Largest Japanese P&C Insurers achieve strong results

Japanese property and casualty insurers, namely Tokio Marine Holdings Inc., MS&AD Insurance Group Holdings Inc., and Sompo Holdings Inc., have reported strong financial results for the 2023 fiscal year, recovering from prior corporate scandals, according to S&P Global Market Intelligence report.

Tokio Marine Holdings

Tokio Marine emerged as the leader among the “Big Three” with a net income attributable to owners of ¥695.81 billion. This marks a substantial increase from the previous year’s ¥374.61 billion. The insurer’s adjusted net income rose by 60% year over year, reaching ¥11.6 billion. This growth was primarily due to reduced winter storm losses and increased capital gains from the sale of business-related equities.

Sompo Holdings

Sompo reported the most significant year-over-year increase in net income, reaching ¥416.05 billion, up from ¥26.41 billion. The insurer achieved a record adjusted consolidated profit of ¥291 billion, an increase of ¥138.8 billion year over year. The growth was driven by profit increases in its domestic property and casualty, overseas, and life insurance sectors.

MS&AD Insurance Group Holdings

MS&AD posted an attributable net income of ¥369.27 billion, up from ¥211.01 billion the previous year. The group generated a record-high adjusted profit of ¥379.9 billion, an increase of ¥157.7 billion year over year.

Japanese P&C Insurers Achieve Strong Results

Overall, these results highlight the resilience and recovery of Japan’s leading P&C insurers. They have successfully navigated past challenges and leveraged market opportunities to achieve significant financial growth.

Tokio Marine posted net incurred natural catastrophe losses of ¥88.7 billion for Japan and ¥79.1 billion for overseas business, the largest among the insurers. The totals were below the ¥96 billion for Japan and ¥80 billion for international projected in February 2023. The wildfires that ravaged Hawaii generated the biggest catastrophe loss for the insurer in fiscal 2023 at ¥36.1 billion.

Japanese P&C Insurers Achieve Strong Results

MS&AD also saw lower-than-projected net incurred losses from natural catastrophes from its domestic and overseas businesses at ¥113.4 million and ¥49.2 million, respectively. In November 2023, the insurer projected catastrophe losses of ¥127.0 million for its domestic business and ¥56.4 million for its overseas business.

The three insurers saw strong growth in net premiums written for the fiscal year, largely thanks to their overseas businesses.

Tokio Marine’s overseas business net premium totaled ¥2.232 trillion, up from ¥1.910 trillion, driven partly by steady rate hikes and expanded underwriting. The insurer’s domestic net premiums written was ¥2.593 trillion for the latest fiscal year, above the ¥2.560 trillion recorded in fiscal 2022.

Japanese P&C Insurers Achieve Strong Results

Sompo projects an adjusted consolidated profit of ¥255 bn for fiscal 2024, down from ¥291 bn in fiscal 2023. The insurer expects challenges in its domestic P&C insurance business, but strong overseas growth will balance this, according to Group CFO Masahiro Hamada during an earnings call.

Tokio Marine aims for at least 7% growth in adjusted net income, driven by rate hikes and underwriting expansion in its property and casualty business, as stated in an investor presentation.

Yana Keller  by Yana Keller