Fitch Ratings has affirmed Tokio Marine & Nichido Fire Insurance’s insurer financial strength rating at AA- with a negative outlook.

It says company profitability is likely to be maintained at a “healthy level” in the financial year to next March, thanks to premium increases.

Last financial year the combined operating ratio improved to 91.2% from 97.4%, partly because Tokio Marine continued to raise premium rates for its motor insurance business.

“The insurer financial strength rating reflects Fitch’s expectation that the company will maintain its strong capitalisation and robust franchise,” Fitch says.

The negative outlook is influenced by Japan’s sovereign rating, with about 35% of Tokio Marine Group’s investment assets in government bonds.