The 'A+' local currency financial strength rating on Sompo Japan Insurance (Singapore) Pte. Ltd. (SJ Singapore) reflects the company's strategic importance to the business strategy in Asia of its parent, Sompo Japan Insurance Inc. (Sompo Japan; AA-/Stable/--). The insurer receives strong explicit support from Sompo Japan through a net worth maintenance agreement under which the parent guarantees policyholders' liabilities. The rating also reflects the company's satisfactory stand-alone financial profile, characterized by robust capitalization, a favorable financial performance, and conservative investment allocation. These strengths are tempered by SJ Singapore's limited competitive position within Singapore's fragmented non-life insurance market. The insurer demonstrates its strategic importance to Sompo Japan by providing insurance support to the group's key clients that have operations in Asia.
