| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | - | - | - |
| Operating Income / Operating Profit | - | - | - |
| Profit Before Tax | ¥7507.0 B | ¥5963.3 B | +25.9% |
| Net Income | ¥5721.9 B | ¥4314.9 B | +32.6% |
| ROE | 7.1% | 6.1% | - |
For the fiscal year ended March 2026, Net Income attributable to owners of the parent was ¥5,313 B (YoY +¥809 B +17.9%), and Profit Before Tax was ¥7,507 B (YoY +¥1,544 B +25.9%). Insurance revenue was ¥7,6936億円 (+4.0%), insurance service profit expanded to ¥11,497 B (YoY +¥1,869 B +19.4%), with improvements in underwriting profitability driving the overall profit increase. Investment profit was ¥6,666 B (YoY +¥1,034 B +18.4%), supported by sustained high interest income of ¥7,854 B. Insurance financial costs deteriorated to ¥▲6,812 B (prior year ¥▲5,987 B), but improvements in insurance service profit and investment profit absorbed this impact. SG&A increased significantly to ¥7,239 B (YoY +¥1,773 B +32.4%), reflecting front-loaded costs associated with overseas business expansion. As a result, expansion of underwriting margins and resilience in investment income more than offset higher expenses and worsening insurance financial costs, delivering net income growth.
[Revenue] Insurance revenue was ¥7,6936億円 (YoY +¥2,973 B +4.0%). By segment, Overseas Insurance Business contributed the most at 4兆4,483B円 (+4.7%), Domestic P&C Insurance Business was ¥3兆407億円 (+3.6%) and Domestic Life Insurance Business slightly declined to ¥2,654 B (▲0.5%). Overseas insurance benefited from rate improvements, primarily in specialty lines, underwriting expansion and a weaker yen. Domestic P&C benefitted from rate normalization in auto and fire insurance and growth in new product lines. Domestic life insurance was affected by declines in existing contracts. Insurance service expenses were ¥6,1144億円 (▲0.5%), broadly flat; reinsurance results worsened to ¥▲4,295 B (prior year ¥▲3,675 B), but insurance service profit expanded to ¥11,497 B (+19.4%), improving margins on insurance revenue to approximately 14.9% (prior year approximately 13.0%).
[Profit & Loss] Investment profit was ¥6,666 B (+18.4%), aided by sustained interest income of ¥7,854 B (▲2.6%) and improvement in other investment results (¥▲598 B vs. prior year ¥▲1,862 B). Insurance financial costs (net) worsened to ¥▲6,812 B (prior year ¥▲5,987 B), reflecting discount rate volatility. Combined financial results (investment profit plus insurance financial results) narrowed to ¥252 B (prior year ¥308 B). SG&A rose materially to ¥7,239 B (+32.4%), driven by system investments and personnel costs related to overseas expansion. Other financial costs were ¥▲286 B (▲8.6%), other income was ¥3,795 B (+80.2%), and other expenses were ¥▲596 B (+59.2%), with a notable increase in other income. Share of profit/loss of equity-method affiliates was ¥83 B (+10.2%). Profit Before Tax was ¥7,507 B (+25.9%), income taxes were ¥▲1,785 B (+8.3%) resulting in an effective tax rate of approximately 23.8%, and Net Income attributable to owners of the parent was ¥5,313 B (+17.9%). Non-controlling interests turned positive to ¥409 B (prior year ¥▲189 B), reflecting M&A consolidation effects. In conclusion, large improvements in insurance service profit and stable investment profit offset higher SG&A and worsening insurance financial costs, delivering revenue and profit growth.
Domestic P&C Insurance Business recorded Profit Before Tax of ¥3,252 B (prior year ¥1,701 B, +91.1%) and Segment Profit of ¥2,375 B (prior year ¥1,336 B, +77.9%). Against insurance revenue of ¥3兆407億円 (+3.6%), insurance service profit expanded to ¥2,575 B (+64.2%), improving underwriting margin to approximately 8.5% (prior year approximately 5.4%). Investment profit increased materially to ¥1,246 B (prior year ¥367 B), supported by stable interest income and equity valuation gains. SG&A increased only modestly to ¥▲182 B, indicating improved cost efficiency. Domestic Life Insurance Business widened losses with Profit Before Tax loss of ¥▲2,821 B (prior year ¥▲1,072 B) and Segment Loss of ¥▲2,049 B (prior year ¥▲810 B). Insurance revenue was ¥2,654 B (▲0.5%), and insurance service profit was ¥1,086 B (+5.2%), but sharp deterioration in investment profit to ¥▲2,376 B (prior year ¥▲1,180 B) and insurance financial results ¥▲1,520 B (prior year ¥▲911 B) weighed on results. Investment environment volatility pressured earnings. Overseas Insurance Business was the largest contributor with Profit Before Tax of ¥6,863 B (prior year ¥5,089 B, +34.9%) and Segment Profit of ¥5,028 B (prior year ¥3,906 B, +28.7%). Insurance revenue was 4兆4,483B円 (+4.7%), insurance service profit was ¥7,836 B (+11.8%), and underwriting margin remained high at approximately 17.6% (prior year approximately 18.3%). Investment profit was ¥7,792 B (+21.1%), SG&A was ¥▲4,798 B (+6.7%) with good cost control; rate improvements in specialty lines and FX effects boosted profits. Solutions & Other Business posted Profit Before Tax of ¥205 B (prior year ¥178 B, +14.9%) and Segment Profit of ¥145 B (prior year ¥118 B, +22.6%), with consulting and investment advisory expansion contributing.
[Profitability] ROE was 7.1% (prior year 6.2%), improving by 0.9pt, supported by higher net income attributable to owners of the parent and comprehensive income-driven equity expansion. Insurance service profit margin on insurance revenue expanded to approximately 14.9% (prior year approximately 13.0%), confirming underwriting improvements. The ratio of net income attributable to owners of the parent to insurance revenue rose to about 6.9% (prior year about 6.1%), indicating firm corporate-level profitability improvement. [Cash Quality] Operating Cash Flow (OCF) of ¥13,906 B is approximately 2.62x net income attributable to owners of the parent of ¥5,313 B, and the accrual ratio is approximately ▲2.6%, indicating very strong cash backing of earnings. Cash receipts within investment profit (interest and dividends received ¥8,046 B) account for a high proportion, suggesting limited dependence on valuation gains. [Investment Efficiency] EPS was ¥279.35 (prior year ¥231.41, +20.7%), BPS was ¥4,235.02 (prior year ¥3,684.66, +14.9%), indicating steady per-share value expansion. Payout Ratio was 74.3% (company disclosed), which is high but, given OCF and FCF generation (FCF approx ¥9,878 B), is assessed as sustainable. [Financial Soundness] Equity Ratio was 24.1% (prior year 23.2%), and shareholders’ equity attributable to owners of the parent expanded to ¥7,9556億円 (+12.3%). Interest-bearing debt (bonds & borrowings) was ¥5,980 B and stable; D/E ratio improved to approximately 3.10x (prior year approx 3.30x). Cash and cash equivalents were ¥2兆3,324億円 (+20.2%), ample, implying low short-term liquidity risk. Insurance contract liabilities increased to ¥20兆2,191億円 (+4.5%), but accumulation of reinsurance contract assets of ¥2兆4,435億円 (+45.2%) advanced risk diversification.
OCF was ¥13,906 B (prior year ¥2兆139億円, ▲31.0%), generating cash of 1.85x Profit Before Tax of ¥7,507 B. The YoY decline was primarily due to changes in reinsurance contract assets and liabilities of ¥▲7,471 B (prior year ¥▲5,802 B) and increased corporate income tax payments of ¥▲4,698 B (prior year ¥▲1,845 B). Changes in insurance contract liabilities and assets continued to contribute cash inflow of ¥+5,650 B (prior year +¥8,152 B), but expanded reinsurance usage and higher tax payments pressured cash flow. Investing Cash Flow was ¥▲4,027 B (prior year ¥▲1,807 B), with increased outflows mainly due to acquisitions of subsidiaries of ¥▲2,578 B (prior year ¥▲627 B), reflecting active M&A. Outlays for intangible asset acquisitions increased to ¥▲1,162 B (prior year ¥▲1,061 B), reflecting continued system and platform investments. FCF was ¥9,878 B (prior year ¥18,332 B), lower but still at a high level. Financing Cash Flow was ¥▲6,421 B (prior year ¥▲12,239 B), with dividend payments of ¥▲3,754 B (prior year ¥▲2,810 B) and share repurchases of ¥▲2,516 B (prior year ¥▲2,690 B) as main outflows, reflecting an active shareholder return stance. Debt proceeds of ¥1兆8,753億円 and repayments of ¥▲1兆8,479億円 largely offset each other, and net corporate bonds/repo decreased. Cash and cash equivalents increased to ¥2兆3,324億円 at period-end (period-begin ¥1兆9,398億円, +¥3,926億円), with FX translation gains of +¥469億円 also contributing. Overall, profit growth and accumulation of insurance liabilities supported OCF; increased tax burden and reinsurance costs partly offset this, but strong FCF generation and ample liquidity enabled both shareholder returns and growth investment.
The main components of Net Income attributable to owners of the parent of ¥5,313 B are insurance service profit of ¥11,497 B and investment profit of ¥6,666 B, demonstrating stable earnings generation from both underwriting and investment operations. Insurance financial costs (net) of ¥▲6,812 B reflect valuation losses associated with discount rate movements on insurance liabilities and are influenced by temporary market factors, partially offset by reinsurance financial income of ¥399 B. Other income of ¥3,795 B may include gains on business disposals, but its share of total is limited to about 7.5%, with recurring insurance and investment results forming the core of profits. OCF of ¥13,906 B is approximately 2.62x net income attributable to owners of the parent, and the accrual ratio of approximately ▲2.6% indicates very strong cash backing. Interest received ¥7,380 B and dividends received ¥665 B totaling ¥8,046 B represent cash inflows exceeding investment profit of ¥6,666 B, suggesting low dependence on valuation gains. The gap between Profit Before Tax ¥7,507 B and net income attributable to owners of the parent ¥5,313 B is largely explained by income taxes ¥1,785 B and non-controlling interests ¥409 B, indicating limited distortion from non-recurring items. Overall, the company generates cash stably from both insurance services and investments, and excluding temporary market valuation factors, earnings quality is high.
For the fiscal year ending March 2027, the company forecasts Net Income attributable to owners of the parent of ¥8,300 B (YoY +¥2,987 B +56.2%) and EPS of ¥441.83 (YoY +¥162.48 +58.1%), implying substantial profit growth. The progress rate relative to this fiscal year’s result of ¥5,313 B is 64.0%, assuming accumulation of nearly ¥3000 B of profit in the second half. Assumptions behind this optimistic forecast likely include further expansion of insurance service profit (maintained underwriting discipline and continued rate improvements), stable investment profit (sustained high interest income), restraint in SG&A growth, and narrowing of the domestic life insurance loss. The annual dividend forecast is ¥122.5 (this period actual ¥218), a large reduction, but this may be a provisional number at announcement and warrants confirmation with company materials (recommended). Achieving guidance depends on continuation of rate improvements in specialty lines of the overseas insurance business, maintenance of yen weakness, normalization of major natural catastrophe incidence, and continued underwriting improvement in domestic P&C. Downside risks include rising reinsurance costs, worsening insurance financial costs from interest rate movements, rapid yen appreciation, and occurrence of large-scale natural disasters.
Annual dividend was ¥218 (interim ¥105.5, year-end ¥112.5), a large increase of ¥137 from prior year ¥81. Payout Ratio was 74.3% (company disclosed) and high, but given OCF ¥13,906 B and FCF approx ¥9,878 B, it is assessed as sustainable. Total dividend payments were ¥3,754 B (prior year ¥2,810 B), approximately 70.7% of net income attributable to owners of the parent ¥5,313 B, broadly consistent with the payout ratio. Share repurchases totaled ¥2,516 B (prior year ¥2,690 B), and combined returns (dividends + buybacks) amounted to ¥6,270 B. Total Return Ratio was approximately 118% (vs. net income attributable to owners of the parent), exceeding net income and indicating an aggressive shareholder return policy. There were no share cancellations; treasury shares increased to ¥▲3,042 B (prior year ¥▲536 B). Coverage of total returns ¥6,270 B by FCF ¥9,878 B is approximately 1.58x, offering ample room, and combined with cash balances of ¥2兆3,324億円, sustainability of dividends and buybacks is high. The dividend forecast for March 2027 of ¥122.5 is materially below the current period actual ¥218, but may be provisional and should be confirmed with company disclosures (this report analyzes on the basis of the current period actual ¥218).
Concentration of profits in Overseas Insurance Business: Segment profit of ¥5,028 B (approximately 95% of total segment profit) is concentrated in the Overseas Insurance Business. Adverse developments such as loss of yen weakness, regulatory changes (tightening of reinsurance regulation), geopolitical risks (political instability in developed/emerging markets), or intensified competition (downward rate pressure in specialty markets) could significantly reduce group earnings. Overseas insurance revenue of 4兆4,483B円 (approximately 57.8% of total) and concentrated profit contribution indicate insufficient diversification.
Widening losses in Domestic Life Insurance Business and inefficient capital allocation: Segment loss of ¥▲2,049 B (prior year ¥▲810 B) widened, driven mainly by deterioration in investment profit to ¥▲2,376 B against insurance revenue of ¥2,654 B. The portfolio’s sensitivity to interest rates and equities is high, and market volatility could further broaden losses. Inefficient capital allocation to domestic life business is a structural risk that may depress group ROE. If early profitability measures (product review, changes to investment strategy) are not implemented, a reallocation of capital may be necessary.
Rapid SG&A increase and deterioration in cost efficiency: SG&A rose to ¥7,239 B (prior year ¥5,467 B, +32.4%), far outpacing insurance revenue growth of +4.0%, indicating marked cost inflation. System investments and personnel costs associated with overseas expansion are likely drivers, but if such growth persists, improvements in insurance service profit margin may be offset. Without a reversal in cost-efficiency trends, margin deterioration and reduced capacity for shareholder returns are concerns.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Return on Equity | 7.1% | 3.8% (1.1%–16.8%) | +3.3pt |
Our ROE of 7.1% exceeds the industry median of 3.8% by +3.3pt, indicating favorable profitability within the insurance sector.
※ Source: Company compilation
Structural improvement in underwriting margin and resilience in investment profit underpin earnings growth: Insurance service profit expanded to ¥11,497 B (YoY +19.4%), improving the margin on insurance revenue to approximately 14.9% (prior year approximately 13.0%). Rate improvements in specialty lines of the overseas insurance business, disciplined underwriting, and rate normalization in domestic P&C were effective. Investment profit was ¥6,666 B (+18.4%), supported by sustained interest income of ¥7,854 B and stable dividends received of ¥665 B. These twin improvements absorbed SG&A growth of +32.4% and deterioration in insurance financial costs, delivering Net Income attributable to owners of the parent of ¥5,313 B (+17.9%). Medium-term continuation of rate improvements and stability in the interest rate environment are assumptions, but historical trends indicate structural improvement in underwriting margins and rising structural earning power.
Strong cash generation and active shareholder returns enhance capital efficiency: With OCF of ¥13,906 B and FCF approx ¥9,878 B, the company delivered dividends of ¥3,754 B (payout ratio 74.3%) and buybacks of ¥2,516 B for total returns of ¥6,270 B (Total Return Ratio approx 118%). FCF coverage is about 1.58x and cash balances continued to build to ¥2兆3,324億円. Treasury shares increased to ¥▲3,042 B, highlighting a clear stance toward capital efficiency. ROE improved to 7.1% (prior year 6.2%), with EPS ¥279.35 (+20.7%) and BPS ¥4,235.02 (+14.9%) showing per-share value growth. The FY2027 EPS forecast of ¥441.83 (YoY +58.1%) is optimistic and contingent on continued underwriting improvement and shareholder return consistency.
Cost inflation and widening domestic life insurance losses pose medium-term pressure on profitability: SG&A of ¥7,239 B (+32.4%) outpaced insurance revenue growth of +4.0%, with cost front-loading due to overseas expansion pronounced. Domestic life insurance posted a segment loss of ¥▲2,049 B (prior year ¥▲810 B), driven by deterioration in investment profit of ¥▲2,376 B, revealing vulnerability to market movements. Without a reversal in cost-efficiency trends and effective measures to restore domestic life profitability, underwriting margin improvements may be offset, risking lower margins and reduced shareholder return capacity. D/E ratio of approximately 3.10x remains high, leaving leverage risk. Medium-term focus on cost control and domestic life turnaround is key to improving capital efficiency.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions are your own responsibility; consult a professional advisor as needed.