Six major nonlife insurers on Wednesday posted pretax losses for the business year to March as the global economic downturn caused securities revaluation losses.
Sompo Japan Insurance Inc., the nation’s second-largest nonlife insurer, incurred the largest group pretax loss — ¥144.05 billion — after losing ¥147.9 billion on financial guarantee insurance and losses on securities holdings. It booked a ¥94.06 billion profit the previous year.
Aioi Insurance Co. followed with a ¥23 billion pretax loss.
All six nonlife insurers took a hit on premium revenues as plunging car sales eroded sales of automobile insurance.
Three of them — Sompo Japan, Aioi and Nissay Dowa General Insurance — posted net losses, while the other three — Tokio Marine Holdings Inc., Mitsui Sumitomo Insurance Co. and Nippon Koa Insurance — managed to post net profits.
Sompo Japan recorded a group net loss of ¥66.71 billion after earning a profit of ¥59.64 billion the year before.
Sompo Japan’s operating revenues fell 6.7 percent to ¥1.77 trillion as slumping auto sales damaged premium revenues from auto insurance, and plunging housing starts took a bite out of its fire insurance business.
Sompo Japan left its fiscal 2008 dividend unchanged from the previous year at ¥20 per share.
For fiscal 2009 through next March, the company is projecting a group net profit of ¥32 billion on operating revenues of ¥1.80 trillion, up 1.7 percent from fiscal 2008.
Tokio Marine said its group net profit plunged 78.7 percent to ¥23.14 billion in fiscal 2008, mainly because premium revenues from life and nonlife operations were hit by flagging personal consumption amid the global slump.
In an earnings statement for the 12-month period ended March 31, the insurer posted a pretax loss of ¥15.13 billion on a 5.6 percent drop in operating revenues — which correspond to sales at nonfinancial firms — to ¥3.50 trillion.
The pretax loss compares with the previous year’s profit of ¥179.07 billion.
The insurer said it kept its net balance in the black by booking a one-off profit of ¥83.76 billion, including ¥65.54 billion from its legally mandated provisions, to brace for losses stemming from its securities trading and holdings.
The company said it will pay a full-year dividend of ¥48 per share in fiscal 2008, including a midterm payout of ¥24 already paid.
The full-year dividend, identical to the previous business year’s ¥48, will be the same as what it plans to pay for the entire business year ending next March 31.
The insurer said it expects net profit to jump 245.7 percent to ¥80 billion this year.
Pretax balance is expected to return to the black at ¥125 billion despite a projected 5.2 percent fall in operating revenues to ¥3.32 trillion, Tokio Marine said.
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