AM Best Affirms Credit Ratings of The Dai-ichi Life Insurance Company, Limited

AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of aa- of The Dai-ichi Life Insurance Company, Limited (DL) (Japan). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect DLs balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.

DLs very strong balance sheet strength assessment is supported by its risk-adjusted capitalization that is at the strongest level, as measured by Bests Capital Adequacy Ratio (BCAR). While the company has been gradually reducing its holdings, the concentration of common stock in its investment portfolio remains high, relative to its capital size, and this may expose the company to a certain degree of equity price risk. In addition, the financial leverage ratios of DLs holding company remain conservative, with adjusted debt leverage ratios generally under 25%.

DLs operating performance over the most recent five-year period has been consistently positive with an average ordinary profit exceeding JPY 300 billion (USD 2.7 billion). The recent fall in ordinary profit during fiscal year 2018 was mainly due to a decrease in interest income, and losses from derivative and foreign exchange transactions. However, DL continued to register growth in its core operating profit, driven by an increase in mortality/morbidity gains from DLs in-force portfolio.

DL is a wholly owned subsidiary of Dai-ichi Life Holdings, Inc. (DLH), which is one of Japans largest life insurance groups in terms of premium income. The group maintains a strong competitive market position in Japan through its multi-brand and multi-channel strategy by enhancing mutual distribution of products among its domestic subsidiaries and third-party agency channel. The group also seeks to expand its overseas insurance business, which currently accounts for approximately 20% of its adjusted profit and about 30% of the annualized net premium of new business.

The stable outlooks reflect AM Bests expectation that DL will maintain a strong and consistent operating performance, supported by an in-force book of business that is expected to generate positive core operating profit and a stable economic solvency ratio over the medium and long term.

Negative rating actions could occur if there is material deterioration in DLs risk-adjusted capitalization or sustained deterioration in the companys operating performance. Additionally, these ratings could be downgraded if there is a material deterioration in the credit profile of its ultimate parent.

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 Bests 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 Bests Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Bests Credit Ratings. For information on the proper media use of Bests Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Bests Credit Ratings and AM Best Rating Action Press Releases.

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Maggie Wu

Associate Financial Analyst

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Jason Shum

Associate Director, Analytics

+852 2827 3424

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Christopher Sharkey

Manager, Public Relations

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Jim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644

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