Japanese insurers’ international search for better investment returns to offset sluggish growth at home may pose the biggest risks to their businesses, Fitch Ratings warns.

“Sustained low yields in Japan lead insurers to seek higher yield by increasing credit risk, especially outside Japan, which entails some currency risk,” the ratings agency says.

“Interest rate risk, sharemarket risk, currency risk and credit risk are the most important for Japanese insurers.”

However, Fitch is keeping its sector outlook at stable and ratings outlook at positive.

Non-life insurers are expected to generate sufficient underwriting profit as they look to maintain or raise premium rates, it says.