Tokio Marine plots 5% profit growth in fiscal 2022 on mild premium gain

Tokio Marine can leverage growth in non-life operations both at home and abroad to overcome the continued withering of its life segment and grow its group adjusted net profit by an FX-adjusted 5% in its coming fiscal year.

Bottom line growth over fiscal year 2022 will follow "anticipated continued improvement in domestic fire insurance, improvement in underwriting results overseas through the disciplined underwriting practices including rate increases, and an increase in investment income," management told markets in a presentation of FY guidance.

That rang of limited reliance on top-line gains. On its home market,  Tokio Marine expects a 3.2% rise in P&C net premiums written, led by 8.9% growth for fire and a 9.9% rise in its P.A. line on the rebound in travel and rising sales in medical, income protection and others.

In its foreign operations, FX-adjusted growth in P&C net written premiums will be only lightly higher at 5.7%, including 5.2% growth in the North American markets which account for nearly 3/4 of  Tokio's foreign non-life business. FX adjusted profits for the foreign P&C operations are expected to fall 3.3% on a 1.0% decline in North America and hard times in LatAm and APAC.

For the fiscal year which closed end-March 2022,  Tokio Marine is claiming a group adjusted net income of JPY 578.3bn, up 45% YoY and 3% above a projection adjusted as recently as February.

Restated to exclude one-off factors such as a decline in natural catastrophes, COVID-19 impact and capital gains in North America, the profit tally was up 13% year on year.

Domestic non-life enjoyed 1.2% growth in net premiums written. The combined ratio fell below full-year projections by -0.5 percentage points (pps) on a 1.9 pps decline to 90.6%.

Foreign P&C grew net premium written by 10.7% on an FX-adjusted basis to beat the latest project by 2.1%. Growth looked strongest in North American, up 13.2% year on year against drag from declines in Europe.

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.