Credit rating agency AM Best has removed the positive under review status and affirmed Sompo Japan Insurance Inc. and its subsidiaries’ A+ (senior) financial strength rating and “aa-” (senior) long-term issuer credit rating.
The outlook on the financial strength rating is stable, while the outlook on the long-term issuer credit rating is positive, AM Best reported.
Meanwhile, AM Best has been removed from review with a positive impact and affirmed Pembroke, Bermuda-based Sompo International Holdings Ltd.’s long-term issuer credit rating at “a-” (Excellent).
The agency also affirmed the long-term issuance credit rating of “a-” (Excellent) on the company’s $335 million 7% senior unsecured notes due 2034, which are guaranteed by Sompo International Holdings Ltd. The ratings also have a positive outlook, according to AM Best.
AM Best said the ratings reflect Sompo Japan Insurance Inc.’s strongest balance sheet strength, supported by strong operating results, sound business profile and appropriate enterprise risk management.
AM Best noted that before lifting the review status, Sompo Holdings, Inc. completed the acquisition of Aspen Insurance Holdings Limited through Sompo International Holdings Ltd., a wholly-owned subsidiary of Sompo Japan Insurance Inc., on February 24, 2026.
AM Best highlighted that Sompo Japan Insurance Inc. continues to maintain a strong position in Japan’s highly consolidated domestic insurance market, with about a quarter of its share.
At the same time, the company has been expanding its geographic coverage, with overseas operations contributing about 45% of consolidated insurance revenue and accounting for the majority of adjusted profit in fiscal 2024. AM Best said the acquisition of Aspen is expected to significantly enhance its presence in the global property and casualty reinsurance market by increasing the group’s scale and strengthening its specialty product lines.
The positive outlook on the long-term issuer credit rating reflects AM Best’s expectation that the company’s business profile will strengthen in the short to medium term, driven by continued international expansion and diversification, and further supported by the Aspen acquisition. AM Best noted that effective post-merger integration and rigorous risk management of the expanded overseas portfolio will remain key factors in its ongoing assessment.
AM Best believes the company’s balance sheet strength is supported by the highest level of risk-adjusted capital, as measured by Best’s capital adequacy ratio.
While the Aspen acquisition may put some pressure on capital, AM Best believes Sompo Japan Insurance Inc. retains sufficient capital buffers and profitability to absorb the impact and recover over time. The agency added that it will continue to monitor the impact on balance sheet fundamentals in the period ahead.
AM Best also observed that while the company is exposed to significant equity risk through its domestic portfolio, this risk is expected to gradually decrease as the company continues to reduce its strategic equity holdings. AM Best said the balance sheet assessment was further supported by conservative financial leverage and strong financial flexibility.
AM Best said positive rating action could be taken if the company achieves sustained improvements in business scale through the successful integration of Aspen.
Conversely, negative rating action could result if balance sheet fundamentals weaken materially, particularly if risk exposures grow faster than capital growth, or if operating results materially deteriorate due to weak underwriting or investment results.
The affirmed ratings apply to Sompo Japan Insurance Inc. and a range of its subsidiaries and reflect AM Best’s consensus assessment of the group’s overall financial strength and strategic direction.
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