Fitch cuts its outlook on Japanese insurers to ‘Stable’

In its latest outlook, Fitch Rating made a downward revision to its outlook on Japanese life and nonlife insurers from ‘Positive’ to ‘Stable’.

Key points:

“Japanese insurers investment risks likely to rise in 2020.

Biggest risks for Japanese insurers will continue to stem from financial markets in 2020.

Expect insurers to boost their investments in foreign credit-spread products in search of yield amid the 'super-low' interest rates in Japan. 

Expects most Japanese traditional life insurers to raise exposure to unhedged foreign fixed-income securities as long as they expect volatility in the US dollar/Japanese yen rate to be limited, and as currency-hedging costs are likely to stay high.”