Japanese insurance group MS&AD Insurance Group Holdings Inc. recently announced plans to inject roughly ¥70 billion (US$632.5 million) into its re/insurance subsidiary MS Amlin, in an effort to sustain the firm’s business model for future growth.
Following a loss in the 2017 financial year the insurance group has taken steps to improve the profitability of MS Amlin, stating that initiatives are already underway with all the relevant measures being considered.
In order to restore underwriting profitability, the group has said it will review underwriting terms and conditions with a focus on those business lines with decreased profits, while also strengthening monitoring by head office.
At the same time, the group is eager to lower cost by reviewing staffing, which could lead to a reduction in staff, personnel and expenses. For the full-year 2018 it expects to cut costs by roughly £40 million (US$53.2 million) and for the full-year 2019 it expects to cut costs by roughly £22 million (US$29.3 million).
The news comes from the group’s Fiscal 2018 First Information Meeting report, which underlines its commitment to becoming a world leading insurance and financial services group. The report states that the group plans to expand its international business through the earnings recovery of MS Amlin, which experienced a loss of £759 million for the 2017 fiscal year.
This expected international growth as a result of the recovery of MS Amlin is part of the group’s ‘Vision 2021’ plan, which also includes achieving group adjusted profit of ¥350 billion (US$3.1 billion) and a group adjusted return on equity (RoE) of 10% by the end of FY2021.