MS&AD Insurance Group's Core Subsidiaries

The stable outlooks on the core operating subsidiaries of MS&AD Insurance Group reflect S&P Global Ratings' expectation that the group will maintain capital adequacy commensurate with our rating. This is even incorporating the likelihood of redemption of subordinated notes without refinancing and an acquisition of about ¥500 billion in the coming two years. 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 our ratings on the group's core operating subsidiaries if we see a high likelihood that, contrary to our

...Our base case scenario assumes MS&AD Insurance Group will maintain its very strong competitive position, thanks to its solid presence in the domestic non-life insurance market. The group maintains a leading position in Japan's non-life insurance market, backed by its well-established brand. It also operates in life insurance business, helping to diversify earnings sources. In addition, it has been geographically diversifying earnings through acquisitions and investments. However, its overseas business has yet to fully contribute to overall profit, in our view. We believe natural catastrophes and stock market swings remain the major risks for the group. The group is working to improve profitability of its fire insurance business and to reduce natural catastrophe risk. However, natural catastrophe risk remains a factor that could continue to make profit volatile. This is because natural disasters have become more severe globally. We also believe the group's capital will remain susceptible...

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