Meiji Yasuda Life Insurance Co. plans to disclose itemized profit data in a first for a major, private-sector life insurer in Japan, possibly starting with its fiscal 2006 financial statement, to regain the trust of policyholders.
Life insurers have three main sources of profit: investment returns in excess of claims paid to policyholders, lower-than-expected expenses and lower-than-projected death rates, company officials said Thursday.
Major Japanese insurers have not traditionally given breakdowns of their profits, fearing that disclosing that information might put them at a competitive disadvantage.
Meiji Yasuda has had difficulty attracting new policyholders after the company was twice ordered by the Financial Services Agency last year to improve its business practices due to its failure to pay legitimate claims.
Meiji Yasuda hopes to win back credibility by making detailed profit data available to the public, the officials said.
Other major Japanese insurance firms said they have no plans to follow suit at this point, but analysts say Meiji Yasuda’s decision is likely to affect their strategies.
Insurers have suffered huge losses on the back of extremely low interest rates as their investment returns failed to keep pace with policyholders, known in the industry as negative spread. This has forced them to look for other sources of profit.