Tokio Marine Holdings(TKOMY) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported strong earnings in Q1 2022, with net premium written increasing by 11.3% and life premium by 8.3%. Excluding foreign exchange factors, the increases were 7% and 3.5% respectively, indicating a stronger performance than projected for the fiscal year [4][3]. - The full-year adjusted net income projection remains at JPY 553 billion, reflecting strong overseas performance and the anticipation of the main natural catastrophe season [3][2]. Business Line Data and Key Metrics Changes - International insurance underwriting and investment performed well, exceeding projections by approximately JPY 8 billion, with underwriting profit contributing JPY 4 billion [5][8]. - Tokio Marine Nichido Life's progress against their annual plan is at 20%, which is lower than the five-year average for this time of year. Excluding transient effects, the business unit profit progress is at 40%, aligning with historical averages [9][11]. Market Data and Key Metrics Changes - The Taiwan insurance market faced significant challenges due to a surge in COVID-19 cases, leading to estimated losses of JPY 134.8 billion before tax for Newa Insurance, impacting Tokio Marine's bottom line by JPY 53.9 billion [14][15]. - Despite the challenges, the Taiwan P&C market is expected to grow over 6%, with Newa Insurance having established a strong market presence, ranking fourth in the market [16][17]. Company Strategy and Development Direction - The company plans to acquire a majority share of Newa Insurance to enhance its enterprise risk management and capitalize on the growth potential in the Taiwan market [17][18]. - The management aims to raise EPS and ROE while managing volatility through steady execution of business strategies [18]. Management's Comments on Operating Environment and Future Outlook - The management acknowledged the impact of COVID-19 and natural catastrophes but emphasized that the underlying trend remains favorable on a normalized basis [18]. - The company is closely monitoring the evolving COVID situation and its implications for the insurance market, particularly in Taiwan [15][18]. Other Important Information - The company has not revised its shareholder return and annual capital adjustment policy despite the challenges faced [3]. - The performance of major international subsidiaries showed an overachievement of JPY 22 billion compared to local plans, indicating strong momentum [8]. Q&A Session Summary Question: What is the impact of COVID-19 on the Taiwan market? - The management noted that the sudden policy change in Taiwan led to a dramatic increase in COVID-19 cases, significantly impacting the insurance market and resulting in substantial losses for Newa Insurance [14][15]. Question: How does the company compare to its peers in North America? - The company reported a year-on-year increase of 150% in underwriting profit compared to 110% for North American peers, indicating stronger performance [7].