Nine of the 10 major life insurers in Japan are looking to increase their investments in Japanese government bonds (JGBs) due to an expected shift in the Bank of Japan’s policy that will see a rise in interest rates.
These major life insurers will raise their portfolio of superlong-term 20- to 40-year JGBs in 2023 for a total increase of $14.7 billion. In 2025, the country is set to introduce new capital standards that will give a more accurate view of the financial strength of the life insurance sector. In order to limit the expected impact of fluctuations in interest rates, life insurers need to reduce the gap between the durations of their assets and liabilities.
According to a report from Nikkei Asia, many of the life insurers cited the inflation and monetary policy in Japan, US, and Europe as factors that could potentially change their investment plans. That said, all 10 of the major life insurers’ plans suggest that they will play their role as buyers as the buying window comes around.
Elsewhere in the country’s non-life sector, Sompo Holdings is shifting its focus to integrating its domestic and overseas operations for further growth.
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