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Insurance industry

NKSJ Holding Inc. Reports Net Loss for 2010 Fiscal Year

Strategic Insights

— 1 min read

NKSJ Holding Inc., the holding company of Sompo Japan Insurance Inc. and Nipponkoa Insurance Co. Ltd., reported a net loss of 12.9 billion yen for the 2010 fiscal year ended March 31, 2011, due to the impact of the March 11 earthquake and a weaker investment market. Nonlife business conditions remain challenging, particularly in automobile insurance and earthquake-related claims. Despite this, NKSJ is projecting an ordinary profit of 42 billion yen and net income of 16 billion yen for the 2012 fiscal year.

Key Takeaways:

  • NKSJ reported a net loss of 12.9 billion yen for the 2010 fiscal year, primarily due to the March 11 earthquake and a weaker investment market.
  • Nonlife business conditions in Japan remain challenging, with worsening profitability in automobile insurance and earthquake-related claims.
  • Sompo Japan and Nipponkoa are expected to incur net claims related to natural disasters, including the March 11 earthquake, of about 123 billion yen and 72 billion yen, respectively.
  • Investment income of Sompo Japan and Nipponkoa dropped 27.7% and 4.2% to 69.1 billion yen and 43.2 billion yen, respectively.
  • NKSJ aims to "further improve its profit earning capacity" in domestic nonlife business, which is a profit driver for the group.
  • The insurer is also shifting management resources to promising areas such as domestic life and overseas insurance business.

Statistics:

  • Net loss of 12.9 billion yen for the 2010 fiscal year.
  • Ordinary profit of 42 billion yen and net income of 16 billion yen projected for the 2012 fiscal year.
  • Underwriting income of 2.48 trillion yen.
  • Total assets of 8.98 trillion yen as of March 2011.
  • Sompo Japan saw a 71.7% drop in net income to 12.1 billion yen in the 2010 fiscal year.
  • Nipponkoa posted a loss of 6.4 billion yen, compared with a net income of 13.1 billion yen a year earlier.
  • Investment income of Sompo Japan and Nipponkoa dropped 27.7% and 4.2% to 69.1 billion yen and 43.2 billion yen, respectively.

Sources:

  • A. M. Best Company, Inc. (via COMTEX)
  • BestWire (May 19, 2011) - Sompo Japan Insurance Inc. agreed to acquire an additional 40% stake in its Malaysian nonlife joint venture Berjaya Sompo Insurance Bhd.
  • BestWire (July 14, 2010) - Sompo Japan plans to establish a new reinsurance unit in Malaysia.
  • BestWire (April 28, 2011) - Sompo Japan received regulatory approval to set up a branch in Beijing.

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