Sompo’s credit ratings affirmed by AM Best
AM Best has removed Sompo Japan Insurance and its subsidiaries from under review with positive implications and affirmed its financial strength rating of A+ (superior) and its long-term issuer credit ratings of “aa-” (superior).
The outlook assigned to the FSR is stable, while the outlooks assigned to the long-term ICRs is positive.
Concurrently, AM Best has removed from under review with positive implications and affirmed the long-term ICR of “a-” (excellent) of Bermudian-based Sompo International Holdings.
In addition, AM Best has removed from under review with positive implications and affirmed the long-term issue credit rating of “a-” (excellent) of $335 million, 7 per cent senior unsecured notes, due 2034, which is guaranteed by SIH.
The outlook assigned to these credit ratings is positive.
AM best said the ratings reflect SJ’s balance sheet strength, which it assesses as strongest, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management.
The ratings were removed from under review with positive implications following the completion of the acquisition of Aspen Insurance Holdings by Sompo Holding, on February 24 via SIH, a wholly owned subsidiary of SJ.
While SJ continues to maintain a strong market position with about a one-quarter share of the highly consolidated domestic market in Japan, it has been demonstrating an increasingly diversified underwriting portfolio geographically, with overseas operations accounting for approximately 45 per cent of consolidated insurance revenue and with a majority of adjusted profit in fiscal-year 2024.
The acquisition of Aspen is expected to increase SJ’s business scale and speciality line capabilities, materially enhancing its presence in the global property and casualty re/insurance markets.
AM Best expects SJ’s business profile to strengthen over the near to medium term, driven by its continued global expansion and diversification, further accelerated by the addition of Aspen.
The successful execution of post-merger integration and prudent risk management of the expanding overseas portfolio were key considerations in its ongoing business profile assessment.
The credit ratings agency said SJ’s balance sheet strength assessment reflects the company’s strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio.
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