AM Best Affirms Credit Ratings of The Tokio Marine and Nichido Fire Insurance Company (China) Limited

HONG KONG--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of The Tokio Marine and Nichido Fire Insurance Company (China) Limited (TMNCH) (China). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect TMNCH’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management. The ratings also consider support from its parent, Tokio Marine & Nichido Fire Insurance Co., Ltd. (TMNF), which is the main insurance operating entity of Tokio Marine Holdings, Inc.

TMNCH’s very strong balance sheet strength assessment is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), supplemented by its low underwriting leverage and reinsurance dependency, prudent investment strategy, as well as positive liquidity. The company’s capital and surplus remain comparatively modest while its solvency stays robust with a comfortable buffer above the regulatory requirement.

AM Best assesses TMNCH’s operating performance as strong, as demonstrated by a track record of positive underwriting results that outperformed the market over the past five years. Notwithstanding, the company’s underwriting performance and net profitability were at a more subdued level in 2025, due to intensifying market competition and reduced risk exposure, with return on equity dropped to mid-single digit level. The combined ratio increased moderately, mainly driven by worsened claim experience. TMNCH’s investment results remained stable, as supported by interest income from bank deposits. Moving forward, TMNCH will continue to explore business opportunities in the upstream and downstream industries of Japanese clients.

Established in 2008, TMNCH is a small-sized, long-standing player in China’s non-life insurance markets. The company’s topline decreased for four consecutive years to RMB 903 million in 2025, resulting from the streamlined premium from Japanese clients in China due to headwinds in their business operation, bundled with TMNCH’s prudent underwriting selection. The company has a moderately diversified underwriting portfolio, consisting of motor, fire, marine, liability and other lines. Going forward, the company will focus on maintaining Japanese corporate clients and their supply chains partners, as well as exploring broker channel with high quality business.

TMNCH is 100% owned by TMNF, the first Japanese non-life insurance company with operations spanning across various markets and lines of business globally. TMNCH benefits from preferential access to Japanese interests abroad business in China given its affiliation and common branding with TMNF. The company also receives various implicit support from TMNF, including reinsurance protection, management oversight, and risk framework and governance.

Negative rating actions could occur if there is a material deterioration in TMNCH’s operating profitability, for instance, due to reduced underwriting profit, which no longer supports favourable assessment or continued headwinds in the top-line. Negative rating actions also could occur if there is a reduced level of support from its parent. Although it is unlikely in the near term, positive rating actions could occur if there is a material improvement in TMNCH’s balance sheet strength fundamentals.

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.

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