AM Best Affirms Credit Ratings of Nippon Life Insurance Company and Its Subsidiary

HONG KONG–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa-” (Superior) of Nippon Life Insurance Company (Nissay) (Japan). Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Nissay’s subsidiary, Nippon Life Insurance Company of America (NLB) (West Des Moines, Iowa, USA). The outlook of all of these Credit Ratings (ratings) is stable.

The ratings reflect Nissay’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management (ERM).

Nissay’s balance sheet strength assessment reflects its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), underpinned by its substantial capital base of JPY 8.7 trillion as of 31 March 2025. While the company’s absolute capital declined year over year from an exceptionally high level reached in the prior fiscal year, this movement primarily reflected a decrease in unrealised gains on its securities investments amid adverse financial market conditions, following a material increase of 52% in its capital to JPY 10.5 trillion as of 31 March 2024. From a longer-term perspective, Nissay’s absolute capital remains resilient, with the capital base subsequently recovering to JPY 9.9 trillion as of September 2025. The balance sheet strength assessment is supported further by the company’s conservative financial leverage, sophisticated internal capital assessment capabilities using economic solvency ratio and a prudent asset-liability management strategy, which is aimed at reducing potential interest rate risk amid an increasingly volatile interest rate environment. While Nissay remains exposed to moderate equity and interest rate risks given its sizeable securities portfolio, its substantial available capital provides a solid cushion against such risks. AM Best expects the acquisition of Resolution Life Group Holdings Ltd. (Resolution Life), which was completed in October 2025, to have a limited impact on its balance sheet fundamentals, with some erosion of its risk-adjusted capitalisation anticipated given the scale of the transaction.

In fiscal-year ended 31 March 2025, Nissay demonstrated stable and resilient operating performance, generating consolidated insurance and service revenue of JPY 8.4 trillion, including premium income of JPY 7.9 trillion, and a core operating profit of JPY 1 trillion. This strong performance, which continued in first half fiscal-year 2025, was underpinned by a significant expansion in investment yield margin, supported by higher reinvestment yields and a growing dividend income, as well as profit contributions from recent overseas acquisitions. Despite a volatile macroeconomic and financial market environment, the company has maintained a relatively stable return on equity (ROE) over the last five fiscal years. Over the long term, AM Best expects Nissay’s large and stable in-force book of business in Japan, coupled with a gradually improving earnings mix and expanding overseas operations, to position it to achieve sustainable solid core operating profits.

Nissay continues to be one of Japan’s leading life insurance companies, with a market share of approximately 19% in terms of premium income in fiscal-year 2024. The company continues to leverage its strong sales representative base and diversified distribution channels through acquisitions and targeted new ventures to reach a broader customer base and support sustainable revenue generation in its domestic market.

Recently, Nissay has further advanced its overseas expansion strategy through its minority stake acquisition of Corebridge Financial and its full acquisition of Resolution Life, marking a steep change in its overseas business profile and materially enhancing earnings diversification beyond its domestic market. Nissay has also continued to strengthen its asset management and related businesses through subsidiaries in Japan and India, strategic investments in asset management firms in the United States and a recent expansion into healthcare-related services to support longer-term business diversification.

Negative rating actions could occur if there are material and sustained deterioration in Nissay’s balance sheet metrics caused, for example, by a substantial increase in investment and underwriting risk following large business acquisitions. Negative rating actions also could occur if there are material and prolonged deterioration in operating performance caused by a substantial decline in core operating profits. Positive rating actions could occur if the company further enhances its business profile to exhibit an indisputable market leadership position with strong brand recognition in both domestic and overseas markets.

The ratings of NLB reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate ERM.

The affirmation of NLB’s ratings is supported by a risk-adjusted capitalization that AM Best views as strongest, as measured by BCAR, and supported by its favorable liquidity position and a high-quality investment portfolio. NLB reported capital growth despite dividends to Nissay through third-quarter 2025. Furthermore, NLB’s capitalization remains well above sufficient levels to support its risks. The company continues to maintain an established market position in the Asian markets within the United States.

However, AM Best notes that NLB’s business remains concentrated in the group major medical market and in certain states. The group major medical market is highly competitive, and the company has experienced volatility within this segment in recent years. AM Best notes that NLB’s primary business continues to face challenges due to minimum loss ratio requirements, which have required the company to pay rebates. Despite these factors, NLB continues to maintain an established market position in the Asian markets within the United States due to strong customer service supported by a very high customer retention. NLB expects continued improvement in sales and premium level in the near term. Additionally, the company plans to expand to new markets within the United States to support new revenue opportunities.

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 AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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