysts Akane Nishizaki (Dai-ichi Life, Daido Life, Fukoku Life, Sompo Japan Nipponkoa, Taiyo Life and TMNF) Associate Director +852 2263 9942 Teruki Morinaga, CFA (Meiji Yasuda Life, MSI, Nippon Life and Sumitomo Life) Director +81 3 3288 2781 Committee Chairperson Jeffrey Liew Senior Director +852 2263 9939 Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria Insurance Rating Methodology (pub. 26 Apr 2017) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here Solicitation Status here#solicitation Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE here. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below