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Fitch anticipates resurgence in Japanese insurers' profitability


Fitch Ratings reports that the credit fundamentals of Japanese life insurers are predicted to stay strong in the fiscal year ending March 2024 (FYE24). A bounce back in overall profitability is anticipated, bolstered by the easing of pandemic-related restrictions and changes in hospitalisation rules. Despite a significant decline in aggregate core profits in FYE23, life insurers' capital adequacy is expected to remain satisfactory, largely thanks to steadily accumulated core capital and efforts to reduce interest-rate risk ahead of new regulatory measures in 2025. However, Fitch warns of potential market risks, including shifts in the yen bond yield curve, yen appreciation, foreign credit spread widening, or a crash in Japanese equities.

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