MS&AD Insurance Group Holdings Inc. has reported a solid start to its fiscal year, with a notable increase in profits for the first quarter. The company announced net income of ¥222.7 billion, or about $1.51 billion, which marks a 9% rise from ¥204.2 billion in the same period last year. This boost in profit is largely attributed to better underwriting results and a decrease in losses from natural disasters.
The Japanese nonlife insurance sector saw particularly good results, with higher profits driven by increased premiums from auto and fire insurance products. The company noted that it faced fewer losses from natural catastrophes compared to the previous year, which also contributed to the improved financial performance. However, MS&AD did mention that auto insurance losses rose when excluding the impacts of natural disasters and foreign exchange fluctuations.
In terms of overall performance, direct premiums written for nonlife insurance climbed to ¥1.43 trillion from ¥1.26 trillion. The life insurance sector also saw a slight increase in gross premium income, reaching ¥376.3 billion, up from ¥375.4 billion a year earlier.
While the company’s domestic operations performed well, international results were mixed. The overseas segment reported an increase in net premiums due to growth in market share, particularly in Lloyd’s and reinsurance operations across Asia, Europe, and the Americas. However, net profit in the international segment fell to ¥45.3 billion from ¥53 billion. This decline was linked to drops in stock prices and foreign exchange losses affecting US dollar deposits in Asian markets. Profits grew in Europe and the Americas, but Asia faced challenges due to market conditions and currency issues.
The company also dealt with losses from California wildfires, which amounted to ¥17.4 billion. Despite these setbacks, MS&AD’s overall profit still showed growth thanks to improvements in other areas.
On the investment side, MS&AD experienced a decline in investment profits due to lower gains from selling strategic equity holdings and reduced income from dividends and interest. This decrease somewhat offset the positive results from underwriting.
In a strategic move, MS&AD announced plans to sell its entire stake in Australian financial services firm Challenger Ltd. to Dai-ichi Life Holdings Inc., representing about 15.1% of Challenger’s shares. This decision aims to enhance the company’s capital efficiency.
As the fiscal year for MS&AD ends on March 31, the company continues to maintain strong financial strength ratings, ranging from A+ to A-. The recent performance underscores the company’s resilience and adaptability in a challenging market.