Japan Post Insurance Co. Ltd. posted higher net income for the fiscal first half (H1 2025), even as the company experienced a decrease in both policy numbers and revenue. For the six months ending Sept. 30, net income attributable to the insurer reached ¥93.8 billion, up from ¥62.8 billion a year earlier. The company attributed the increase to a reduced regulatory requirement for new policy reserves, as well as lower claims and operating costs.
Investment income for the period declined to ¥619.7 billion from ¥641.2 billion. The number of in-force policies dropped by 3.1% to 18.2 million, and annualised premiums for these policies fell 3.4% to ¥2.76 trillion. New individual insurance business was particularly affected, with annualised premiums for new policies dropping 49.9% to ¥56.6 billion and the number of new policies issued decreasing 52.3% to 248,000. The insurer cited weaker sales of lump-sum whole life products as a primary factor.
Despite the contraction in new business, Japan Post Insurance reported a higher positive spread, excluding hedging costs related to foreign exchange. The value of new business declined 3.6%, reflecting the drop in new policy sales, but this was partially offset by higher interest rates. The company’s embedded value increased by 8.0% from the previous fiscal year-end, supported by gains in domestic equity markets.
In July, Japan Post Insurance announced a US$2 billion (approximately ¥300 billion) commitment to a new investment vehicle sponsored by Global Atlantic Financial Group LLC. The initiative, which is expected to launch in the first half of next year, is part of a collaboration with KKR & Co Inc and Global Atlantic. According to the companies, Japan Post Insurance will provide more than half of the vehicle’s capital, which will have access to Global Atlantic’s insurance and reinsurance operations.
The partnership, which began over two years ago, is part of the company’s plan to expand business activities outside Japan and broaden its sources of income. The insurer indicated that the investment will be made in stages and is not expected to have a significant impact on consolidated financial results for the fiscal year ending March 31, 2026.
Kunio Tanigaki, director and representative executive officer, president, and CEO of Japan Post Insurance, said: “We believe that this investment will enable Japan Post Insurance to diversify our revenue sources by capturing revenues from the robust US annuity market and reinsurance markets globally and continue to build on our win-win relationship with KKR and Global Atlantic.”
Japan Post Insurance’s recent financial results and plans for new investments come at a time when the broader Japan Post Group is also focusing on strengthening compliance and governance. As part of its next medium-term management plan, the group has introduced measures to address internal controls following recent incidents of misconduct, such as unperformed roll calls. “We are committed to strengthening compliance and governance as a top management priority, and we will mobilise the full resources of the group to thoroughly prevent any recurrence,” the company said.
The planned steps include revising internal rules and regulations, updating systems to meet legal and regulatory requirements, and providing compliance training for employees. The group also plans to set up new organisational units to support post office operations and to enhance oversight in risk management and compliance.
Japan Post Group is addressing long-term demographic and market changes, such as a declining and aging population, technological advancements, and a shrinking domestic market. The company identified diversification of service delivery, expansion of product offerings, and maintenance of regional infrastructure as key challenges for the next decade.
The group plans to adjust its core business areas by integrating logistics, real estate, and financial services. Over the next three years, it intends to increase logistics activities, make changes to last-mile delivery processes, and use post offices for additional community services. In insurance, Japan Post Insurance plans to add to its sales channels, modify asset management practices, and continue working with business partners.
The group is also investing in digital infrastructure, combining physical and digital channels for its operations. The company’s capital policy includes maintaining stable dividends and considering share repurchases, with a focus on achieving a return on equity above the cost of capital. It stated that these measures are part of its approach to managing financial stability and shareholder returns.
