Credit rating agency AM Best has removed the under review with positive implications status and affirmed the Financial Strength Rating of A+ (Superior) alongside the Long-Term Issuer Credit Ratings of “aa-” (Superior) for Sompo Japan Insurance Inc. and its subsidiaries.
The Financial Strength Rating carries a stable outlook, while the Long-Term Issuer Credit Ratings are assigned a positive outlook, as reported by AM Best.
At the same time, AM Best has removed from under review with positive implications and affirmed the Long-Term Issuer Credit Rating of “a-” (Excellent) for Sompo International Holdings Ltd., based in Pembroke, Bermuda.
The agency has also affirmed the Long-Term Issue Credit Rating of “a-” (Excellent) for the company’s $335 million 7% senior unsecured notes due in 2034, which are guaranteed by Sompo International Holdings Ltd. These ratings also carry a positive outlook, according to AM Best.
AM Best states that the ratings reflect Sompo Japan Insurance Inc.’s strongest balance sheet strength, supported by robust operating performance, a favourable business profile and appropriate enterprise risk management.
The removal of the under review status follows the completion of the acquisition of Aspen Insurance Holdings Limited by Sompo Holdings, Inc. on 24 February 2026, executed through Sompo International Holdings Ltd., a wholly owned subsidiary of Sompo Japan Insurance Inc., as noted by AM Best.
AM Best highlights that Sompo Japan Insurance Inc. continues to hold a strong position in Japan’s highly consolidated domestic insurance market, with an approximate one-quarter share.
At the same time, the company has been expanding its geographical footprint, with overseas operations contributing around 45% of consolidated insurance revenue and representing the majority of adjusted profit in the 2024 financial year. According to AM Best, the acquisition of Aspen is expected to broaden the group’s scale and strengthen its specialty lines, significantly enhancing its presence in global property and casualty reinsurance markets.
The positive outlook on the Long-Term Issuer Credit Ratings reflects AM Best’s expectation that the company’s business profile will strengthen over the near to medium term, driven by continued international expansion and diversification, further supported by the Aspen acquisition. AM Best notes that effective post-merger integration and disciplined risk management of the enlarged overseas portfolio will remain key factors in its ongoing assessment.
In AM Best’s view, the company’s balance sheet strength is underpinned by the highest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio.
Although the Aspen acquisition may place some pressure on capitalisation, AM Best considers that Sompo Japan Insurance Inc. retains sufficient capital buffers and earnings capacity to absorb the impact and recover over time. The agency adds that it will continue to monitor any effects on balance sheet fundamentals in the coming periods.
AM Best also observes that while the company has notable exposure to equity risk through its domestic investment portfolio, this exposure is expected to decline gradually as it continues to reduce strategic equity holdings. Conservative financial leverage and strong financial flexibility further support the balance sheet assessment, according to AM Best.
AM Best indicates that positive rating actions could follow if the company demonstrates sustained improvement in business scale through the successful integration of Aspen.
Conversely, negative rating actions could arise if there is a material weakening of balance sheet fundamentals, particularly if risk exposure grows faster than capital, or if operating performance deteriorates significantly due to weaker underwriting or investment outcomes.
The affirmed ratings apply to Sompo Japan Insurance Inc. and a range of its subsidiaries, reflecting the group’s overall financial strength and strategic direction, as consistently evaluated by AM Best.
