Japanese property and casualty insurance group Tokio Marine Holdings, Inc. has reported a 39% decrease in profits over the nine-month period ending December 31, 2020.
Ordinary profit stood at 182.4 billion yen (USD 1.742 billion) for the period in 2020, versus 299.2 billion yen in the previous year.
In particular, Tokio Marine noted that the COVID-19 pandemic weighed down the results of its international business, which collectively reported a 53.4% drop in profits.
International business unit profits came to 61.2 billion yen in 9M 2020, down from 140.6 billion in the 2019 period.
In North America, profits decreased due to COVID-19 and an increase in natural catastrophes, Tokio Marine said, despite reserve changes and beneficial rate increases.
The pandemic also drove the deterioration in performance across the European area, although in South and Central America COVID-19 resulted in a significant decline in car accidents, which boosted profits.
Finally, in Asia and Oceania there was a decline in car accidents associated with COVID-19, but overall profits were down due to an increase in reserves for trade credit insurance.
Of the 86.0 billion yen decline in international profits, 54.0 billion yen was related to underwriting (mainly event cancellation, business interruption and trade credit insurance) and 32.0 billion yen was related to investments.
Net premiums written remained mostly flat YoY for international business on a local currency basis, as a 55.0 billion yen decline associated with COVID-19 and bottom line-focused underwriting was offset with favorable rate increase.
In the core North America segment, premiums rose 6.5% YoY on a local currency basis excluding the impact of COVID-19, as Tokio Marine looked to capitalise on the hard market.
Tokio Marine’s overall natural catastrophe losses (after tax) amounted to 75.8 billion yen in 9M 2020, which was 57.3% lower than the 133.2 billion yen loss it incurred in 9M 2019.
Domestic business accounted for 54.6 billion yen of the total catastrophe billion, while international business took a 21.2 billion yen hit.
Tokio Marine’s combined ratio for the nine-month period in 2020 was 88.2%, which was an 8.7 point improvement on the 96.8% it reported for the same period in the previous year.
