| Metric | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | - | - | - |
| Operating Income / Operating Profit | - | - | - |
| Ordinary Income | ¥13486.3B | ¥14600.1B | -7.6% |
| Net Income | ¥9875.0B | ¥10537.4B | -6.3% |
| ROE | 18.1% | 20.6% | - |
The fiscal year ended March 2026 recorded Ordinary Income of 1兆3,486B (¥前年比-1,114億円 -7.6%), and Net Income of ¥9875.0B (¥-662億円 -6.3%), marking a decline in profits. Ordinary revenue equivalent reached ¥8兆8,723億円 (¥+4,321億円 +5.1%), producing a revenue rise with profit decline. Profit before tax moved to 1兆3,350億円 (¥-1,149億円 -7.9%), and after an effective tax rate of 26.0% Net Income was realized. By segment, profit growth in Overseas Insurance (+14.5%) drove the group, while Domestic P&C Insurance saw a decline (-16.7%) due to underwriting profitability adjustments, causing mix changes that affected the profit structure.
【Revenue】
Ordinary revenue reached ¥8兆8,723億円 (YoY +5.1%), achieving revenue growth. Segment composition was Overseas Insurance ¥4兆5,951億円 (share 51.8%, YoY +6.7%), Domestic P&C Insurance ¥3兆7,729億円 (42.5%, -2.5%), Domestic Life Insurance ¥7,958億円 (9.0%, +24.5%), Solutions & Other ¥2,577億円 (2.9%, +214.5%). Overseas Insurance accounted for the majority and led revenue growth. Domestic P&C posted slight revenue decline due to natural catastrophe impacts and lagged rate revisions, while Domestic Life Insurance achieved significant revenue growth from expanded premium income, and Solutions & Other increased its contribution through business expansion. Underwriting revenue consists of net written premiums and related items, with notable premium expansion in growing overseas markets.
【Profitability】
Ordinary Income was 1兆3,486億円 (YoY -7.6%). Segment profits were Domestic P&C ¥7,445億円 (-16.7%), Overseas Insurance ¥5,591億円 (+14.5%), Domestic Life ¥236億円 (-66.4%), Solutions & Other ¥214億円 (+166.6%), with the Domestic P&C decline weighing on the consolidated result. Domestic P&C experienced elevated loss ratios due to frequent natural catastrophes and higher motor insurance loss ratios, and expense ratios remained high, worsening the combined ratio. Overseas Insurance secured profit growth through price adjustments and selective underwriting, progressing structural profitability improvements. Non-operating income included interest & dividend income ¥9,911億円 and securities sale gains ¥7,133億円, and trading income contributed ¥1,416億円. Conversely, net derivative losses ¥369億円, securities sale losses ¥4,718億円, and valuation losses ¥132億円 pressured earnings. Extraordinary items netted -¥137億円 (extraordinary gains ¥80億円, extraordinary losses ¥216億円), including negative goodwill ¥33億円 and impairment losses ¥41億円. Profit before tax was 1兆3,350億円 (-7.9%); after income taxes of ¥3,475億円 (effective tax rate 26.0%) and non-controlling interests attributable net income of ¥71億円, net income attributable to owners of the parent amounted to ¥8,300億円. In conclusion, the company posted higher revenue and lower profits, with deterioration in domestic underwriting profitability partially offset by overseas growth and investment income.
Domestic P&C Insurance reported Revenue ¥3兆7,729億円 (YoY -2.5%) and Segment Profit ¥7,445億円 (-16.7%, margin 19.7%), with frequent natural catastrophes and rising motor insurance loss ratios driving profit decline. Overseas Insurance reported Revenue ¥4兆5,951億円 (+6.7%) and Segment Profit ¥5,591億円 (+14.5%, margin 12.2%), achieving revenue and profit growth through premium expansion in overseas growth markets and penetration of pricing actions. Domestic Life Insurance posted Revenue ¥7,958億円 (+24.5%) and Segment Profit ¥236億円 (-66.4%, margin 3.0%), with premiums rising but profit margin falling substantially due to increased provisioning for policy reserves. Solutions & Other recorded Revenue ¥2,577億円 (+214.5%) and Segment Profit ¥214億円 (+166.6%, margin 8.3%), supported by expansion into new business areas. Corporate profit composition was Domestic P&C 55.2%, Overseas Insurance 41.4%, Domestic Life 1.7%, Solutions & Other 1.6%, and the rising overseas ratio contributed to an improved profit mix.
【Profitability】ROE was 18.1% (prior year 20.6%), down 2.5pt due to increased shareholders’ equity and lower Net Income, but remaining at a high level. ROA on an Ordinary Income basis was 4.3% (prior year 4.7%). Operating margin, calculated as Ordinary Income / Ordinary Revenue given insurance industry characteristics, was 15.2% (prior year 17.3%), reflecting a challenging underwriting environment. 【Cash Quality】Operating Cash Flow (OCF)/Net Income ratio was 0.59x (OCF ¥5,843億円 / Net Income ¥9,875億円), weak due to movements in insurance liabilities and tax payments totaling ¥4,835億円, which constrained cash generation. Free Cash Flow was ¥1兆2,240億円, ample to cover capex of ¥450億円, dividends ¥3,762億円, and share buybacks ¥2,516億円. 【Investment Efficiency】EPS was ¥441.83 (prior year ¥542.16, -18.5%), BPS ¥2,885.44 (prior year ¥2,640.27, +9.3%), with increases in shareholders’ equity contributing to higher book value per share. Equity-method investment income was ¥108億円, limited in scale. 【Financial Soundness】Equity Ratio was 17.1% (prior year 16.3%), improving by 1pt and strengthening the capital buffer. D/E ratio was 4.86x, high but reflective of structural leverage centered on insurance liabilities; interest coverage was 59.4x (Ordinary Income 1兆3,486億円 / interest expense ¥227億円), indicating very strong interest-bearing debt service capacity and sufficient resilience to interest costs.
OCF was ¥5,843億円 (YoY -56.6%), a significant decline. The main drivers were increased tax payments ¥4,835億円 (prior year ¥1,905億円) and a decrease in OCF subtotal to ¥1,268億円 (prior year ¥5,716億円), affected by timing of insurance liability movements and working capital changes. Interest and dividend receipts ¥9,537億円 (prior year ¥9,829億円) consistently supported cash flow. Investing cash flow was positive ¥6,397億円 (prior year ¥1,646億円) as securities sale proceeds significantly exceeded acquisition outlays, indicating asset replacement activity. Capital expenditures were ¥450億円 (prior year ¥261億円), restrained at 0.28x relative to depreciation ¥1,620億円. Free Cash Flow (OCF + Investing CF) was ¥1兆2,240億円, sufficiently covering financing CF outflow of ¥-6,243億円 (including dividends ¥3,762億円 and share buybacks ¥2,516億円). Cash and deposits at period-end were ¥2兆851億円 (YoY +¥6,153億円), indicating abundant liquidity and low short-term funding risk.
The composition of Ordinary Income 1兆3,486億円 reflects a mix of underwriting revenue and investment income, with non-operating income components such as interest & dividend income ¥9,911億円, securities sale gains ¥7,133億円, and trading income ¥1,416億円 representing a high external-income ratio characteristic of the insurance industry. Extraordinary items were minor net -¥137億円 (extraordinary gains ¥80億円, extraordinary losses ¥216億円), including negative goodwill ¥33億円 and impairment losses ¥41億円, indicating limited one-off distortion of Net Income. The gap between Ordinary Income and Net Income is explainable by tax expense ¥3,475億円 and non-controlling interest ¥71億円. The OCF/Net Income ratio of 0.59x is low, with mid-period insurance liability movements and concentrated tax payments weakening cash conversion. The accrual ratio (Net Income - OCF) / Total Assets was 1.3%, acceptable, while OCF/EBITDA (OCF ¥5,843億円 / estimated EBITDA ¥1兆5,106億円) was 0.39x, indicating weak cash backing and suggesting timing mismatches in capital recovery.
Full Year guidance is Net Income attributable to owners of the parent ¥8,300億円, EPS ¥441.83, and dividend ¥122.5, representing a progress rate of 118.9% against actual Net Income ¥9,875億円 (actuals exceeded guidance). Actual dividend was ¥218 (interim ¥105.5 + year-end ¥112.5), substantially above the guidance ¥122.5, indicating an in-period dividend increase. For the coming fiscal years, assumptions include penetration of rate revisions in Domestic P&C and continued overseas growth; normalization of natural catastrophe frequency and maintenance of underwriting discipline are key to earnings stability.
Dividends totaled ¥218 (interim ¥105.5, year-end ¥112.5) versus ¥81 in the prior year, a substantial increase. Payout Ratio was 31.7% (based on Net Income ¥9,875億円), within a sustainable range, and Total Return Ratio (dividends ¥3,762億円 + share buybacks ¥2,516億円) / Net Income was 63.6%, demonstrating an active shareholder return stance. Dividend coverage against Free Cash Flow ¥1兆2,240億円 is 3.3x; total return coverage is 1.95x, indicating returns were delivered without straining liquidity. Share buybacks of ¥2,516億円 were executed, contributing to a reduction in outstanding shares and supporting EPS. Dividend on equity (DOE) on a book-value basis was 6.5%, conservative, but combined with high ROE of 18.1% the company appears to pursue a balance of capital efficiency and returns.
Natural Catastrophe Risk: The primary cause of the Domestic P&C segment profit decline of -16.7% YoY was frequent natural catastrophes and rising motor insurance loss ratios. Upward pressure on loss ratios increased the combined ratio and compressed underwriting profitability. Continued abnormal weather patterns could sustain high loss ratios and elevated volatility.
Weak Cash Conversion: With OCF/Net Income at 0.59x and OCF/EBITDA at 0.39x, cash generation is weak, affected by mid-period insurance liability movements and concentrated tax payments. Although Free Cash Flow is large at ¥1兆2,240億円, reliance on investing CF sale proceeds introduces liquidity risk if market conditions deteriorate.
High Leverage Structure: D/E ratio of 4.86x reflects structurally high leverage centered on insurance liabilities; in a rising interest rate environment, unrealized losses on bond portfolios and valuation loss risks may materialize. While interest coverage of 59.4x shows strong interest-bearing debt resilience, continuous monitoring of ALM alignment and reinsurance counterparty risk is required.
No industry benchmark data available
Balancing Overseas Insurance Profit Growth and Domestic Profitability Improvement: Overseas Insurance drove profit with Segment Profit ¥5,591億円 (+14.5%), reaching 41.4% of group profit. Conversely, Domestic P&C profit was ¥7,445億円 (-16.7%), and rate revision penetration and normalization of loss ratios will be key to profit recovery. Continued selective growth overseas and strict domestic underwriting discipline will be structural supports for sustainable profit growth.
High Total Return and Capital Efficiency: Maintaining high efficiency with ROE 18.1%, the company implemented large increases in shareholder returns—dividend ¥218 (+168.5%) and share buybacks ¥2,516億円—resulting in Total Return Ratio 63.6% and an active shareholder return posture. Given Free Cash Flow generation ¥1兆2,240億円 and cash on hand ¥2兆851億円, return capacity appears well secured. Continued progressive dividends and flexible buybacks based on FCF are expected to balance capital efficiency and returns.
This report is an AI-generated earnings analysis based on XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmark data are aggregated by the company from publicly available financial statements for reference. Investment decisions are your own responsibility; consult professional advisors as needed.