Tokio Marine has issued its latest trading update for the opening half of its financial year, here are the details;
Key Figures
Bottom-Line
l Group 1H adjusted net income amounted to JPY771.2 billion (Approx USD4.98 billion).
l High progress rate versus initial forecast at 77%.
l The full-year forecast is revised upward by JPY40 billion (Approx USD258 million) to JPY1.04 trillion (Approx USD6.71 billion), due to factors such as accelerated sales of business-related equities and strong international underwriting, which are offset with CECL provisions related to CRE loans.
Top-Line
l For 1H, net premiums written rose by 5.7% year-on-year (excluding forex effects) due to rate increases in Japan and internationally, while life insurance premiums fell by -32.9% due to block reinsurance in Japan Life, both aligning with initial forecasts.
l For the full-year forecast, net premiums written are expected to rise by +5.3% year-on-year (excluding forex effects) due to stricter underwriting in Japan P&C. Life insurance premiums are forecasted to drop by -15.9% year-on-year (excluding forex effects).
Key Themes
l Underwriting trend remains favourable.
Ø Foreign exchange gains and strong international underwriting (and sales of business-related equities outpacing initial plan) led to a 1H adjusted net profit of JPY 771.2 billion (Approx USD4.98 billion).
l Full-year forecast revision
Ø The full-year forecast is revised upward by JYP40 billion (Approx USD258 million) to JPY1.04 trillion (Approx USD6.71 billion), due to factors such as accelerated sales of business-related equities and strong international underwriting, which are offset with CECL provisions related to CRE loans.
Ø The normalized full-year forecast remains unchanged at JPY 1.024 trillion (Approx USD6.61 billion), considering strong underwriting in North America and Brazil, offset by lower profits in Asian life insurance.
l Expansion of shareholder returns consistent with profit growth
Ø Due to strong profit growth exceeding the initial forecast, the DPS for fiscal year 2024 will be increased by JPY 3 to JPY162.
Ø Additionally, comprehensively considering the M&A pipelines including today’s announcement of the TOB for ID&E Holdings, and the impact on EPS growth, the share buyback for 2024 will be expanded by JPY20 billion (USD129 million) to JPY220 billion (USD1.42 billion).
Satoru Komiya, Group CEO, said: “Our performance for the first half of the fiscal year was driven by our global diversification, bottom-line-focused strong underwriting and robust investment income. It showcases our balanced portfolio and ability to consistently deliver sustainable growth.
Increasing shareholder returns, including increased DPS and share repurchases, underscore our commitment to sustainable growth and delivering strong financial performance and value to shareholders. Furthermore, through this EPS growth and disciplined capital policy, we will further enhance our ROE.”
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