AM Best Affirms Credit Ratings of Tokio Marine & Nichido Fire Insurance Co., Ltd. and Its Subsidiaries
HONG KONG, September 25, 2026--AM Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of "aa+" (Superior) of Tokio Marine & Nichido Fire Insurance Co., Ltd. (TMNF) (Japan) and its subsidiaries. TMNF is the wholly owned non-life insurance operating subsidiary of Tokio Marine Holdings, Inc. (TMH). The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the U.S. subsidiaries.) These companies are collectively referred to as TMH.
The ratings reflect TMH's balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, very favourable business profile and very strong enterprise risk management (ERM). AM Best views TMNF as integral to the TMH group, given its financial, operational and strategic importance as TMH's core non-life insurance operating entity. Accordingly, the ratings of TMNF are based upon the credit fundamentals of TMH, which are then extended to TMNF.
TMH's balance sheet strength is supported by its risk-adjusted capitalization being at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR). The group's economic solvency ratio was 268% as of 31 March 2026, well above its target range and the 100% regulatory requirement under Japan's new economic value-based solvency regime. The group maintains highly conservative financial leverage and strong interest coverage, with an adjusted financial leverage ratio of 5.8% as of 31 March 2026, as calculated by AM Best, including credit for subordinated bonds. As one of the largest listed insurance groups in Japan, TMH benefits from strong financial flexibility and good access to equity and debt capital markets when needed. While the group remains exposed to equity risk and growing underwriting risks from overseas expansion, it retains substantial capital to absorb potential volatility. The group has accelerated its strategic equity disposal programme, targeting full disposal by fiscal-year 2029, which is expected to reduce its overall equity risk exposure materially over the medium term.
TMH's operating performance remained strong in fiscal-year 2025, supported by resilient domestic underwriting and improving profitability in its international operations. The group adopted International Financial Reporting Standards (IFRS) in fiscal-year 2025, reporting insurance revenue of JPY 7,694 billion and an insurance service result of JPY 1,150 billion. Its domestic non-life operations reported an improved combined ratio in fiscal-year 2025, supported by lower natural catastrophe losses and accumulated fire insurance rate revisions, despite persistent inflationary pressure on automobile claims. TMH's overseas business performance continued favourable performance, led by strong profit growth in North America. TMH again exceeded its annual disposal target of strategic equity holdings, offloading JPY 746 billion against a plan of JPY 600 billion. While the realised gains on these disposals no longer pass through reported earnings under IFRS, they contribute directly to the group's capital base, and AM Best expects the redeployment of the proceeds into interest-bearing assets and business investment to more than offset the lost dividend income over time.