Release Date: February 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Group adjusted profit increased by 44.9% year-on-year to JPY102.1 billion, surpassing initial forecasts.
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Sales results of new policies for all three life insurance companies progressed favorably, leading to an upward revision of the full-year forecast.
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Value of new business increased by JPY1.6 billion year-on-year, with forecasts revised upwardly.
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Group MCEV increased by 5.5% from the previous fiscal year, indicating strong financial health.
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The company expects to achieve its long-term vision target of JPY130 billion in group adjusted profit one year ahead of schedule.
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Capital gains decreased year-on-year due to losses on bond sales for cash flow matching purposes.
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Surrender and lapse rates increased, impacting the annualized premiums negatively.
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The company expects to record an impairment loss of approximately 0.5 billion yen in commercial mortgage loans.
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Operating expenses are expected to rise due to increased personal costs and retirement benefit liabilities.
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The company anticipates equity and losses of affiliates due to rising US interest rates, impacting financial results.
Q: Can you provide insights into next year’s performance, considering the positive spread and potential reactionary downturns from gains? A: The positive spread will continue to be a key earnings driver next year. We expect an increase in interest and dividend income due to bond replacements and reduced FX hedging costs. Operating expenses will rise due to wage increases, but insurance income should offset these costs, maintaining a flat trend. (Respondent: Unidentified_1)
Q: What is the current status of shareholders’ return and excess capital? A: As of December, the free surplus exceeding 225% ESR is about JPY330 billion. After accounting for share buybacks and bond redemptions, the remainder will be allocated to investments or shareholder returns. No major changes in our investment pipeline of JPY150 billion. (Respondent: Unidentified_1)
Q: How is the surrender and lapse rate impacting the EV, and what are the expectations for future revisions? A: The surrender and lapse rate’s impact on EV has stabilized, with a modest deterioration in Q3. The 10-year average will gradually deteriorate, but the one-year average is stabilizing. Future revisions may occur, but the impact is expected to be minimal. (Respondent: Unidentified_2)
Q: What factors contributed to the upward revision of the value of new business from JPY160 billion to JPY180 billion? A: The upward revision is primarily due to a rise in interest rates, which contributed more significantly than the volume increase. (Respondent: Unidentified_1)
