NU Online News Service, Dec. 6, 1:52 p.m. – Standard & Poor’s, New York, says the Japanese life insurance industry looks even weaker now than it did a year ago, because of weak sales, higher policy lapse rates and low earnings on investments.
“The outlook for the life insurance industry will continue to be negative for the foreseeable future,” S&P analysts warn in a report on life industry financial results for the first half of the Japanese fiscal year, which ended Sept. 30. “The capital adequacy of some insurers has become a critical issue.”
Japanese life insurers are struggling because Japanese bonds pay low rates, and a key Japanese stock index, the Nikkei Index, fell 25% between March 31 and Sept. 30.
Japanese accounting rules now require life insurers to use current stock prices, rather than purchase prices, when preparing asset totals for balance sheets.