Fitch has upgraded its financial strength rating for Dai-ichi Life to A+ from A, while maintaining its negative outlook.

The ratings agency says the one-notch upgrade follows the life insurer’s successful international expansion.

“This is driven mainly by its successful integration of Australia-based TAL Group and US-based Protective Life Corporation. In Fitch’s view, only insurers with very good credit quality and sizeable international business diversification can be rated above the sovereign rating.

“Insurance groups that generate 20% or more of their net premiums from international business sources on a sustained basis would be considered as having sizeable international business diversification.”

The ratings report says Dai-ichi derives more than 20% of its consolidated annualised inforce premium outside Japan – considerably more than other Japanese life insurers.

Fitch expects Dai-ichi’s international insurance businesses to continue steadily growing, partly supported by Protective’s sustainable organic growth.

It says an upgrade is unlikely in the near future because the rating is constrained by the sovereign rating, which is on negative outlook.