Tokio Marine Holdings(TKOMY) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company projects an EPS growth of 8% for fiscal 2024, driven by a 6% increase in adjusted net income and a 2% contribution from share buybacks [14][40] - Current ROE stands at 19.1%, with a target to exceed 20% by fiscal 2026 [12][31] - Profit projections for fiscal 2024 have been revised upward by JPY 40 billion, leading to an increase in dividend per share (DPS) from JPY 159 to JPY 162 [30][59] Business Line Data and Key Metrics Changes - The Japan P&C business aims for a CAGR of over 10% in underwriting profit, offsetting increased natural catastrophe budgets with rate increases in auto and fire insurance [18][23] - The international business is targeting a CAGR of 7% or more, with strong underwriting performance in North America and Brazil [23][26] - Specialty P&C lines have achieved a CAGR of 23% in underwriting profits, indicating robust growth compared to peers [53] Market Data and Key Metrics Changes - The underwriting profit growth in Brazil is at a CAGR of 42%, making it the fastest-growing segment within the group [26] - The company anticipates a decline in total return to 4.8% per annum in fiscal 2024 due to conservative provisions on commercial real estate loans [27] Company Strategy and Development Direction - The company is undergoing a transformation to enhance governance and operational efficiency, aiming to eliminate non-insurance tactics and focus on intrinsic value [13][45] - The Re-New initiative is designed to improve loss ratios and expense ratios, with a projected impact of JPY 42 billion on profits [17][94] - A tender offer for ID&E Holdings is part of the strategy to enhance disaster resilience solutions, positioning the company uniquely in the market [19][58] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the need for structural reforms in response to past incidents, emphasizing a commitment to improving governance and operational practices [62] - The company is optimistic about achieving top-tier EPS growth and improving ROE, leveraging its unique position in the market [38][41] Other Important Information - The company plans to fully divest from business-related equities within six years, which is expected to significantly improve ROE [41][60] - The establishment of the Group Audit Committee aims to strengthen governance and oversight across subsidiaries [34][62] Q&A Session Summary Question: Impact of Re-New initiative on bottom line - The expected impact from the Re-New initiative is approximately JPY 42 billion, but the timeline for completion and realization of these benefits remains uncertain [94][97] Question: Progress on governance strengthening - The Group Audit Committee is actively discussing governance improvements, focusing on compliance and cultural changes within the organization [104][106]