Core profits surged for the top four life insurance companies in the April-September period as the weaker yen boosted interest returns from foreign bonds, according to results released this week.
Core profit — the total of premium revenue and returns on invested premiums, minus insurance payouts and operating expenses such as wages — soared 80.6 percent from a year earlier to ¥213.2 billion at Sumitomo Life Insurance Co. and 26.6 percent to ¥220.1 billion at Meiji Yasuda Life Insurance Co.
Nippon Life Insurance Co., the nation’s biggest life insurer, saw its core profit rise 7.0 percent to ¥293.0 billion, while that of Dai-ichi Life Insurance Co., the only listed company among the big four life insurers, climbed 28.1 percent to ¥179.9 billion.
Core profit is pretax profit and excludes capital gains or losses and extraordinary gains or charges.
Premium revenues rose 24.1 percent to ¥2.119 trillion at Dai-ichi and 4.9 percent to ¥1.917 trillion at Meiji Yasuda, while they fell 7.3 percent to ¥2.372 trillion at Nippon and 21.6 percent to ¥1.246 trillion at Sumitomo.
Many life insurers say they are considering cutting their holdings of Japanese government bonds in the latter half of this fiscal year ending next March, with the country’s long-term interest rates on a downtrend due in part to the Bank of Japan’s drastic monetary easing.
“We will invest in superlong-term government bonds in a less aggressive manner,” Hiroshi Shimizu, a managing executive officer at Nippon Life, said at a news conference, indicating the company will raise its investment in foreign debt.
In the six months through September, the yen slid against the dollar by 24.5 percent on year on an average basis and against the euro by 29.3 percent, according to data released by the Finance Ministry earlier this month.
During the same period, the income account, which reflects how much Japan earns from its foreign investments, logged a record surplus of ¥8.99 trillion, buoyed by higher dividends and profits from securities investments, the data showed.
A falling yen increases the value of overseas revenues in yen terms.