MS&AD Insurance Group Holdings Inc. reported increased fiscal first-quarter profit thanks to stronger underwriting performance and reduced natural catastrophe losses.
The insurance group posted net income of ¥222.7 billion ($1.51 billion) for the quarter, up from ¥204.2 billion in the same period last year. The 9% increase reflected improved underwriting results across key business segments.
MS&AD’s nonlife insurance operations in Japan generated higher underwriting profit as earned premiums rose primarily from auto and fire insurance products. The company said it benefited from lower incurred losses from natural catastrophes compared to the previous year.
“Incurred losses excluding natural catastrophes fell due to foreign exchange impacts,” the company stated in its earnings presentation. However, auto insurance losses increased when excluding both natural catastrophe and foreign exchange effects.
Direct premiums written for nonlife insurance climbed to ¥1.43 trillion from ¥1.26 trillion. Life insurance gross premium income reached ¥376.3 billion, slightly higher than ¥375.4 billion in the prior year.
The group’s overseas operations showed contrasting performance across regions. Net premiums written increased due to market share growth in Lloyd’s and reinsurance operations, along with expansion in Asia, Europe, and the Americas.
However, international segment net profit declined to ¥45.3 billion from ¥53 billion. The decrease has been attributed to stock price declines and foreign exchange losses on US dollar deposits in Asian markets.
Europe and Americas saw profit growth, according to MS&AD, while Asia experienced lower profit due to market conditions and currency fluctuations.
The Lloyd’s and reinsurance segments faced headwinds from California wildfire losses totaling ¥17.4 billion, which were included in fiscal 2024 results. Despite this impact, these segments contributed to overall profit growth through improvements in general losses.
Investment profit decreased due to lower gains from strategic equity holdings sales and reduced dividend and interest income, including foreign exchange effects. This partially offset the strong underwriting performance.
MS&AD previously announced an agreement to sell its entire stake in Australian financial services firm Challenger Ltd. to Dai-ichi Life Holdings Inc. The stake represents approximately 15.1% of Challenger’s issued shares.
“MS&AD said it has been exploring an opportunity to further improve its capital efficiency and accepted a share purchase proposal from Dai-ichi Life Holdings at a sufficient premium over Challenger’s current stock price,” according to earlier reports.
MS&AD’s fiscal year ends March 31. The company’s underwriting entities maintain Best’s Financial Strength Ratings ranging from A+ (Superior) to A- (Excellent).
What are your thoughts on the company’s recent performance? Share your insights in the comments below.
