AM Best Affirms Credit Ratings of The Japan Ship Owners’ Mutual Protection & Indemnity Association

JANUARY 16, 2026 08:11 AM (EST)

AM Best Affirms Credit Ratings of The Japan Ship Owners' Mutual Protection & Indemnity Association

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FOR IMMEDIATE RELEASE

HONG KONG - JANUARY 16, 2026 08:11 AM (EST)
AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of "a-" (Excellent) of The Japan Ship Owners' Mutual Protection & Indemnity Association (Japan P&I or the Club) (Japan). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Japan P&I's balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The Club's risk-adjusted capitalisation is assessed at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR), and while its risk-adjusted capitalisation is susceptible to potential volatility from large claim losses given its relatively small capital base, the Club's ability to levy additional calls on its members, as evidenced by an unbudgeted supplementary call in fiscal-year ended March 2023 (FY2022), allows some financial flexibility. The Club has a conservative and liquid investment portfolio that mainly comprises cash and high quality fixed-income securities. Despite its moderately high dependence on reinsurance for writing large risks, the Club's credit risk is partially mitigated by the International Group of P&I Clubs' (IG Clubs) pooling agreements and joint reinsurance covers with reinsurers of good credit quality.

Japan P&I's operating performance in the most recent five years is largely in line with the global protection & indemnity (P&I) segment, which bears some level of volatility. The Club's average return-on-equity ratio and combined ratio for the last five years (FY2020-FY2024) stood at 10.4% and 99.2%, respectively, as calculated by AM Best. In FY2024, while the Club's net profit moderately decreased compared to the prior year when it recorded sizeable gains related to its foreign exchange, its underwriting profit showed a notable improvement due to reduced claims from its own members despite an increase in pool claims from other IG Clubs. The Club's stable stream of investment profits partially mitigates its inherent underwriting volatility, although it is subject to moderate impact from foreign exchange movements.

Japan P&I is one of the 12 clubs of the IG Clubs. The Club has a dominant market position in Japan's P&I industry, leveraging its long-standing relationships with shipowners and it benefits as a member of the IG Clubs. The Club also has developed an ERM framework and puts considerable effort into loss prevention activities.

Negative rating actions may occur if Japan P&I's balance sheet strength no longer supports the current assessment, for example, due to a material deterioration in risk-adjusted capitalisation driven by large claims. Negative rating actions also may arise if the Club's operating performance demonstrates a sustained and material deteriorating trend, for example, due to continued adverse underwriting results. Although considered unlikely in the medium term, positive rating pressure could arise if the Club demonstrates a sustained improvement in its operating performance over the medium term.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activityweb page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings (BCR), Best's Performance Assessments (PA), Best's Preliminary Credit Assessments (PCA) and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.