NU Online News Service, Dec. 6, 9:21 a.m. – Japanese life insurers still face big problems, according to a report from Moody’s Investors Service, New York.

The Japanese economy and investment markets have been weak since the mid-1990s, and the life insurers also face a saturated market and consumer skepticism about their stability, Moody’s analysts write.

“The recovery efforts of individual life insurers appear to be ineffective, while growing concerns over the weaker players have led to insecurity about the industry as a whole,” the analysts write. “We believe that the structural changes needed to restore the sector’s financial strength are unlikely to materialize over the medium term.”

Some experts in Japan have talked about easing pressure on the insurers by letting insurers lower guaranteed rates of return they promised consumers back when the insurers had an easier time earning solid returns on their own investments.

But, from the perspective of Moody’s analysts, a reduction in the guaranteed rates would be the equivalent of a default, the analysts write.

So far, the analysts add, Moody’s does not believe that a mandated industry-wide rate reduction is likely.