Comparative Financial Analysis of Japan’s Three Major Non-Life Insurers

This article compares the financial structures of three major non-life insurers—Tokio Marine Holdings (8766), MS&AD Insurance Group Holdings (8725), and SOMPO Holdings (8630)—using only XBRL data from their earnings releases publicly disclosed through TDnet. Stock-price metrics, segment-level earnings, and market data such as interest rates and foreign exchange rates are not included in the source data and are therefore outside the scope of this analysis.

1. Introduction: The Three Companies Are Moving Toward a “Two-Pillar” Structure

When the available data is arranged on a full-year basis, the transformation of the three insurers becomes clear. In addition to the expansion of their core business, measured by Net Premiums Written, profits generated from asset management—Net Investment Income—have rapidly become a major driver of Ordinary Income. By FY2025, Net Underwriting Profit and Net Investment Income had reached broadly comparable levels.

For FY2026—the latest full-year period in the data—the detailed income-statement tags for all three companies are shown as “-.” Only pretax income, net income, major balance-sheet items, cash flow, and shareholder returns are available. Because net assets and retained earnings both increased sharply at the same time, this appears to reflect changes in the disclosure framework associated with a change in accounting standards. Accordingly, this article adopts a two-stage approach: structural analysis is based on J-GAAP data for FY2022–FY2025, while the latest-period comparison is limited to pretax income, net income, the balance sheet, cash flow, and shareholder returns.

2. Industry-Wide Trend: Net Income Increased 1.85-Fold in Four Years

The following shows the combined trend for the three companies (amounts in ¥ billions).

※Combined total for Tokio Marine and MS&AD only; the relevant SOMPO item is shown as “-.” FY2024 cannot be aggregated because SOMPO data was not provided.

On a comparable two-company basis, Net Premiums Written increased from ¥7,496.8 billion in FY2022 to ¥9,979.4 billion in FY2025.

The 10% annual increase appears to reflect both changes in premium levels associated with domestic inflation and the expansion of overseas business on a consolidated basis. The available data does not allow these factors to be separated.

Net income fell temporarily to ¥629.0 billion in FY2023 before recovering sharply to ¥1,989.9 billion in FY2025, followed by ¥1,681.8 billion in FY2026.

Total assets increased from ¥66,067.4 billion to ¥81,198.4 billion, representing a CAGR of +5.3%. The most notable feature was the growth in net assets, which rose approximately 48% from ¥13,382.4 billion in FY2025 to ¥19,824.5 billion in FY2026. Retained earnings for the three companies combined also nearly doubled, from ¥8,581.8 billion to ¥16,285.7 billion. The scale of the increase cannot be explained by retained earnings alone and appears to have been affected by the reclassification of insurance liabilities and surplus associated with the change in accounting standards.

3. Ordinary Income Trend: A Sharp Recovery After the FY2023 Bottom

The FY2024-to-FY2025 increases were +73.3% for Tokio Marine and +123.1% for MS&AD. The rebound from the FY2023 declines—Tokio Marine -11.2%, MS&AD -40.8%, and SOMPO -61.2%—was exceptionally large. SOMPO’s Ordinary Income tag is unavailable from FY2024 onward, making a five-year CAGR impossible to calculate.

Pretax income is the only income-statement metric that allows a consistent three-way comparison including FY2026.

In FY2025, Tokio Marine’s pretax income was 4.4 times SOMPO’s. In FY2026, the three companies converged in the ¥700–840 billion range, with SOMPO becoming the largest. Because SOMPO adopted the new basis from FY2025, while Tokio Marine and MS&AD appear to have changed bases from FY2026, the reversal is more naturally interpreted as reflecting differences in the timing of the transition than a change in underlying business performance. FY2026 Effective Tax Rates were broadly similar: 23.8% for Tokio Marine, 26.6% for MS&AD, and 23.8% for SOMPO.

4. Earnings Structure: Asset Management Accounts for More Than Half of Profit

The following compares the two pillars for the latest periods with detailed data available—FY2025 for Tokio Marine and MS&AD, and FY2023 for SOMPO (amounts in ¥ billions).

※Net Investment Income ratio = Net Investment Income ÷ (Net Underwriting Profit + Net Investment Income).

For both Tokio Marine and MS&AD, more than half of profit came from investment activities in FY2025. Tokio Marine’s Net Investment Income ratio rose from 44.7% in FY2022 to 53.0%. MS&AD’s ratio declined from an unusually investment-heavy 69.8% in FY2022 to 53.4%, due to the recovery in underwriting profitability.

The improvement in underwriting profitability is particularly clear when measured as Net Underwriting Profit relative to Net Premiums Written. Tokio Marine improved from 20.7% in FY2022 to 21.7% in FY2023 and 24.2% in FY2025. MS&AD improved from 9.0% to 10.6% and then 17.6%. MS&AD’s 8.6-percentage-point improvement was the largest among the three, although Tokio Marine continues to lead in absolute profitability. SOMPO’s ratio declined from 17.3% in FY2022 to 13.4% in FY2023, after which the trend cannot be tracked.

5. Breakdown of Underwriting Expenses: Loss Ratios Stable in the Low 50% Range

※Simplified loss ratio = Net Claims Paid ÷ Net Premiums Written. Commissions ratio = Commissions & Collection Expenses ÷ Net Premiums Written. Both definitions differ from the loss ratios and expense ratios disclosed by the companies. A disclosed-basis combined ratio cannot be calculated reliably from the available data.

From FY2022 to FY2023 and FY2025, Tokio Marine’s simplified loss ratio was 50.3%, 51.3%, and 52.1%, respectively. MS&AD’s was 53.9%, 57.0%, and 53.2%, while SOMPO’s was 49.3% and 53.1% for FY2022 and FY2023. After MS&AD and SOMPO deteriorated by three to four percentage points in FY2023, MS&AD recovered to 53.2% in FY2025, consistent with the rebound in Ordinary Income. The commissions ratio was broadly similar across all three companies, at around 19%, indicating no major difference in agency commission levels.

A notable difference appears in the provision for Outstanding Claims Reserves. MS&AD increased from ¥12.54 billion in FY2023 to ¥31.33 billion in FY2025, or approximately 2.5 times. Tokio Marine, by contrast, declined from ¥29.78 billion to ¥19.69 billion. The provision for Policy Reserves, etc. is shown as “-” for both companies in FY2025, making analysis of the relationship between provisions and reversals difficult. Sales & Administrative Expenses as a percentage of Net Premiums Written were 26.4% for Tokio Marine and 18.1% for MS&AD. This substantial difference may reflect differences in consolidated scope, including the cost structures of overseas subsidiaries.

6. Investment Analysis: Growth in Interest and Dividends Income and the Risk of a Peak in Securities Gains

From FY2022 to FY2025, Interest & Dividends Income increased from ¥56.00 billion to ¥100.03 billion for Tokio Marine, a CAGR of +21.3%, and from ¥30.26 billion to ¥49.51 billion for MS&AD, a CAGR of +17.8%. Both the accumulation of investment assets and changes in the yield environment may have contributed, but the available data does not permit factor decomposition.

More notable is the sharp increase in dependence on net gains from securities sales. For MS&AD, 54.1% of Net Investment Income came from net gains on sales of securities. Its ¥50.97 billion in net gains represented approximately 55% of Ordinary Income of ¥92.89 billion. Tokio Marine’s dependence was also significant at 37.9%, double the 18.0% recorded in FY2023. This likely reflects progress in capital-efficiency initiatives such as the reduction of cross-shareholdings. If so, these gains should be viewed as structurally non-recurring profits. Tokio Marine also recorded ¥29.51 billion in losses on sales of securities, suggesting that the sales included portfolio repositioning.

7. Balance-Sheet Analysis: Differences in Liability Structures Become Apparent

The composition of investment assets differs meaningfully. Tokio Marine held ¥314.03 billion in loans and ¥305.19 billion in monetary claims bought, allocating approximately 19.8% of total assets to income-generating assets other than securities. Its money trusts were almost zero. MS&AD, by contrast, utilized ¥266.33 billion in money trusts, equivalent to 10.1% of total assets, while its loans were relatively small at ¥90.98 billion. Even among non-life insurers, investment practices differ substantially.

On the liability side, the weight of Outstanding Claims Reserves is strikingly different. Outstanding Claims Reserves relative to Net Premiums Written were 102.0% for Tokio Marine and 70.6% for MS&AD. Tokio Marine may have a higher proportion of lines with longer settlement periods, such as overseas liability insurance. From FY2022 to FY2025, Outstanding Claims Reserves increased 49.9% for Tokio Marine, from ¥360.96 billion to ¥541.15 billion, and 33.8% for MS&AD, from ¥246.76 billion to ¥330.11 billion. Both business expansion and higher claim amounts appear to have contributed.

Tokio Marine’s Unrealized Gains/Losses on Securities fell by half, from ¥183.56 billion to ¥95.46 billion and then ¥86.89 billion. MS&AD’s figure declined from ¥156.51 billion to ¥121.65 billion before recovering to ¥139.24 billion. The realization of unrealized gains through sales appears simultaneously as a decline in unrealized gains and an increase in net gains on sales, consistent with the analysis in Section 6. Tokio Marine’s Foreign Currency Translation Adjustment expanded more than tenfold, from ¥11.03 billion to ¥118.68 billion, underscoring the scale of its overseas assets.

8. Cash Flow and Shareholder Returns: FY2026 Total Shareholder Returns Exceeded ¥1.4 Trillion

Comparison for FY2026 (amounts in ¥ billions).

Combined Operating CF for the three companies was ¥305.09 billion, while Total Shareholder Returns (cash) amounted to ¥144.26 billion. Although net income may have been reduced by the accounting-standard changes, shareholder returns were maintained or increased. As a result, Tokio Marine’s Total Shareholder Returns (cash) / net income exceeded 100%, at 118.0%. Because payout ratios based on net income are sensitive to changes in accounting standards, the ratio of returns to Operating CF provides a more stable comparison: 45.1% for Tokio Marine, 46.8% for MS&AD, and 52.3% for SOMPO.

Cumulative Operating CF for FY2022–FY2026 was ¥591.73 billion for Tokio Marine and ¥259.43 billion for MS&AD. Tokio Marine generated more than ¥100 billion every year on a stable basis, while MS&AD increased gradually from ¥23.67 billion in FY2022 to ¥95.40 billion in FY2026. The gap in cash-generation capacity is narrowing.

9. Per-Share Metrics and Dividend Policy: Stock-Split Adjustments Are Essential

All three companies carried out one-for-three stock splits—Tokio Marine in FY2023, MS&AD in FY2024, and SOMPO in FY2025. Per-share metrics before the splits cannot be compared directly with post-split figures. Split-adjusted values are shown below.

On an adjusted basis, MS&AD’s EPS rose from ¥158.17 to ¥99.93 in FY2023, then to ¥231.83 in FY2024 and ¥445.52 in FY2025—an approximately 4.5-fold increase from the FY2023 bottom. SOMPO also recovered sharply, from ¥90.21 on an adjusted basis in FY2023 to ¥250.90 in FY2025 and ¥701.03 in FY2026. MS&AD’s reported FY2024 dividend of ¥270.00 may have been stated on a pre-split basis depending on the timing of the split. If so, the adjusted amount would be equivalent to ¥90.00. The apparent sharp dividend cut compared with ¥145.00 in FY2025 is therefore likely a split-related distortion; in substance, the dividend increased.

All three companies increased their dividends from FY2025 to FY2026: Tokio Marine by 26.7%, MS&AD by 10.3%, and SOMPO by 13.6%. Dividend payout ratios, however, were affected by the change in EPS accounting basis. The gap between Tokio Marine’s 78.0% and SOMPO’s 21.4% is more likely to reflect differences in transition timing than a fundamental difference in shareholder-return policies. The difference between basic EPS and Diluted EPS was within ¥0.20 for all three companies, indicating that dilution from potential shares was immaterial.

10. Earnings Forecasts and First-Quarter Progress

Tokio Marine, at 31.8%, and SOMPO, at 37.0%, both made solid starts, exceeding the 25% quarterly run rate. MS&AD stood out with a progress rate of 77.3%, recording nearly 80% of its full-year forecast in Q1. Quarterly earnings at non-life insurers are significantly affected by the timing of natural disasters and securities sales. The available data cannot determine whether this high progress reflects temporary factors at the beginning of the fiscal year or conservative full-year guidance. Because all detailed quarterly tags are shown as “-,” further factor analysis is impossible.

At the end of Q1, net assets had increased for all three companies: Tokio Marine to ¥832.31 billion, up 3.4% from the FY2026 year-end; MS&AD to ¥673.04 billion, up 3.8%; and SOMPO to ¥542.23 billion, up 2.5%. Net asset ratios—net assets divided by total assets—were 24.7% for Tokio Marine, 22.3% for MS&AD, and 28.7% for SOMPO. Because these definitions and accounting bases differ from the J-GAAP-era Capital Adequacy Ratio of approximately 13–15% in FY2022, the series cannot be linked directly over time.

11. Points to Watch Going Forward

Overseas business and Goodwill: Tokio Marine’s intangible assets increased from ¥115.81 billion in FY2025 to ¥157.98 billion in FY2026, while Goodwill declined from ¥45.34 billion in FY2022 to ¥31.84 billion in FY2025. This may reflect an interplay between ongoing amortization and new acquisitions or foreign-currency translation. Tokio Marine’s Foreign Currency Translation Adjustment reached ¥118.68 billion in FY2025, compared with only ¥5.48 billion for SOMPO in FY2023, suggesting a substantial difference in overseas exposure and the resulting impact on capital volatility. MS&AD’s Investing CF of -¥71.95 billion in FY2026 was the largest among the three, potentially indicating continued investment in assets and businesses.

Accounting-standard transition: SOMPO appears to have changed its disclosure framework from FY2025, while Tokio Marine and MS&AD appear to have done so from FY2026. Comparisons of earnings across different accounting bases are likely to remain difficult for at least one or two years. In practice, readers may find it more useful to focus on items relatively less affected by accounting changes—such as Operating CF, Net Premiums Written, and Outstanding Claims Reserves—rather than metrics such as net income and payout ratios. Economic-value-based solvency measures are not included in the source data and are therefore not discussed here.

Natural-catastrophe risk: Net Claims Paid increased for Tokio Marine from ¥195.53 billion in FY2022 to ¥276.58 billion in FY2025, or 41.4%, and for MS&AD from ¥194.69 billion to ¥248.90 billion, or 27.8%. Both ordinary growth accompanying higher premiums and higher catastrophe costs may be included, but the available data does not permit the two factors to be separated. The Reserve for Price Fluctuations was ¥15.04 billion for Tokio Marine and ¥25.17 billion for MS&AD in FY2025. Relative to securities holdings of approximately ¥17–19 trillion, this provides only limited cushioning, meaning that changes in Unrealized Gains/Losses on Securities may continue to be a major driver of capital volatility.

12. Conclusion