21 November 2016 Insurance

Domestic P&C business boosts Sompo’s profits

Japan-based Sompo Holdings grew its consolidated net income by ¥14.8 billion to ¥43.4 billion ($390 million) between April and September driven by earnings growth in its domestic property/casualty (P&C) insurance business.

The adjusted profit of the domestic P&C business grew 18.9 percent over the period to ¥57.1 billion. Earnings in the segment grew because of a sharp increase in underwriting profit driven by an improvement of the E/I (earned-incurred) loss ratio, despite market conditions such as a strong yen, according to the company.

Its combined ratio (excluding CALI, (Compulsory Automobile Liability Insurance household earthquake) was 91.6 percent between April and September, lower than the expected 94.1 percent for the full (fiscal) year 2016. It said this was due to the improved profitability of automobile insurance and appropriate control of expenses amongst others, according to the company.

The underwriting profit at property insurer Sompo Japan Nipponkoa increased to ¥45.6 billion after a loss of ¥19.6 billion in the same period of 2015 due to improvements on fire and allied lines.

In the life business, policies in force kept expanding, and the bottom line has steadily progressed against full year business forecast of ¥6.5 billion, Sompo said.

Net income in the domestic life insurance business dropped 28.6 percent year-on-year in the first half of the 2016 fiscal year to ¥4.5 billion.

Overall, Sompo’s consolidated ordinary income shrank 1.2 percent to ¥1,654.8 billion in the first half of its 2016 fiscal year.

Sompo maintained the initial business forecast for the full year (April 2016 to March 2017) consolidated ordinary profit of ¥206.0 billion and consolidated net income of ¥140.0 billion.

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