MS&AD Insurance Group Holdings,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥461.70B
• EPS: ¥326.93

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

MS&AD Insurance Group Holdings (8725) reported FY2026 Q2 consolidated results under JGAAP with key profit figures disclosed and many top-line and cash flow items not reported in the XBRL. Operating income was ¥653.4bn, equal to ordinary income at ¥653.4bn, implying minimal non-operating noise in the quarter. Net income was ¥491.7bn, up 7.1% YoY, demonstrating resilience despite disclosure gaps in revenue and cash flow. EPS was ¥326.93. Income tax expense was ¥123.4bn, which implies an effective tax rate of roughly 20.1% based on net income plus taxes as a proxy for pre-tax profit. The balance sheet shows total assets of ¥27.28tn, total liabilities of ¥22.19tn, and total equity of ¥4.39tn, indicating an equity-to-asset ratio of about 16.1% (calculated) and a debt-to-equity ratio of 5.05x (liabilities/equity). Reported DuPont components using revenue are not meaningful because revenue was not disclosed (listed as zero); therefore, net margin and asset turnover cannot be derived from the provided data. Using ending equity, an approximate ROE is 11.2% (¥491.7bn / ¥4.39tn), though this may differ from a proper average-equity calculation. Return on assets approximates 1.8% (¥491.7bn / ¥27.28tn). Cash flow statements (OCF/ICF/FCF) and liquidity ratios were not disclosed; zeros in these fields represent non-disclosure rather than true zero values. Dividend information (DPS, payout, FCF coverage) was also not disclosed, preventing a formal dividend sustainability assessment this quarter. For an insurance group, performance is typically driven by underwriting results and investment income; the lack of premium, loss ratio, and investment yield data limits a deeper margin analysis, but the YoY net income growth and stable tax rate suggest earnings quality was not unduly reliant on transitory items. Capital structure appears stable for a large insurer with measured leverage and a substantial equity base. Overall, the quarter indicates solid profitability on the disclosed figures, but the absence of revenue, cash flow, and detailed underwriting metrics constrains the depth of analysis. We focus on solvency, earnings durability, and potential capital returns, noting that more detailed interim disclosures would improve visibility.

Profitability Analysis

ROE decomposition is constrained by the absence of revenue and average equity. Using proxies: approximate ROE ≈ 11.2% (net income ¥491.7bn / ending equity ¥4.39tn). Financial leverage (assets/equity) is about 6.22x (¥27.28tn/¥4.39tn), consistent with the provided 6.21. Net profit margin and asset turnover are not computable from the provided data because revenue is unreported (shown as 0). Return on assets is approximately 1.8%, which is reasonable for a diversified insurer balancing underwriting and investment returns. Operating income equals ordinary income (both ¥653.4bn), indicating limited non-operating distortions this period; this supports the quality of operating results on the reported line items. The implied effective tax rate is around 20.1% (¥123.4bn / (¥491.7bn + ¥123.4bn)), roughly in line with a normalized range for Japanese insurers. Margin quality cannot be assessed without net premiums earned, loss ratio, expense ratio, or combined ratio; thus, underwriting leverage and operating leverage within insurance operations are not derivable. Investment result contribution cannot be separated due to lack of interest/dividend/realized gains disclosure. Overall, profitability appears solid on the headline net income growth (+7.1% YoY) and scale of operating profit, but mix and sustainability by source are not assessable from the dataset.

Growth Assessment

Top-line growth cannot be assessed because revenue is not disclosed. Net income grew 7.1% YoY to ¥491.7bn, indicating positive earnings momentum. EPS of ¥326.93 suggests benefits from either earnings growth and/or potential share count stability (share data not disclosed). Without premium volume, new business, retention, or pricing data, sustainability of profit growth cannot be determined. The equality of operating and ordinary income suggests operating performance was the principal driver; however, we cannot decompose underwriting vs. investment contributions. Effective tax rate (~20.1%) appears stable, limiting tax-related distortions to growth. Given the large balance sheet (¥27.28tn assets) and equity base (¥4.39tn), scale advantages likely support medium-term earnings resilience, but this is an inference rather than a data-backed conclusion for the quarter. Outlook depends on underwriting discipline, catastrophe loss experience, and financial market conditions; none are detailed here. We would look for continuation of YoY net income growth alongside disclosure of combined ratio and investment yield to validate sustainability. In the absence of revenue and cash flow data, growth quality cannot be fully vetted.

Financial Health

Assets: ¥27.28tn; Liabilities: ¥22.19tn; Equity: ¥4.39tn. Calculated equity ratio (equity/assets) is ~16.1% despite the reported 0.0% figure, which reflects non-disclosure formatting rather than true zero. Debt-to-equity is 5.05x (liabilities/equity), appropriate for an insurer with significant policyholder-related liabilities. Financial leverage (assets/equity) is ~6.22x. Liquidity metrics (current and quick ratios) are not meaningful for insurers and were not disclosed; cash and equivalents also not disclosed. Regulatory solvency metrics (e.g., solvency margin ratio/ESR) are not provided, limiting solvency assessment. Balance sheet scale and equity level indicate a solid capital base, but without asset-liability duration, credit quality, and catastrophe reserve details, we cannot assess sensitivity to market or underwriting shocks. No information on hybrid capital or sub debt costs was disclosed.

Cash Flow Quality

Operating, investing, and financing cash flows were not disclosed this period; zeros indicate non-reporting. As a result, OCF/Net Income, FCF, and working capital dynamics cannot be evaluated. Earnings quality must be inferred indirectly: net income (¥491.7bn) and taxes (¥123.4bn) imply a normalizing tax burden (~20.1%), and operating income equals ordinary income, suggesting limited non-operating noise. However, for insurers, cash generation depends on underwriting cash flows, claims payments, and investment income realization; none were provided. Without realized/unrealized gains detail or reserve movements, we cannot assess the persistence of earnings or the degree of mark-to-market contributions. We therefore classify cash flow visibility as low for this quarter.

Dividend Sustainability

Dividend per share, payout ratio, and FCF coverage were not disclosed in the dataset; zeros do not represent actual values. With EPS at ¥326.93 for the period, capacity for dividends appears supported by earnings, but without cash flow data and explicit policy guidance, we cannot evaluate coverage. Lack of share count and treasury shares disclosure prevents precise payout aggregation. Absent FCF and solvency metrics, we cannot gauge buffer capacity under stress. We therefore cannot assess dividend sustainability this quarter beyond noting that profitability (¥491.7bn net income) provides potential capacity, contingent on cash generation, capital requirements, and regulatory solvency considerations.

Risk Assessment

Business Risks:

• Catastrophe losses (typhoons, earthquakes) driving claims volatility
• Pricing adequacy and competitive dynamics in domestic P&C lines
• Claims inflation and supply-chain driven repair cost increases
• Regulatory changes affecting reserving, capital, and product design
• Investment market volatility impacting investment income and capital
• Demographic trends and commercial exposure shifts in Japan
• Global reinsurance market capacity and cost

Financial Risks:

• Asset-liability duration mismatch amid interest rate volatility
• Credit spread widening on fixed income and alternative assets
• Equity market drawdowns affecting AFS securities and capital
• FX exposure from overseas operations and investment portfolios
• Catastrophe aggregation risk exceeding reinsurance protections
• Model risk in reserving and catastrophe risk assessment

Key Concerns:

• Lack of disclosure for revenue, cash flows, and key underwriting metrics
• Dependence on investment returns cannot be assessed this quarter
• Limited visibility into regulatory solvency ratios and capital buffers

Investment Implications

Key Takeaways:

• Strong headline profitability: net income ¥491.7bn (+7.1% YoY)
• Operating and ordinary income aligned at ¥653.4bn, indicating clean operating performance
• Capital base sizeable: equity ¥4.39tn; calculated equity ratio ~16.1%
• Approximate ROE ~11.2% using ending equity; ROA ~1.8%
• Effective tax rate ~20.1%, suggesting limited tax-driven distortions
• Material data gaps in revenue, cash flows, and underwriting metrics constrain depth of analysis

Metrics to Watch:

• Combined ratio (loss and expense ratios) and catastrophe loss impact
• Net premiums written/earned growth and pricing actions
• Investment yield, realized/unrealized gains, and AFS valuation movements
• Regulatory solvency metrics (e.g., solvency margin ratio/ESR) and capital buffers
• Cash from operations and FCF to assess dividend capacity
• Reinsurance costs and coverage adequacy
• Shareholder return framework (dividends/buybacks) and payout ratio

Relative Positioning: Within Japan’s large non-life insurance groups, the company exhibits solid scale (¥27.3tn assets) and sturdy profitability on disclosed figures, with moderate leverage typical for the sector; however, relative assessment versus peers this quarter is limited by non-disclosure of underwriting and cash flow metrics.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis