Research Update: NN Life Japan Upgraded To 'A' After Similar Action On Parent Following Criteria Revision; Outlook Stable

On Nov. 15, 2023, we published our revised criteria for analyzing insurers' risk-based capital (see "Insurer Risk-Based Capital Adequacy--Methodology And Assumptions"). Based on our new criteria, we upgraded our ratings on NN Group's core subsidiaries to 'A+' from 'A' on Dec. 21, 2023; the outlooks are stable. We revised up to 'a-' from 'bbb' our stand-alone credit profile on Japan-based NN Life Insurance Co. Ltd., primarily driven by its improved capital adequacy under our new criteria. We continue to view NN Life Japan as a strategically important subsidiary of NN Group, and therefore raised to 'A' from 'A-' our ratings on NN Life Japan and removed them from under criteria observation (UCO), where we placed them on Nov. 16, 2023;

...Key strengths Key risks Flexibility and agility in product design and sales strategies in Japan's corporate-owned life insurance (COLI) market. Business concentration in the Japan COLI market and relatively small business size compared with peers. High likelihood of financial support from the parent group if necessary, given ongoing support in capital, business base development, and risk management. Working on improving sales and risk management systems after a business improvement order, which exposed issues in governance and internal controls....

Research Update