NN Life Insurance Co. Ltd.

The stable outlook on NN Life Japan reflects outlooks on the core subsidiaries of NN Group. It also incorporates our view that NN Life Japan will remain a strategically important subsidiary of NN Group. We may consider a downgrade in the coming two years in any of the following scenarios: We lower our ratings on NN Group's core subsidiaries; We revise down the stand-alone credit profile (SACP) for NN Life Japan to 'bbb-' or below from the current 'a-'; or We revise down our assessment of NN Life Japan's group status to nonstrategic from strategically important, although the likelihood of this happening is low. We may consider an upgrade in the coming two years if we upgrade NN Group's core

...NN Life Japan is likely to maintain adequate competitiveness in Japan's life insurance market despite challenges such as governance and business concentration, in our view. Japan-based NN Life Insurance Co. Ltd. (NN Life Japan) received a business improvement order from Japan's Financial Services Agency (FSA) in 2023 because of inappropriate development and solicitation tied to overemphasizing tax-saving benefits of its insurance products. In response, the insurer has been taking measures to improve governance, such as reviewing its sales system and strengthening its risk management system. We therefore predict the insurer's sales of new policies will fall for the time being. In addition, we view its concentration on COLI business and relatively small business scale as challenges. Its strengths include a flexible business strategy, high profit margin, and support from parent NN Group, a Dutch insurance giant. We think these factors will likely continue to make up for its weaknesses. In...

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