Fitch Ratings has assigned a first-time Long-Term Issuer Default rating of “A+” to Sompo Holdings, Inc. and published a “AA-” Insurer Financial Strength rating for core unit Sompo Japan Insurance Inc., both with stable outlooks, citing the company’s globally diversified operations, strong enterprise risk management, and ability to absorb natural catastrophe losses in Japan and the US.
The group continues to expand internationally, with overseas premiums projected to account for about 50% of non-life premiums and profits in FYE26, supported by its then planned and recently completed US$3.5bn acquisition of Aspen Insurance Holdings Limited to boost US specialty, Lloyd’s of London, and reinsurance operations.
Operating performance is improving, with Sompo Japan’s combined ratio falling to 90% in 1HFYE26 from 97% a year earlier due to premium rate increases in property and motor lines, while underwriting profitability is expected to strengthen further as pricing reflects rising catastrophe experience in Japan.
Catastrophe exposure remains manageable due to limited underwriting outside Japan and reinsurance protections, Fitch said.
Capitalisation remains “Very Strong” under the Fitch Prism Global Model, with the group targeting an economic solvency ratio of around 250% in FYE26 and planning to sell more than JPY200bn, or about 20%, of its listed domestic equity holdings in FYE26 to reduce risk exposure.
Fitch said investment risk is declining as domestic equities, which made up about 10% of assets at end-September 2025, are gradually divested with a full exit targeted by FYE31, while exposure to US commercial real estate and private credit remains limited and manageable. The group also noted that losses linked to the Iran conflict are expected to be contained due to war-exclusion clauses and negligible Middle East investment exposure.
“We expect the company’s accelerated equity divestitures to further enhance capital adequacy over the next five years,” Fitch said.
