Tokio Marine Holdings, Inc. · TSE:8766
Tokio Marine — FY2023 Earnings Presentation
56 slides from Tokio Marine's earnings presentation, May 20, 2024
Slide 1: FY2023 & 2024 Financial Performances and New Mid-Term Plan KPI Target
FY2023 & 2024 Financial Performances and New Mid-Term Plan KPI Target May 20, 2024
Slide 2: Table of Contents
Table of Contents Highlight FY2024 Full Year Forecast – Key Messages ・・・・・・ 3 – Group (Adjusted Net Income) ・・・・・・ 31 – Executive Summary ・・・・・・ 4 – Japan P&C (TMNF) ・・・・・・ 32 – Natural Catastrophes ・・・・・・ 12 – Japan Life (TMNL) ・・・・・・ 37 – International ・・・・・・ 39 FY2023 Results Reference – Group (A
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Slide 4: Key Messages
Key Messages Adjusted net income rose to JPY711.6bn in FY2023, up JPY21.6bn vs the full-year projections (released in Feb.) (+60% YoY) mainly due to less winter storm losses and increased capital gains from sale of business- related equities Strong Excluding one-off effect, normalized based adju
Slide 5: Executive Summary: Top-Line
Executive Summary: Top-Line TBU FY2023 showed steady performance mainly in International business (Premiums declined for Japan Life due to increased cancellations of corporate insurance) Solid growth expected for FY2024 driven by rate increases and underwriting expansion in P&C business Net Prem
Slide 6: Executive Summary: Adjusted Net Income FY2023 Results (Actual Basis)
Executive Summary: Adjusted Net Income FY2023 Results (Actual Basis) [Group Results (Adjusted net income)] JPY711.6bn (+JPY21.6bn vs Feb. projections, +JPY267.5bn YoY) Exceeded Feb. projections due to less winter storm loss and increased capital gains from sale of business-related equities, etc.
Slide 7: Executive Summary: Adjusted Net Income FY2023 Results (Normalized basis)
Executive Summary: Adjusted Net Income FY2023 Results (Normalized basis) [Group Results (Adjusted net income)] JPY685.5bn (+JPY1.5bn vs Feb. projections, +JPY68.3bn YoY) In line with Feb. projections Increased YoY primarily led by strong performance by international businesses (billions of JPY)
Slide 8: Executive Summary: Adjusted Net Income FY2024 Projections
Executive Summary: Adjusted Net Income FY2024 Projections [Group Results (Adjusted Net Income)] JPY1tn (+JPY314.4bn YoY on normalized basis) FY2024 is projected at JPY1tn (+46% YoY) as a result of enhanced underlying capabilities and accelerated sale of business-related equities Growth excluding
Slide 9: Executive Summary: New MTP (2024-2026) KPI Target
Executive Summary: New MTP (2024-2026) KPI Target*1 Deliver EPS growth at +8% or more (3Y CAGR*2) for the new MTP (+16% or more including capital gains from sale of business-related equities). Our diversified U/W portfolio delivers stable growing U/W profits and our investment capability leverage
Slide 10: Executive Summary: Shareholder Returns
Executive Summary: Shareholder Returns DPS in FY2023 will be JPY123 (+23% YoY), an increase of +JPY2 from original projection based on the profit growth DPS for FY2024 is projected at JPY159 (+29% YoY) based on significant growth in source of dividends and continue realizing DPS growth consisten
Slide 11: Executive Summary: Strong Capital Stock and Disciplined Capital Policy (Share Buyback)
Executive Summary: Strong Capital Stock and Disciplined Capital Policy (Share Buyback) Strong ESR*1 as of March 31, 2024 at 140%. Current plan for FY2024 share buyback is JPY200.0bn throughout the year, comprehensively considering the current M&A pipeline, etc. (approx. +2% effect on EPS Growth. A
Slide 12: Reduction of Business-Related Equities
Reduction of Business-Related Equities Business-related equities outstanding will be “zero*1” in six years (JPY3.5tn in market value as of Mar. 31, 2024 and JPY0.4tn in book value) with a three-year reduction of 50% We will not merely reclassify them as pure investments (expected sale for FY2024 i
Slide 13: Natural Catastrophes
Group Japan Life Natural Catastrophes Japan P&C International Net incurred losses relating to Nat Cats in FY2023 decreased by -JPY8.2bn to JPY167.8bn compared to Feb. projections (pre-tax) Annual budgets in the new MTP to be increased by +JPY38.0bn across the Group incorporating the rise in seco
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Slide 15: FY2023 Results
FY2023 Results [Reference] FX Rate (USD / JPY) FY22 FY23 End of March JPY133.53 JPY151.41 (Japan P&C and Life) (-JPY11.14 from Mar. 31, 2022) (-JPY17.88 from Mar. 31, 2023) End of December JPY132.70 JPY141.83 (International) (-JPY17.68 from Dec. 31, 2021) (-JPY9.13 from Dec. 31, 2022) Copyright (c)
Slide 16: Group Results: FY2023 Adjusted Net Income (Actual)
Group Japan Life Group Results: FY2023 Adjusted Net Income (Actual) Japan P&C International Significant increase in adjusted net income on actual basis of +JPY267.5bn YoY due to the strong performance driven by International business, in addition to the impact of one-off effects such as drop of th
Slide 17: Group Results: FY2023 Adjusted Net Income (Normalized)
Group Japan Life Group Results: FY2023 Adjusted Net Income (Normalized*1) Japan P&C International Increase of JPY68.3bn primarily led by strong performance notably from international business Adjusted Net Income (billions of JPY) YoY Change +68.3 Japan P&C*2,3 Japan Life*2 International*2 Other*
Slide 18: Japan P&C 1: TMNF Results
Group Japan Life Japan P&C 1: TMNF Results Japan P&C International Business unit profits decreased by -JPY3.5bn vs Nov. projections to JPY101.4bn due to the rise in large losses and provision for foreign currency denominated loss reserves due to JPY depreciation, etc., despite decrease in Nat Cats
Slide 19: Japan P&C 2: TMNF Net Premiums Written
Group Japan Life Japan P&C 2: TMNF Net Premiums Written Japan P&C International Private insurance total was mostly in line with Nov. projections at JPY2,219.4bn Achieved +2.2% growth YoY with all lines exceeding FY2022 results (billions of JPY, except for %) FY2023 [Results compared to November
Slide 20: Japan P&C 3: TMNF Net Incurred Losses
Group Japan Life Japan P&C 3: TMNF Net Incurred Losses Japan P&C International Net incurred losses exceeded Nov. projections by +JPY27.6bn with the increase in provisions for foreign currency- denominated loss reserves due to JPY depreciation (c. +JPY4.0bn) and the impact of large losses, etc., of
Slide 21: Japan P&C 4: TMNF Combined Ratio
Group Japan Life Japan P&C 4: TMNF Combined Ratio Japan P&C International E/I loss ratio exceeded Nov. projections due to increase in net incurred losses. Expense ratio was below Nov. projections Expense ratio decreased YoY mainly driven by topline growth, but Combined ratio increased due to an
Slide 22: Japan P&C 5: TMNF Asset Management
Group Japan Life Japan P&C 5: TMNF Asset Management Japan P&C International Net investment income and capital gains exceeded Nov. projections (Billions of JPY) FY2023 [Results compared to November projections] FY2022 FY2023 Projection Results Results YoY (November Change profjection) Net investmen
Slide 23: Japan Life: TMNL Results
Group Japan Life Japan Life: TMNL Results Japan P&C International Annualized premium of New Business was below projections due to lower sales from intensified competition, etc. Business unit profits exceeded Nov. projections by +JPY6.1bn due to decrease in initial costs from lower-than-expected
Slide 24: International 1: Net Premiums Written
Group Japan Life International 1: Net Premiums Written Japan P&C International In line with Nov. projections due to the strong performance by all key entities Increased by +4.8% YoY thanks to growth action plans (rate increases and underwriting expansion, etc.) implemented by each entity (billio
Slide 25: International 1: Net Premiums Written
Group Japan Life International 1: Net Premiums Written Japan P&C International [FY2023 Results] - North America (see pages 27-29 for details on the three main companies) PHLY: Expansion primarily in new businesses despite the increase in reinsurance cost (in line with projection). Maintained strong
Slide 26: International 2: Business Unit Profits
Group Japan Life International 2: Business Unit Profits Japan P&C International In line with Feb. projections* Substantial YoY increase of +JPY218.3bn due to strong underwriting, investment income, reversal of the impact of COVID-19 in Taiwan (c. +JPY109.0bn), and JPY depreciation (c. +JPY17.9bn
Slide 27: International 2: Business Unit Profits
Group Japan Life International 2: Business Unit Profits Japan P&C International [FY2023 Results] - North America: Record profit at PHLY, DFG, TMHCC for the third consecutive year* (see pages 27-29 for details on the three main companies) *: PHLY achieved the fourth consecutive year record profit und
Slide 28: International 3: PHLY
Group Japan Life International 3: PHLY Japan P&C International ■ Changes in Major P/L Items (billions of JPY, except for % and pt) FY2022 FY2023 Results Results YoY (Ref.) As of end As of end YoY % (Excluding FX rates Dec. 2022 Dec. 2023 Change % *2 FX effects ) （USD/JPY） JPY 132.7 JPY 141.8 Net pre
Slide 29: International 4: DFG
Group Japan Life International 4: DFG Japan P&C International ■ Changes in Major P/L Items (billions of JPY, except for % and pt) FY2022 FY2023 Results Results YoY (Ref.) As of end As of end YoY % (Excluding FX rates Dec. 2022 Dec. 2023 Change % *2 FX effects ) （USD/JPY） JPY 132.7 JPY 141.8 Net prem
Slide 30: International 5: TMHCC
Group Japan Life International 5︓TMHCC Japan P&C International ■ Changes in Major P/L Items (billions of JPY, except for % and pt) FY2022 FY2023 Results Results YoY (Ref.) As of end As of end YoY % (Excluding FX rates Dec. 2022 Dec. 2023 Change % *2 FX effects ) （USD/JPY） JPY 132.7 JPY 141.8 Net pre
Slide 31: FY2024 Projections
FY2024 Projections [Reference] Assumptions used for FY2024 Projections FX Rate Nikkei Stock Average USD / JPY JPY151.41 JPY40,369 (Mar. 31, 2024) (Mar. 31, 2024) Copyright (c) 2024 Tokio Marine Holdings, Inc. 30
Slide 32: Group: Adjusted Net Income Projection (YoY Change)
Group Japan Life Group: Adjusted Net Income Projection (YoY Change) Japan P&C International Adjusted net income projected to be JPY1tn (+46% YoY) thanks to the accelerated sale of business- related equities (plan to sell equities worth JPY600.0bn in FY2024) despite increase in group total Nat Cats
Slide 33: Japan P&C 1: TMNF Financial Projections
Group Japan Life Japan P&C 1: TMNF Financial Projections Japan P&C International Business unit profits are expected to increase by +JPY11.5bn YoY to JPY113.0bn mainly driven by reversal of provision for foreign currency denominated loss reserves, profitability improvement from rate and products re
Slide 34: Japan P&C 2: TMNF Net Premiums Written
Group Japan Life Japan P&C 2: TMNF Net Premiums Written Japan P&C International Projected to increase by 4.7% mainly driven by the impacts of rate and products revision in fire and auto, rate increases of policies with low profitability, and implementation of growth measures for specialty insuranc
Slide 35: Japan P&C 3: TMNF Net Incurred Losses
Group Japan Life Japan P&C 3: TMNF Net Incurred Losses Japan P&C International Projected to improve by -JPY5.5bn YoY mainly due to reversal of Hawaii wildfire (c. -JPY26.0bn), provision for foreign currency denominated loss reserves (-JPY37.4bn), and large losses, partly offset by a rise in Nat Ca
Slide 36: Japan P&C 4: Combined Ratio (TMNF)
Group Japan Life Japan P&C 4: Combined Ratio (TMNF) Japan P&C International E/I loss ratio is projected to improve by -2.7pt to 63.3%, and Expense ratio is expected to increase by +0.1pt to 31.9% Combined ratio is projected to improve by -2.6pt to 95.2% Combined ratio (private insurance E/I basi
Slide 37: Japan P&C 5: TMNF Asset Management
Group Japan Life Japan P&C 5: TMNF Asset Management Japan P&C International Thanks to an increase in sales of business-related equities, the net investment income and other is expected to increase by +JPY344.8bn to JPY664.1bn vs. the previous year (billions of JPY) FY2023 FY2024 YoY Results Projec
Slide 38: Japan Life: TMNL Projections
Group Japan Life Japan Life: TMNL Projections Japan P&C International Annualized premium of New Business is projected to increase mainly through expanded approaches to customers (a reform of customer contacts) Business unit profits are projected to increase mainly driven by accumulation of in-fo
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Slide 40: International 1: Net Premiums Written
Group Japan Life International 1: Net Premiums Written Japan P&C International The net premiums written increase by +4.5% through steady rate increases and business expansion while maintaining underwriting discipline (billions of JPY, except for %) FY2023 FY2024 *5 Results Projections YoY As of en
Slide 41: International 1: Net Premiums Written
Group Japan Life International 1: Net Premiums Written Japan P&C International [Major Factors of Change] - North America PHLY: Projected to increase mainly through rate increases while maintaining underwriting discipline DFG: Projected to increase mainly through rate increases and business expansion
Slide 42: International 2: Business Unit Profits
Group Japan Life International 2: Business Unit Profits Japan P&C International Profits are projected to increase by +4.1% due to the impact of JPY depreciation (c. +JPY29.0bn) and through the achievement of steady growth while maintaining C/R at a low level (of 92%) as a whole, despite a rebound
Slide 43: International 2: Business Unit Profits
Group Japan Life International 2: Business Unit Profits Japan P&C International [Major Factors of Change] - Major entities in North America (PHLY, DFG, and TMHCC) Despite the favorable prior year loss reserves development in 2023 (c. -JPY46.0bn), these entities projected to continue to expand income
Slide 44: Reference
Reference Copyright (c) 2024 Tokio Marine Holdings, Inc. 43
Slide 45: Business Unit Profit based P&L
Business Unit Profit based P&L Figures for each item are on a business unit profit basis and differ from financial accounting. Please refer to “Business Unit Profit based P&L” posted on our website for FY2022 results and YoY change. https://www.tokiomarinehd.com/en/ir/event/presentation/2023/ (Busin
Slide 46: Status of CRE Loans
Status of CRE Loans DFG has successfully increased returns of TM Group’s CRE Loan by demonstrating strong expertise in making selective investments Incurred -JPY47.0bn*1 of capital loss including -JPY34.0bn*1 of CECL in FY2023, following a detailed review of individual accounts, with no signific
Slide 47: ESR and its sensitivity
ESR and its sensitivity ESR as of Mar. 31, 2024 stood at 140% (or 135% after share buyback), mainly reflecting profit contributions in 2H, stock price increases, shareholder return and execution of growth strategies ESR*1 ESR Sensitivity (based on parallel shift) March. 31, 2024 140% 140% *2 142%
Slide 48: Review of Indicators for Introduction of IFRS / ICS
Review of Indicators for Introduction of IFRS / ICS IFRS / ICS to be introduced at the end of FY2025 Considering the impact of the introduction and comparability with peers (who revised various KPI indicators upon introduction of IFRS 9 and 17), review of various indicators and definitions is pl
Slide 49: Definition of KPIs (1)
Definition of KPIs (1) Adjusted Net Income (Group total) Business Unit Profits Enhancing transparency and comparability / Creating long-term corporate value Linking with shareholder return For the Group total, “Adjusted Net Income” For each business domain, “Business Unit based on financial acco
Slide 50: Definition of KPIs (2)
Definition of KPIs (2) Definition of Adjusted Net Income / Adjusted Net Assets / Adjusted ROE Adjusted Provision for Provision for Provision for price Provision for Nat Cats Provision for Net Net Income underwriting + underwriting result for = + catastrophe loss + contingency + fluctuation + Income*
Slide 51: Reconciliation of Adjusted Net Income: FY2023 Results and FY2024 Projections
Reconciliation of Adjusted Net Income: FY2023 Results and FY2024 Projections (billions of JPY) • Reconciliation*1 Note: Factors positive to profit are shown with a plus sign FY2022 FY2023 YoY FY2024 YoY Results Results Change Projections Change Net income attributable to owners of the parent *5 376.
Slide 52: Adjusted Net Assets / ROE (FY2023 Results and FY2024 Projections)
Adjusted Net Assets / ROE (FY2023 Results and FY2024 Projections) （billions of JPY） Adjusted Net Assets*1 Adjusted ROE FY2023 FY2024 YoY FY2023 FY2024 YoY Results Projections Change Results Projections Change Net assets(consolidated) 5,176.6 5,365.0 188.3 Net income(consolidated) 695.8 870.0 174
Slide 53: Reconciliation of Business Unit Profits (FY2023 Results and FY2024 Projections)
Reconciliation of Business Unit Profits（FY2023 Results and FY2024 Projections） （billions of JPY） Japan P&C*1 （TMNF） Japan Life*1 FY2023 FY2024 FY2023 FY2024 YoY YoY Results Projections Results Projections Net income for accounting purposes 420.7 588.0 167.2 Net income for accounting purposes 39.
Slide 54: TMNL Supplement on MCEV
TMNL Supplement on MCEV Breakdown of increase in MCEV*1 (billions of JPY) +11.8 1,273.9 +91.2 Change in economic 1,199.3 -28.4 environment, etc. Shareholders’ Core MCEV dividends earnings*2 2022 2023 Year-end MCEV *3 1,199.3 1,273.9 MCEV earnings *4 103.0 *1： Figures are before review by an indepe
Slide 55: Impact of FX Rate Change on the Group's Financial Results
Impact of FX Rate Change on the Group’s Financial Results Estimated impact of the depreciation of JPY to USD by 1 yen*1 Impact on net income on financial accounting basis*2 Impact on adjusted net income*2 circa Increase in overseas subsidiaries profit: circa Increase in overseas subsidiaries p
Slide 56: Disclaimer
Disclaimer These presentation materials include business projections and forecasts relating to expected financial and operating results of Tokio Marine Holdings and certain of its affiliates in current and future periods. All such forward looking information is based on information and assumptions a