Tokio Marine Holdings Inc., MS&AD Insurance Group Holdings Inc. and Sompo Holdings Inc. put a series of corporate scandals behind them to post strong results for the 2023 fiscal year.

Of the "Big Three" Japanese P&C insurers, Tokio Marine logged the highest net income attributable to owners of the parent at ¥695.81 billion for the period, a significant year-over-year increase from ¥374.61 billion. The insurer's adjusted net income grew 60% year over year to ¥11.6 billion due to reduced winter storm losses and increased capital gains from the sale of business-related equities, according to an investor presentation.

Sompo reported the largest year-over-year increase in attributable net income at ¥416.05 billion, up from ¥26.41 billion. The insurer posted a record adjusted consolidated profit of ¥291 billion in fiscal 2023, up by ¥138.8 billion year over year This was supported by adjusted profit growth in the insurer's domestic property and casualty, overseas, and life insurance businesses, the company said in its earnings presentation.

MS&AD's attributable net income was ¥369.27 billion for the fiscal year, up from ¥211.01 billion a year ago. The insurer generated a record high group adjusted profit of ¥379.9 billion, up by ¥157.7 billion year over year. The insurer's overseas business contributed significantly to the group adjusted profit growth based on data presented during an earnings call.

Benign cat losses

Tokio Marine posted net incurred natural catastrophe losses of ¥88.7 billion for Japan and ¥79.1 billion for overseas business, the largest among the insurers. The totals were below the ¥96 billion for Japan and ¥80 billion for international projected in February 2023. The wildfires that ravaged Hawaii generated the biggest catastrophe loss for the insurer in fiscal 2023 at ¥36.1 billion.

MS&AD also saw lower-than-projected net incurred losses from natural catastrophes from its domestic and overseas businesses at ¥113.4 million and ¥49.2 million, respectively. In November 2023, the insurer projected catastrophe losses of ¥127.0 million for its domestic business and ¥56.4 million for its overseas business.

Sompo's net incurred losses from overseas natural disasters were lower than expected at $324 million, compared with the forecast $463 million. US tornadoes, Cyclone Gabrielle and the Hawaii wildfires were some of the biggest international catastrophe events for the insurer in 2023. In Japan, an August hailstorm, July flooding and a couple of typhoons generated ¥104.3 billion in catastrophe losses for the insurer, in line with its projection for the fiscal year.

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Solid overseas business performance

The three insurers saw strong growth in net premiums written for the fiscal year, largely thanks to their overseas businesses.

Tokio Marine's overseas business net premium totaled ¥2.232 trillion, up from ¥1.910 trillion, driven partly by steady rate hikes and expanded underwriting. The insurer's domestic net premiums written was ¥2.593 trillion for the latest fiscal year, above the ¥2.560 trillion recorded in fiscal 2022.

Sompo overseas net premiums written was ¥1.442 trillion, up from ¥1.380 trillion. Its domestic net premiums written decreased to ¥2.177 trillion from ¥2.225 trillion.

New business, rate hikes and the impact of foreign exchange bolstered MS&AD's overseas business, resulting in ¥1.234 trillion of net premiums written, compared with ¥932.90 billion a year earlier. The insurer had the largest domestic net premiums written among the three at ¥3.026 trillion in fiscal year 2023, up from ¥3.000 trillion in the prior fiscal year.

Mixed adjusted earnings outlook

Sompo is guiding for an adjusted consolidated profit of ¥255 billion for fiscal 2024, lower than the ¥291.0 billion recorded for fiscal 2023. The insurer anticipates a challenging start for its domestic P&C insurance business, which will be offset by strong growth of overseas business, Group CFO Masahiro Hamada said during an earnings call.

Tokio Marine aims to deliver an adjusted net income growth of at least 7%, relying on rate hikes and underwriting expansion in the property and casualty business to achieve the target, according to an investor presentation.

MS&AD expects its fiscal 2024 group adjusted profit to increase by ¥250.0 billion year over year to ¥630.0 billion, mainly due to the sale of cross-shareholdings, according to an earnings presentation.