Asahi Mutual Life Insurance has seen notable improvements in its capital strength and profitability, according to a recent assessment by Fitch Ratings. The company’s enhanced financial position is underscored by its robust underwriting practices and a reduction in the negative spread.
Fitch projects that Asahi Life will continue to experience positive growth in both profitability and capital strength.
In the financial year ending March 2024 (FY 2024), Asahi Life’s capital adequacy improved significantly, bolstered by substantial capital accumulation despite market volatility. Fitch anticipates that this upward trend will persist, supported by continued strong underwriting and steady capital growth.
The company’s profitability has notably rebounded, with its core profit margin rising to 16% in the first half of FY 2025. This marks a substantial improvement compared to 10% during the same period in FY 2024. This recovery follows a sharp decline to just 4% in FY 2023, largely due to the impact of pandemic-related hospital claims. However, with pandemic restrictions easing, the company’s profitability has not only rebounded but now exceeds pre-pandemic levels.
Asahi Life has also seen a significant reduction in its negative spread, which fell to $6.4 million (JPY 1 billion) in the first half of FY 2025, down from $110 million (JPY 18 billion) a year ago. Fitch predicts that the negative spread will continue to shrink and may even turn positive in the coming years, as average guaranteed yields continue to decrease.
The company’s market share in the health insurance segment grew to 4% by FY 2024, reflecting a growing emphasis on this area.
The exchange rate used is $1.00 = JPY 157.4.
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