Tokio Marine Holdings, Inc. has reported a decline in consolidated net income to JPY 259.7 billion in the fiscal year ended March 31st, 2020, while adjusted net income improved to JPY 286.7 billion on the back of improved results in domestic life and overseas insurance subsidiaries.
Consolidated net income declined year-on-year as losses on the divestment of reinsurance businesses and COVID-19 impacts offset a decline in natural catastrophes in Japan and strong investment results in North America.
Overall, net premiums written increased by more than 4% year-on-year on the back of growth in all domestic lines and overseas operations, somewhat offset by a decline in life insurance premiums in Japan and North America.
Within Tokio Marine & Nichido Fire Insurance Co., Ltd. (TMNF), the company notes that net investment income suffered from the absence of dividends after the divestment of reinsurance business in FY2018 and also impairment losses on securities. This divestment also had a negative impact on growth in certain areas of the business through the fiscal year.
Regarding the COVID-19 pandemic, Tokio Marine reveals that in Japan in 4Q in FY2019, the event had a JPY 4 billion negative impact on underwriting and a -JPY 20 billion impact on investments. Regarding underwriting, the firm says that this was mainly from payments for specialty products, while the investment hit is mainly from stock impairments.
Looking forward, and Tokio Marine says that it is too early to tell exactly how the pandemic might impact its FY2020 results, but does warn of a potential JPY 5 billion underwriting hit for key entities in Europe and the U.S. as a result of payments for event cancellation, and valuation losses and impairments of stocks to the tune of a potential JPY 32 billion.
