Japan: Life sector's profitability expected to recover in 2024
Source: Asia Insurance Review | Jul 2023
The overall profitability of Japanese life insurers is likely to bounce back in the financial year ending 31 March 2024, says Fitch Ratings in a new report.
In the report titled ‘Japanese Life Insurance Dashboard: FYE2023 Results’, Fitch says that the profitability will be driven by the recovery in underwriting profitability as the Japanese government eased COVID-related restrictions in May 2023 and changed the’”deemed hospitalisation’ rule.
The overall credit fundamentals of Japanese life insurers will remain resilient, says Fitch.
Aggregate core profits at the nine Japanese traditional life insurers decreased to JPY1.541tn ($11bn) (-41% y-o-y) in FYE23.
Underwriting results in FYE23 were worse than in FYE22, mainly due to COVID-related health insurance claims on deemed hospitalisation. Investment income has also been sluggish due to a recent rise in currency hedging costs. Positive investment spread also decreased to JPY699bn (-41% y-o-y) in FYE23. A