HONG KONG--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of “aa-” of Meiji Yasuda Life Insurance Company (Meiji Yasuda) (Japan). The outlook of these Credit Ratings (ratings) is stable.
The rating affirmations reflect Meiji Yasuda’s strong capitalization, strong business profile and stable operating performance.
Meiji Yasuda’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remained very strong in fiscal year 2015, despite the effects of a decline in unrealized gains and an increase in goodwill due to its completed acquisition of StanCorp Financial Group, Inc. in March 2016.
Despite negative premium growth since fiscal year 2012, Meiji Yasuda has maintained its position as Japan’s third-largest life insurer (including Japan Post) based on premium income. The company also has retained the lead position in the group insurance segment, leveraging its good relationships with local government entities and regional financial institutions.
Meiji Yasuda’s operating performance is expected to continue stabilizing with the gradual shift in its premium mix, as the increasing proportion of protection-type products supports more stable mortality and expense margins.
Partially offsetting rating factors are Meiji Yasuda’s high investment risk and historically volatile premium income. Meiji Yasuda’s proportion of single payment premium remains relatively high when compared with other similarly rated Japanese life insurers.
While positive rating actions are unlikely in the near term, negative rating actions could occur if there is significant deterioration in the company’s risk-adjusted capitalization, a continued downward trend in the company’s operating performance or a sharp decrease in the company’s liquidity levels.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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