From the end of March 2026, solvency reporting by insurance companies in Japan will need to be based on a new regulation. This solvency regulation incorporates an economic value-based approach and has been modified to suit the situation in Japan, based on the International Capital Standards (ICS) developed by the International Association of Insurance Supervisors (IAIS). The economic value-based solvency margin ratio (ESR), which is the ratio of qualifying capital to capital requirement, is used as a new indicator, and the minimum level is set at 100%. This report describes the method of calculating ESR for life insurance companies under new regulation (J-ICS), comparing it with ICS and EU Solvency II.
Report
ESR for life insurance companies under new Japanese solvency regulation
6 February 2026