The rating on Sompo Japan Insurance Co. (Asia) Pte Ltd. (Sompo Japan Asia) reflects its strategic importance to its parent, Sompo Japan Insurance Inc. (Sompo Japan), as well as explicit support from Sompo Japan in the form of a net worth maintenance agreement. The company's standalone operating performance has been volatile, namely in its Offshore Insurance Fund (OIF) business. Moreover, the company's above industry average expense ratio, coupled with the hardening of reinsurance rates, is expected to remain a drag on underwriting results. Supportive parent group. Sompo Japan's commitment to Sompo Japan Asia is evident through both explicit and implicit support, including a strong balance sheet and high level of operational integration. Sompo Japan Asia plays an important role in
