Moody’s has rated Tokio Marine & Nichido Fire Insurance Aa3 for insurance financial strength, making it the only financial institution in Japan to top the country’s sovereign rating of A1.

The agency downgraded the sovereign rating from Aa3 last December, citing heightened uncertainty over the nation’s ability to cut its fiscal deficit.

Moody’s says Tokio Marine can sustain its rating because it has geographical diversification, strong financial fundamentals and “limited and manageable” exposure to Japanese government bonds.

Tokio Marine’s revenue from international business, while less than its domestic revenue, is the largest among its domestic peers.

“The group’s predominantly [property and casualty] focus means domestic operating performance is not as closely correlated with domestic economic conditions as for life insurers, insulating Tokio Marine’s credit quality from domestic sovereign stress,” Moody’s says.

Tokio Marine’s profitability is improving and it is making efforts to control its catastrophe risks and market risks, according to the agency. The insurer is an operating subsidiary of Tokio Marine Holdings, one of Japan’s three large general insurance groups.