Fitch Ratings, the credit rating agency, has reported that non-life insurers in the Asia-Pacific (APAC) region continue to exhibit strong credit fundamentals relative to their international peers.
In its latest peer analysis, Fitch Ratings compares key credit characteristics of major APAC non-life insurers with large global operators and selected firms across the United States and the Europe, Middle East and Africa (EMEA) region.
The agency concludes that the overall quality of company profiles within the APAC group is notably high, supported by sizeable market positions and broad diversification across both business lines and geographic markets.
As a result, Fitch assigns company profile assessments in the ‘Favourable’ to ‘Most Favourable’ range, corresponding to the ‘aa’ category within its rating framework.
Capital strength is identified as another defining feature of the group. Fitch Ratings indicates that insurers generally maintain robust capitalisation and manageable leverage, with Prism Global scores ranging from ‘Strong’ to ‘Extremely Strong’. Regulatory solvency ratios are also consistent with the ‘A’ to ‘AAA’ categories under Fitch’s insurance rating criteria.
The agency expects firms including Tokio Marine & Nichido Fire Insurance, Sompo Japan and Mitsui Sumitomo Insurance to demonstrate solid economic solvency under Japan’s economic value-based solvency regime (J-ICS), which came into effect at the end of March 2026.
Profitability across the peer group is assessed by Fitch Ratings as ‘Strong’ to ‘Very Strong’. The agency notes that underwriting results have benefited from continued premium rate increases, although insurers still face pressures from claims inflation, elevated reinsurance costs and catastrophe-related losses.
At the same time, higher reinvestment yields have contributed positively to earnings. Fitch also observes that the three leading Japanese non-life insurance groups have reported improved results, supported in part by the disposal of strategic equity holdings and consistent underwriting performance from their international businesses.
In terms of investment risk, Fitch Ratings considers asset exposure to have a moderate influence on the ratings of Japanese insurers and a lower impact on other companies within the peer group.
While Japanese firms have previously increased allocations to higher-risk assets to enhance returns, the agency expects this exposure to decline over the coming years. This reflects planned divestments of domestic equity holdings, in line with regulatory expectations.
Fitch Ratings also highlights that QBE Insurance Group was upgraded in June 2025, attributing the change to sustained improvements in financial performance and continued strength in capital metrics. The agency notes that QBE’s underwriting outcomes have strengthened over the past three years, supported by premium increases and targeted measures to improve consistency in earnings.
As part of its analytical approach, Fitch Ratings assigns scores to nine principal credit factors that underpin insurers’ Insurance Financial Strength ratings.
These are expressed on a scale from ‘aaa’ to ‘c’, with each factor weighted according to its relative importance in determining overall ratings and outlooks, which may be Stable, Positive or Negative. The analysis draws on the most recent Insurance Ratings Navigator reports for each insurer, applying Fitch’s established insurance rating criteria.
