MS&AD Insurance Group's Core Subsidiaries

The stable outlooks on the core operating subsidiaries of MS&AD Insurance Group reflect our view that the group will maintain capital adequacy at the current level by accumulating retained earnings and reducing risks. It also reflects our view that it will retain a solid position in the Japanese non-life insurance market for the next two years. In addition, we believe MS&AD Insurance Group will further diversify earning sources by strengthening its Japanese life insurance business and its overseas business. We may lower the ratings on the group's core operating subsidiaries if we see a high likelihood that, contrary to our expectations, the group's prospective capital based on our capital model will deteriorate significantly and for a prolonged period. This could

...MS&AD Insurance Group is likely to maintain a very strong competitive position, backed by its solid market presence in Japan, in our view. We consider the group to have secured a leading position in Japan's non-life insurance market, backed by its well-established brand. The group also operates in life insurance business, helping to diversify earnings sources. In addition, it has been geographically diversifying earnings through acquisitions and investments. However, overseas business is not yet making full contributions to overall profit, in our view. Natural catastrophes and stock market swings, major risks for the group, will likely have less of an effect than we have factored into our assumptions for fiscal 2020. In Japan, we have not this year seen massive natural disasters as we did in the previous two years, when the group paid a large amount of insurance claims. Furthermore, financial market volatility because of COVID-19 has settled down. Consequently, the year-on-year decline...

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