| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥64360.3B | ¥59495.1B | +8.2% |
| Operating Income | - | - | - |
| Profit Before Tax | ¥7035.2B | ¥4585.0B | +53.4% |
| Net Income | ¥5161.3B | ¥3057.9B | +68.8% |
| ROE | 8.0% | 5.6% | - |
For the fiscal year ended March 2026, insurance revenue reached 6.44兆円 (YoY +¥4,869億 +8.2%), insurance service result (equivalent to operating income) was ¥5254B (YoY +¥1,970億 +60.0%), investment income was ¥2610B (YoY +¥269億 +11.5%), and profit attributable to owners of the parent was ¥5106B (YoY +¥2,104億 +70.1%). The large improvement in insurance service results and expansion of investment income jointly drove wide-based profit growth led by overseas operations (profit for the period ¥2344B, +32.2%), the two major domestic non-life insurers (Mitsui Sumitomo Insurance ¥1829B, +68.5%; Aioi Nissay Dowa ¥1189B, +75.9%), and Mitsui Sumitomo Primary Life (¥1273B, +149.7%). As the first fiscal year after the transition to IFRS 17, insurance finance result widened its negative impact (▲¥6708B vs prior year ▲¥1743B), but investment income of ¥9319B (prior year ¥4085B) and improvement in insurance service results more than offset this. A large impairment loss in the prior year of ¥885B was sharply reduced to ¥16B in the current year, and the disappearance of that one-off negative item also contributed to profit growth.
[Revenue / Net Sales]
Insurance revenue expanded to 6.44兆円 (+8.2%). The two major domestic non-life insurers increased revenue via rate revisions and risk selection: Mitsui Sumitomo Insurance ¥1.89兆円 (+4.9%), Aioi Nissay Dowa ¥1.38兆円 (+4.4%). Overseas business recorded strong growth of ¥2.51兆円 (+17.5%) driven by local-currency growth and yen weakness. Domestic life insurance: Mitsui Sumitomo Primary Life grew to ¥1.07兆円 (+9.2%) due to expansion of in-force policies, while Mitsui Sumitomo Aioi Life was ¥256.2B (+1.5%) showing only modest growth. Top-line growth was driven by overseas expansion and domestic non-life rate revisions; domestic life showed mixed in-force policy trends.
[Profitability]
Insurance service result improved significantly to ¥5254B (+60.0%, +¥1,970億). The combined ratio of the two major domestic non-life insurers was 93.6% (prior year 96.6%, improved ▲3.0pt), with loss ratio 65.5% (▲2.3pt) and expense ratio 28.2% (▲0.7pt) both improving. The drivers were rate revisions and a large reduction in domestic natural catastrophe losses (incurred claims for natural catastrophe ¥25.3B, prior year ¥90.1B), with strengthened risk selection and reinsurance utilization contributing. The overseas business combined ratio also improved to 92.1% (▲1.0pt), and overseas natural catastrophe losses fell sharply to ¥9.7B (prior year ¥71.1B). Investment income expanded substantially to ¥9319B (+¥5,234億, +128.0%), with interest income rising to ¥2980B (+¥141億) and dividend income to ¥4006B (+¥340億) in a rising interest rate environment. Other investment gains also increased to ¥628.9B (+¥509.1億), with favorable fair value movements and equity-method investment income of ¥36.4B (+¥6.2億). Meanwhile, insurance finance result deteriorated to a loss of ▲¥6708B (prior year ▲¥1743B) due to discount rate movements; however, due to the nature of IFRS 17 accounting, the discount rate movement differential in Other Comprehensive Income (OCI) improved by +¥9772B and is reflected in capital. Financial income was ¥2610B (+11.5%), with expanded investment income absorbing the negative insurance finance result. Impairment losses were ¥1.6B (prior year ¥88.5B), sharply reduced from the prior year, and ordinary income was ¥7035B (+53.5%). After corporate taxes of ¥1874B, profit attributable to owners of the parent was ¥5106B (+70.1%). In conclusion, simultaneous improvement in insurance service results and expansion of investment income drove substantial revenue and profit growth, and the elimination of one-off impairments and reduction in natural catastrophes contributed to improved profitability.
Reporting segments are five domestic insurance companies and overseas operations across six categories, with the core business being Overseas Operations (profit for the period ¥2344B, approximately 45.9% of total).
Mitsui Sumitomo Insurance posted profit for the period of ¥1829B (+68.5%, +¥744億) with operating revenue ¥1.89兆円 (+4.9%), loss ratio 65.6% (▲2.6pt) and expense ratio 27.9% (▲0.8pt), resulting in a combined ratio of 93.5% (▲3.4pt improvement) and markedly improved profitability. Financial income was ¥1463B (+66.8%) and expanded investment returns also contributed.
Aioi Nissay Dowa Insurance recorded profit for the period of ¥1189B (+75.9%, +¥513億) with operating revenue ¥1.38兆円 (+4.4%), loss ratio 65.4% (▲1.8pt) and expense ratio 28.4% (▲0.4pt), producing a combined ratio of 93.8% (▲2.2pt improvement). Financial income of ¥898B (+102.4%) drove substantial profit growth.
Mitsui Direct General Insurance posted a loss for the period of ▲¥2.2B (prior year ▲¥1.4B), widening its deficit, but insurance revenue grew to ¥40.5B (+11.9%), indicating continued growth.
Mitsui Sumitomo Aioi Life posted a loss for the period of ▲¥60.2B (prior year ¥22.2B), turning to a deficit. Insurance finance result was ▲¥78.7B and investment income was ▲¥88.1B, both negative contributors. New business annualized premiums were ¥23.2B (▲5.2%), and in-force annualized premiums were ¥418.6B (▲2.2%), showing a declining trend.
Mitsui Sumitomo Primary Life delivered profit for the period of ¥1273B (+149.7%, +¥763億), a large profit increase, with investment income of ¥6536B (+620.5%) benefiting from a rising rate environment, although insurance finance result was highly volatile at ▲¥5014B. In-force policy amount was ¥9.33兆円 (+14.7%), and premiums earned were ¥1.29兆円 (+9.9%), indicating a growth trend.
Overseas insurance subsidiaries (including affiliates) contributed profit for the period of ¥2344B (+32.2%, +¥567億), the largest profit source. Insurance revenue was ¥2.51兆円 (+17.5%), insurance service result was ¥1976B (+35.9%), and the combined ratio improved to 92.1% (▲1.0pt), demonstrating both profitability and growth.
Other (domestic insurers outside reporting segments, financial services, digital risk business, etc.) recorded profit for the period of ¥15.2B (+12.1%).
The primary drivers of profit increase were improvements in insurance service results at overseas operations and the two major domestic non-life insurers, and the expansion of investment income; Primary Life’s financial income also contributed. Conversely, Aioi Life turned to a loss due to adverse financial market conditions, widening profitability disparities among segments.
Profitability: ROE 8.7% (prior year 5.3%, +3.4pt), operating margin (Insurance Service Result / Insurance Revenue) 8.2% (prior year 5.5%, +2.7pt), net margin 8.0% (prior year 5.1%, +2.9pt). While historical trend data are not provided, structural improvement in profitability progressed year-on-year.
Cash Quality: Operating Cash Flow / Net Income 1.85x (healthy above 1.0x, strong cash backing), FCF ¥234.5B (Operating Cash Flow ¥954.0B − CapEx ¥30.8B). Accrual ratio ▲1.5% (Operating CF subtotal ¥358.1B − Net Income ¥516.1B) / Total Assets indicates high quality of earnings.
Investment Efficiency: CapEx / Depreciation 0.30x (consistent with a low-capex model of the insurance business). Equity-method investment balance ¥917.4B (prior year ¥224.9B, +308.0%) reflecting active strategic investments.
Financial Soundness: Equity Ratio 21.7% (prior year 20.1%, +1.6pt), liquidity ratio (cash ¥2.51兆円 / short-term debt estimate) is ample. D/E ratio 3.57x (liabilities ¥23.11兆円 / equity ¥6.48兆円) is high due to business characteristics but within tolerable range given the stability of insurance liabilities. Bonds and borrowings ¥1.04兆円 (prior year ¥0.62兆円, +66.6%) increased funding.
Operating Cash Flow: ¥954.0B (prior year ¥707.4B, +34.9%), 1.85x of net income ¥516.1B, indicating healthy cash generation. Operating CF subtotal ¥358.1B (Profit Before Tax ¥703.5B + Depreciation ¥103.4B − Impairment ¥1.6B adjustments etc.) was stably contributed by interest received ¥399.5B and dividends received ¥400.6B. Working capital changes included an increase in insurance contract liabilities of +¥1.0865兆円 (expansion of insurance service) and an increase in reinsurance contract assets of ▲¥393.6B (strengthened reinsurance utilization), forming an IFRS 17-specific cash flow circulation. Corporate tax payments were ¥188.4B.
Investing Cash Flow: ▲¥719.5B (prior year ▲¥555.9B), reflecting increased outflows. Purchases of investment securities were ▲¥14兆327億円, sale/redemption proceeds ¥13兆4,853億円, net increase ¥474.7B, adding to invested assets. Loan disbursements were ▲¥173.2B and loan repayments ¥283.9B, reducing loan balances. CapEx was ▲¥30.8B and intangible asset acquisitions ▲¥62.3B, totaling ▲¥93.1B, below depreciation ¥103.4B and maintaining a low-capex model. Equity-method investments have surged in balance but cash impact was limited (subsidiary acquisitions ▲¥1.9B); fair value and FX valuation effects were large.
Financing Cash Flow: ▲¥138.8B (prior year ▲¥680.4B), with reduced outflows. Bond issuance ¥457.8B, bond redemptions ▲¥50.0B for net +¥407.8B funding. Dividend payments were ¥224.9B (to parent ¥224.8B, non-controlling ¥0.3B), and share buybacks ▲¥221.5B, executing total shareholder returns of ¥446.4B. Payout Ratio 46.8% (dividends / profit attributable to owners of the parent), Total Return Ratio approximately 86.5%, indicating proactive shareholder returns.
FCF: ¥234.5B (Operating CF ¥954.0B − CapEx ¥30.8B) which largely covers dividends of ¥224.9B (FCF coverage 0.98x). Including total returns ¥446.4B, FCF was exceeded and supplemented by bond issuance and existing cash.
Cash Generation Assessment: Strong (Operating CF / Net Income 1.85x; FCF can self-fund dividends; total returns supplemented by market funding).
The difference between ordinary income ¥7035B and profit attributable to owners of the parent ¥5106B is mainly corporate taxes of ¥1874B (effective tax rate ~26.6%); one-off items are limited. Prior year impairment losses of ¥88.5B were reduced to ¥1.6B this year, and the removal of that one-off negative contributed to profit growth. Investment income ¥9319B breakdown: interest income ¥2980B and other investment gains ¥628.9B (fair value movements, equity-method income ¥36.4B etc.), with interest + dividend receipts of approximately ¥8000B including dividend income ¥4006B forming a stable earnings base. Other non-operating income equivalent was ¥84.7B (1.3% of revenue) and limited. Insurance finance result ▲¥6708B (prior year ▲¥1743B) is a large negative reflecting discount rate movements under IFRS 17, but OCI recorded discount rate movement differential of +¥9772B (insurance contracts +¥382.4B, reinsurance ▲¥12.9B, other valuation differences +¥572.4B etc.), which is reflected in equity. Accrual (Operating CF subtotal ¥358.1B − Net Income ¥516.1B) was ▲¥158.0B, giving an accrual ratio of ▲1.5% (of total assets ¥29.59兆円), low and indicating strong cash backing of earnings. Operating CF / Net Income 1.85x is healthy and quality of earnings is high. The gap between ordinary income and net income is tax-driven, and one-off special losses contracted sharply year-on-year, with recurring earnings (insurance service result and investment income) at the core of profit expansion.
The company plan is profit attributable to owners of the parent ¥425.0B (YoY ▲16.8%) and dividend ¥170 (increase ¥10). Actual FY2026 profit attributable to owners of the parent was ¥510.6B, exceeding plan by ¥85.6B (+20.2%), driven by better-than-expected insurance service result (large reduction in natural catastrophes, penetration of rate revisions, improved loss ratios), stronger investment income (higher interest and dividend income), and robust overseas performance (+32.2%).
Progress against the FY2027 full-year forecast as of the end of FY2026: insurance revenue ¥6.44兆円 / forecast ¥7.0兆円 ⇒ ~92% progress; profit attributable to owners of the parent ¥510.6B / forecast ¥425.0B ⇒ ~120% progress, already exceeding the plan. However, the company plan assumes a return of domestic natural catastrophes to normal levels (Mitsui Sumitomo Insurance ¥83.0B, Aioi Nissay Dowa ¥67.0B), and projects reduced profits for the two major domestic non-life insurers to ¥196.0B (▲35.1%). Conversely, overseas operations are expected to continue growing to ¥284.0B (+21.1%), and Mitsui Sumitomo Primary Life is forecast at ¥38.0B (▲70.1%) assuming market-dependent declines in financial income.
Using the standard progress benchmarks (Q2 = 50%, fiscal-year-end =100%), profit attributable to owners of the parent has already reached 120% of the full-year forecast at fiscal year-end, reflecting favorable assumptions (natural catastrophes, market conditions). Next fiscal year’s plan can be seen as conservative under normalizing assumptions. Dividend is planned at ¥170 vs actual ¥160, indicating further increase and continued shareholder returns. The company notes that market interest rates, FX and equity markets are assumed stable from March 2026 year-end, but actual performance may deviate materially due to various factors.
Dividends: interim ¥77.5, year-end ¥82.5, annual ¥160 (prior year ¥150, +¥10 increase). Total dividend amount was ¥224.8B (based on outstanding shares) against profit attributable to owners of the parent ¥510.6B, implying a payout ratio of approximately 44.0%; on a weighted average shares basis the payout ratio is about 46.8%, a sustainable level. Share buybacks executed amounted to ¥221.5B (CF recorded), and share cancellations during the period totaled ¥141.6B. Dividends ¥224.8B + buybacks ¥221.5B = total returns ¥446.4B, and total return ratio was approximately 87.4%, reflecting aggressive shareholder returns. FCF ¥234.5B can self-fund dividends (FCF coverage 0.98x), but total returns exceeded FCF and were supplemented by bond issuance ¥457.8B and existing cash. Equity moved from ¥5.38兆円 at the beginning of the period to year-end ¥6.42兆円 (+¥1.04兆円, +19.3%) after profit for the period ¥510.6B + OCI ¥977.2B − dividends ¥225.2B − share cancellations etc., achieving both capital strengthening and active returns.
For FY2027 the company plans dividends of ¥170 (＋¥10), raising the payout ratio to approximately 58.0% on the planned profit base ¥425.0B. Share buybacks are undecided, but given rising equity ratio and cash generation capacity, there is flexibility for agile returns. The dividend policy continues consecutive increases (no historical trend data provided) and the focus on total returns is expected to be maintained medium-term.
[Short-term]
[Long-term]
Profitability / Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| ROE | 8.7% | 3.8% (1.1%–16.8%) | +4.9pt |
| Net Margin | 8.0% | 4.3% (0.6%–11.3%) | +3.7pt |
The company’s ROE 8.7% and net margin 8.0% exceed industry medians by 4.9pt and 3.7pt respectively, achieving top-tier profitability within the insurance sector.
Growth / Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 8.2% | 2.1% (-4.5%–6.9%) | +6.1pt |
The company’s revenue growth +8.2% significantly outperforms the industry median +2.1%, driven by overseas expansion and domestic rate revision effects.
※ Source: Company compilation
Natural Catastrophe Risk: Risk that insurance service result deteriorates if domestic natural catastrophes revert to normal levels (company plan: Mitsui Sumitomo Insurance ¥83.0B, Aioi Nissay Dowa ¥67.0B) or if overseas natural catastrophes become frequent. This fiscal year domestic ¥25.3B and overseas ¥9.7B were low, but climate change increases frequency and severity as a structural risk. Reinsurance utilization (reinsurance contract assets ¥2.44兆円, +24.8%) strengthens risk transfer, but counterparty risk and rising reinsurance premiums remain issues.
Volatility of Insurance Finance Result: Under IFRS 17, insurance finance result was ▲¥6708B (prior year ▲¥1743B) and is highly sensitive to market rate fluctuations. Discount rate movements also impact OCI (+¥9772B), raising volatility on both capital and profit fronts. Improving ALM precision and hedging interest rate risk are important, but responsiveness to rapid rate changes is uncertain. Deferred tax liabilities ¥873.2B (+38.2%) also link to rate and fair value valuations, posing tax and capital efficiency volatility risk.
High Leverage / Liquidity Risk: D/E ratio 3.57x and high leverage are characteristic of the business; bonds and borrowings ¥1.04兆円 (+66.6%) increased debt funding. Insurance liabilities ¥18.60兆円 are stable, but funding cost increases and maturity concentration risk under market stress may materialize. Total returns ¥446.4B exceeded FCF ¥234.5B and were supplemented by bond issuance and cash, so if cash generation weakens next fiscal year, return capacity could be constrained.
Structural profitability improvement and broad-based profit growth: Operating margin (Insurance Service Result / Insurance Revenue) 8.2% (prior year 5.5%, +2.7pt), ROE 8.7% (prior year 5.3%, +3.4pt) show significant improvement. Overseas operations (+32.2%), Mitsui Sumitomo Insurance (+68.5%), Aioi Nissay Dowa (+75.9%) and Primary Life (+149.7%) achieved wide-based profit increases. Combined ratios for the two major domestic non-life insurers were 93.6% (▲3.0pt) and overseas 92.1% (▲1.0pt), underpinned by rate revisions and structural risk selection, suggesting a degree of sustainability. Operating CF / Net Income 1.85x and accrual ratio ▲1.5% indicate high quality of earnings and cash generation supporting profits.
Balancing aggressive total returns with capital strengthening: Dividend ¥160 (+¥10), share buybacks ¥221.5B produced a total return ratio ~87% and share cancellations ¥141.6B were executed. At the same time, comprehensive income ¥1.49兆円 (OCI improvement +¥9772B) increased equity ratio to 21.7% (prior year 20.1%), achieving both capital enhancement and returns. Dividend ¥170 is planned for FY2027 (+¥10), maintaining a consecutive dividend-increase stance. FCF can self-fund dividends but total returns exceeded FCF, so monitoring next year’s cash generation and return capacity is a key point.
Overseas growth trajectory and profitability disparity in domestic life: Overseas business is the largest earner at ¥2344B and is expected to continue growing to ¥2840B (+21.1%) in FY2027 plan. Domestic life shows profitability divergence: Primary Life delivered large profit increase (+149.7%) while Mitsui Sumitomo Aioi Life turned to a loss (▲¥60.2B). Primary Life is projected at ¥38.0B (▲70.1%) in the plan, reflecting market-dependent financial income, and segment volatility in profits is expected to continue. Local regulation, country risk and FX in overseas operations, and life portfolio restructuring are mid-term focal points.
This report is an automated earnings analysis document generated by AI integrating XBRL financial statement data and PDF earnings presentation materials. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the company based on publicly available financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.