HONG KONG — January 30, 2026
Executive Summary
AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa-” (Superior) of Nippon Life Insurance Company (Nissay) in Japan. Concurrently, the rating agency has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Nippon Life Insurance Company of America (NLB), the U.S.-based subsidiary of Nissay headquartered in West Des Moines, Iowa. The outlook for all affirmed ratings is stable. According to AM Best, the affirmations reflect Nissay’s strongest balance sheet strength, strong operating performance, favorable business profile, and appropriate enterprise risk management, as well as NLB’s strongest risk-adjusted capitalization, favorable liquidity, and established market position.
Announcement Overview
AM Best announced the affirmation of the credit ratings of Nippon Life Insurance Company and its subsidiary, Nippon Life Insurance Company of America, following its review of their financial profiles, operating performance, and risk management frameworks. The affirmations apply to both companies’ Financial Strength Ratings and Long-Term Issuer Credit Ratings, with stable outlooks assigned across all ratings.
According to AM Best, the ratings of Nippon Life Insurance Company reflect its balance sheet strength, which the agency assesses as strongest, alongside strong operating performance, a favorable business profile, and appropriate enterprise risk management practices. The affirmation also considers the company’s capital adequacy, asset-liability management approach, and ability to absorb financial market volatility.
For Nippon Life Insurance Company of America, AM Best stated that the affirmed ratings reflect its strongest balance sheet strength assessment, supported by risk-adjusted capitalization measured by Best’s Capital Adequacy Ratio (BCAR), favorable liquidity, and a high-quality investment portfolio. The subsidiary’s ratings also incorporate its operating performance, business concentration, and risk profile within the U.S. insurance market.
Key Announcement Details
- Announcement type: Credit ratings affirmation
- Rating agency: AM Best
- Rated entities: Nippon Life Insurance Company; Nippon Life Insurance Company of America
- Financial Strength Ratings:
- Nippon Life Insurance Company: A+ (Superior)
- Nippon Life Insurance Company of America: A- (Excellent)
- Long-Term Issuer Credit Ratings:
- Nippon Life Insurance Company: “aa-” (Superior)
- Nippon Life Insurance Company of America: “a-” (Excellent)
- Outlook: Stable (all ratings)
- Geographic scope: Japan and United States
Strategic Context
According to AM Best, the affirmation of Nippon Life Insurance Company’s ratings reflects a combination of balance sheet resilience, consistent operating results, and disciplined risk management amid a volatile global financial environment. The agency’s assessment incorporates both quantitative measures, such as capital adequacy and earnings metrics, and qualitative considerations, including business profile and governance practices.
AM Best noted that life insurers operating in Japan continue to face challenges related to interest rate volatility, equity market exposure, and demographic trends. Within this context, Nissay’s substantial capital base, conservative financial leverage, and asset-liability management practices were cited as factors supporting its strongest balance sheet strength assessment.
For Nippon Life Insurance Company of America, AM Best’s affirmation reflects the subsidiary’s capitalization strength and liquidity position, balanced against its business concentration and competitive dynamics in the U.S. group major medical market. The agency stated that the stable outlooks indicate expectations that both companies will maintain their current financial profiles over the intermediate term.
Balance Sheet Strength Assessment: Nippon Life Insurance Company
AM Best stated that Nippon Life Insurance Company’s balance sheet strength assessment reflects its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). This assessment is underpinned by the company’s substantial capital base, which totaled JPY 8.7 trillion as of 31 March 2025.
According to the rating agency, while Nissay’s absolute capital declined year over year from an exceptionally high level recorded in the prior fiscal year, the movement primarily reflected a decrease in unrealized gains on securities investments amid adverse financial market conditions. This followed a material increase of 52% in the company’s capital base to JPY 10.5 trillion as of 31 March 2024.
From a longer-term perspective, AM Best reported that Nissay’s capital position remains resilient. The agency noted that the company’s capital base subsequently recovered to JPY 9.9 trillion as of September 2025, demonstrating its ability to absorb market volatility and maintain financial flexibility.
The balance sheet strength assessment is further supported by Nissay’s conservative financial leverage, sophisticated internal capital assessment capabilities using economic solvency ratios, and a prudent asset-liability management strategy. According to AM Best, these practices are aimed at reducing potential interest rate risk amid an increasingly volatile interest rate environment.
While Nissay remains exposed to moderate equity and interest rate risks due to its sizeable securities portfolio, AM Best stated that the company’s substantial available capital provides a solid cushion against such risks. The agency expects the acquisition of Resolution Life Group Holdings Ltd., completed in October 2025, to have a limited impact on Nissay’s balance sheet fundamentals, although some erosion of risk-adjusted capitalization is anticipated given the scale of the transaction.
Operating Performance: Nippon Life Insurance Company
In the fiscal year ended 31 March 2025, AM Best reported that Nippon Life Insurance Company demonstrated stable and resilient operating performance. The company generated consolidated insurance and service revenue of JPY 8.4 trillion, including premium income of JPY 7.9 trillion, alongside core operating profit of JPY 1 trillion.
According to the agency, this performance continued into the first half of fiscal year 2025 and was supported by a significant expansion in investment yield margins. AM Best attributed this expansion to higher reinvestment yields, growing dividend income, and profit contributions from recent overseas acquisitions.
Despite a volatile macroeconomic and financial market environment, Nissay has maintained a relatively stable return on equity over the past five fiscal years. AM Best stated that, over the long term, the company’s large and stable in-force book of business in Japan, combined with a gradually improving earnings mix and expanding overseas operations, positions it to achieve sustainable core operating profits.
Business Profile and Market Position: Nippon Life Insurance Company
AM Best noted that Nippon Life Insurance Company remains one of Japan’s leading life insurers, with an estimated market share of approximately 19% in terms of premium income for fiscal year 2024. The agency cited the company’s extensive sales representative base and diversified distribution channels as factors supporting its market position.
According to AM Best, Nissay continues to leverage acquisitions and targeted new ventures to reach a broader customer base and support sustainable revenue generation in its domestic market. These initiatives complement the company’s established distribution infrastructure and long-standing customer relationships.
The agency also highlighted Nissay’s ongoing efforts to strengthen its asset management and related businesses. This includes subsidiaries operating in Japan and India, strategic investments in asset management firms in the United States, and recent expansion into healthcare-related services. According to AM Best, these activities are intended to support longer-term business diversification.
Overseas Expansion and Strategic Transactions
AM Best reported that Nissay has recently advanced its overseas expansion strategy through a series of transactions aimed at enhancing geographic and earnings diversification. These include the acquisition of a minority stake in Corebridge Financial and the full acquisition of Resolution Life Group Holdings Ltd.
According to the agency, these transactions mark a significant shift in Nissay’s overseas business profile and materially enhance earnings diversification beyond its domestic Japanese market. While the acquisitions introduce additional complexity and integration considerations, AM Best stated that the impact on the company’s balance sheet fundamentals is expected to be manageable.
The agency noted that continued execution discipline and risk management will remain important as Nissay integrates these overseas operations and navigates evolving global market conditions.
Rating Outlook and Potential Rating Actions: Nippon Life Insurance Company
AM Best stated that negative rating actions could occur if there is a material and sustained deterioration in Nissay’s balance sheet metrics. This could result from a substantial increase in investment or underwriting risk, including risks associated with large business acquisitions.
Negative rating actions could also occur if there is a material and prolonged deterioration in operating performance, such as a significant decline in core operating profits. Conversely, positive rating actions could occur if Nissay further enhances its business profile to demonstrate an indisputable market leadership position with strong brand recognition in both domestic and overseas markets.
Balance Sheet Strength Assessment: Nippon Life Insurance Company of America
The ratings of Nippon Life Insurance Company of America reflect its balance sheet strength, which AM Best assesses as strongest. According to the agency, this assessment is supported by the subsidiary’s risk-adjusted capitalization, as measured by BCAR, as well as its favorable liquidity position and high-quality investment portfolio.
AM Best reported that NLB experienced capital growth through the third quarter of 2025, despite paying dividends to its parent company, Nissay. The agency stated that the subsidiary’s capitalization remains well above the level required to support its risk profile.
Operating Performance and Business Profile: Nippon Life Insurance Company of America
According to AM Best, Nippon Life Insurance Company of America demonstrates adequate operating performance, supported by its established presence in specific market segments. However, the agency noted that the company’s business profile remains limited, with concentration in the group major medical market and operations focused in certain U.S. states.
AM Best stated that the group major medical market is highly competitive and that NLB has experienced volatility within this segment in recent years. The agency also noted challenges related to minimum loss ratio requirements, which have required the company to pay rebates.
Despite these factors, AM Best reported that NLB maintains an established market position in Asian markets within the United States. This position is supported by strong customer service and very high customer retention rates.
Outlook and Strategic Direction: Nippon Life Insurance Company of America
According to AM Best, NLB expects continued improvement in sales and premium levels in the near term. The company also plans to expand into new markets within the United States to support additional revenue opportunities.
The stable outlook assigned to NLB’s ratings reflects AM Best’s expectation that the subsidiary will maintain its capitalization strength, liquidity position, and market presence while managing competitive pressures and regulatory requirements.
Ratings Communication and Disclosures
AM Best stated that ratings are communicated to rated entities prior to publication and, unless otherwise stated, are not amended subsequent to that communication. The credit ratings referenced in this announcement have been published on AM Best’s website.
For additional rating information and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings, AM Best directs readers to its Recent Rating Activity web page. The agency also provides guidance on the use and limitations of credit rating opinions through its Guide to Best’s Credit Ratings and related publications.
About AM Best
AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore, and Mexico City.
AM Best provides credit ratings, financial strength assessments, and analytical insights that support decision-making across the insurance sector. Additional information about AM Best and its services is available through the company’s corporate website.
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Source Attribution
Source: Company announcement