OLDWICK, N.J.--(BUSINESS WIRE)--In this AMBestTV episode, Christie Lee, senior director, AM Best, said non-life insurers in Japan are permitted to set catastrophe reserves for lines of business, which helped them better endure multiple recent catastrophes. Click on http://www.ambest.com/v.asp?v=japannonlife719 to view the entire program.
Japan's non-life insurance sector experienced severe domestic catastrophe losses in 2018 due to multiple typhoons and flooding events. Lee highlighted what impact these events had on Japan’s catastrophe reserves.
“The total losses for the major non-life players accounted for about 7% of their net assets,” said Lee. “As a result, a sizable amount of these catastrophe reserves were released and used for offsetting part of these companies’ underwriting losses, representing a 13% net reduction of the insurers’ overall catastrophe reserves balance. In the fourth quarter of 2018, some insurers worked on replenishing the catastrophe reserve level to put it back to a safe level.”
Lee also spoke about AM Best’s market segment outlook on Japan’s non-life sector.
“Despite the 2018 catastrophe events, AM Best has a stable outlook on the Japanese non-life insurance market. The market is mainly underpinned by a very robust capitalized level, and is supported by a primary rate hike planned for October. AM Best believes that these insurance companies will be able to generate their target profitability with a combined ratio back to the mid-to-low 90% level and still be able to meet the shareholders’ dividend targets.”
To access a copy of this special report, titled, “Japan Non-Life Insurers Focus on Profitability,” visit http://www3.ambest.com/bestweek/purchase.asp?record_code=285676.
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