Moody’s negative on Japan’s big P&C insurers

Ratings agency Moody’s has changed the outlooks on its ratings of some of Japan’s largest property & casualty (P&C) insurers to negative in the wake of the Japanese earthquake and tsunami. The negative outlook reflects the view that losses from the event will put pressure on the insurers profitability and capitalization benchmarks.

Moody’s also notes that the Japanese P&C insurance market already suffers from low to negative growth and with the threat of increased reinsurance costs after the disaster that will put further pressure on the sector.

Ratings on the following insurers have all been affirmed with a negative outlook:

• Tokio Marine & Nichido Fire Insurance Co., Ltd.
• Mitsui Sumitomo Insurance Co., Ltd.
• Sompo Japan Insurance Inc.
• Aioi Nissay Dowa Insurance Company, Limited

Any increase in costs from reinsurance for Japanese insurers could, of course, translate into an increased interest in capital markets risk transfer (such as cat bonds) in the region.

You can access the full article from Moody’s here.