Tokio Marine Holdings Inc reported higher fiscal first-quarter profit, driven by improved underwriting results and stronger investment income in its international segment.
For the fiscal first quarter ending June 30, net income attributable to owners of the parent group rose to ¥197.3 billion ($1.37 billion) from ¥127.9 billion a year earlier.
Total premiums for the global insurance group fell to ¥1.38 trillion from ¥1.43 trillion.
In its financials, Tokio Marine noted higher gains from the sale of business-related equities, which were partly offset by adverse natural catastrophe effects, including hail damage in Hyogo, Japan, and an increase in auto loss costs in the Japanese property/casualty business.
Net incurred pretax natural catastrophe losses increased to ¥68.1 billion from ¥30.1 billion a year earlier. In Japan, April hail damage in Hyogo caused ¥49.5 billion in pretax losses, while a winter storm in North America resulted in ¥5.9 billion in insured losses.
Aggregated losses from four non-US billion-dollar catastrophes in the first half of the year are expected to cost insurers about $8.5 billion, according to the Cresta Industry Loss Index. Hailstorms in Hyogo Prefecture, Japan, are estimated to have caused $1.1 billion in losses.
In the international segment, total nonlife profit rose to ¥125.1 billion from ¥91.7 billion, as underwriting profit benefited from rate increases and investment income gains from assets under management growth, offset by higher than planned capital losses.
The combined ratio for Philadelphia Insurance Companies improved to 94.4 from 95.3. Delphi Financial Group’s combined ratio worsened to 93.7 from 92.8, while Tokio Marine HCC’s combined ratio improved to 86.1 from 87.8.
Philadelphia’s income improved despite a slight increase in natural catastrophe losses. Excluding catastrophes, the loss ratio was favorable, and investment income rose. Delphi’s income exceeded expectations due to a favorable loss ratio, even as capital losses were slightly higher due to unrealized losses for interest rate swaps.
TMHCC’s results surpassed expectations with a favorable combined ratio across all segments and higher investment income.
International net premiums written slightly exceeded the group’s plan, driven by strong rate increases and new business in North America. NPW rose to ¥813.6 billion from ¥686.8 billion.
Philadelphia Insurance Companies outperformed due to rate increases of 11% and new business. Delphi Financial Group exceeded expectations on strong underwriting in group life and disability. Tokio Marine HCC outperformed with expanded underwriting for accident and health, as well as lines such as marine and energy.
For TMHCC, a 2% rate increase, excluding accident and health, surety, and credit, was affected by rate reductions in directors and officers and financial lines. The group indicated that rate levels remain appropriate given prior increases.
In the Japan P&C segment, strong revenue performance was offset by higher loss costs in auto, partly due to inflation. The segment also experienced an impact from the Hyogo hail event and increased provisions for foreign currency-denominated reserves due to the depreciation of the yen. The Japan P/C combined ratio deteriorated to 99.5 from 96.0.
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