AM Best has affirmed the financial strength rating of A+ (Superior) and the long-term issuer credit rating (ICR) of “aa-” (Superior) of Sompo Japan Insurance (SJ) and its subsidiaries. The outlook of these credit ratings is stable. SJ is the core operating unit of Tokyo-based SOMPO Holdings, its ultimate parent and one of the largest non-life insurance groups in Japan. Concurrently, AM Best has affirmed the long-term ICR of “a-” (Excellent) of Bermuda-based Sompo International Holdings, a subsidiary of SOMPO Holdings. AM Best says the ratings of SJ reflect its balance sheet strength, which AM Best assesses as “strongest”, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management. SJ’s balance sheet strength assessment reflects the company’s ‘strongest level of risk-adjusted capitalisation’, as measured by AM Best’s capital adequacy ratio. The company’s financial leverage remains conservative with adjusted debt leverage ratios below 25 per cent, although its higher compared to its domestic non-life peers in Japan. The ratings company calculates that SJ has a track record of strong operating performance, mainly supported by its growing premium income and a five-year average return-on-equity ratio of 7.3 per cent (fiscal year 2018 – 2022) on a consolidated basis.
