Credit rating agency Fitch Ratings reports that Asia-Pacific non-life insurance companies continue to demonstrate strong credit fundamentals relative to their international peers.
In its latest peer analysis, Fitch Ratings compared the key credit characteristics of major non-life insurers in Asia Pacific with those of large global operators and selected companies in the United States and Europe, Middle East and Africa (EMEA) regions.
The agency concluded that the overall quality of Asia Pacific company profiles is very high, driven by considerable market positions and broad diversification across business lines and geographic markets.
As a result, Fitch rates the company’s profile assessment on a ‘favorable’ to ‘most favorable’ scale, corresponding to the ‘aa’ category within its ratings framework.
Capital strength is considered another defining characteristic of the group. Fitch Ratings said insurers generally maintain strong capitalization and manageable leverage, with Prism Global’s scores ranging from “strong” to “very strong.” Regulatory solvency ratios are also in line with the ‘A’ to ‘AAA’ categories under Fitch’s Insurance Rating Criteria.
The agency expects companies such as Tokio Marine & Nichido Fire Insurance Company, Nippon Property & Casualty Insurance Company and Mitsui Sumitomo Insurance Company to demonstrate solid economic solvency under Japan’s economic value-based solvency system (J-ICS), which takes effect at the end of March 2026.
Fitch Ratings assesses peers’ profitability as “Strong” to “Very Strong.” The agency noted that underwriting results benefited from continued increases in premium rates, although insurers remain under pressure from claims inflation, rising reinsurance costs and catastrophe-related losses.
At the same time, higher reinvestment yields contributed positively to earnings. Fitch also observed improved performance from Japan’s three largest non-life insurance groups, driven in part by strategic equity disposals in their international operations and continued underwriting performance.
In terms of investment risk, Fitch Ratings believes that asset risk has a moderate impact on the ratings of Japanese insurance companies and has a small impact on other companies in the same industry.
While Japanese companies have previously increased allocations to riskier assets to boost returns, the agency expects this exposure to decline in the coming years. This reflects plans to divest domestic equity and is in line with regulatory expectations.
Fitch Ratings also highlighted QBE Group’s upgrade in June 2025, attributing the change to continued improvements in financial performance and continued strength in capital metrics. The agency noted that QBE’s underwriting performance had strengthened over the past three years, supported by premium increases and targeted measures to improve yield consistency.
As part of its analytical methodology, Fitch Ratings scores nine key credit factors that underpin insurers’ insurance financial strength ratings.
The ratings are expressed on a scale from “aaa” to “c”, with each factor weighted according to its relative importance in determining the overall rating and outlook, which may be stable, positive or negative. The analysis draws on each insurer’s latest Insurance Rating Navigator report and applies Fitch’s established insurance rating criteria.