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2ND LD: 5 of 6 top nonlife insurers boost FY 2005 profit on fewer disasters.

TOKYO, May 24 Kyodo

(EDS: ADDING MORE DATA AT 3RD GRAF) Five of six major Japanese nonlife insurers boosted their net profits in fiscal 2005 as Japan remained relatively free of serious natural disasters, according to their parent-only earnings reports released Wednesday.

In the year through March 31, the six insurers -- Tokio Marine & Nichido Fire Insurance Co. under Millea Holdings Inc., Sompo Japan Insurance Inc., Mitsui Sumitomo Insurance Co., Aioi Insurance Co., Nipponkoa Insurance Co. and Nissay Dowa General Insurance Co. -- posted 295.2 billion yen in combined net profits, up from 250.3 billion yen a year before.

Insurance payouts by the six insurers totaled 76.3 billion yen in fiscal 2005, down sharply from a record 518.5 billion yen in insurance money in fiscal 2004 due to a number of typhoons and earthquakes that hit the Japanese archipelago.

Appraisal gains on their stockholdings and a pickup in sales of automobile insurance policies also contributed to pushing up their profits, the six insurers said.

Despite such a favorable environment, the growth of their net profits was relatively modest partly because the six insurers increased their contingency risk reserves that are set aside to meet huge disaster-linked payments.

Industry leader Tokio Marine & Nichido booked a net profit of 122.2 billion yen, up 26.1 percent from a year earlier, while Sompo Japan posted a record-high net profit of 67.9 billion yen, up 19.3 percent.

Mitsui Sumitomo registered a net profit of 64.8 billion yen, up 6.7 percent from a year earlier.

Aioi saw its net profit rise 22.4 percent to 19.8 billion yen and Nissay Dowa's net profit jumped 45.4 percent to 7.3 billion yen.

Of the six, only Nipponkoa saw its net profit fall, by 8.8 percent to 13.3 billion yen. The company attributed the drop to weaker-than-expected sales of automobile insurance policies.

Regarding net premium revenues, which correspond to sales at nonfinancial companies, the six insurers posted a combined 5.99 trillion yen, slightly higher than 5.93 trillion yen in fiscal 2004.

Looking ahead, four of the six project their profits to rise in the current business year through next March.

Mitsui Sumitomo, one of the four insurers, forecasts a net profit of 70 billion yen in the current business year.

On the other hand, Tokio Marine & Nichido and Sompo Japan expect their net profits to dip in fiscal 2006 from the previous year.

Tokio Marine & Nichido projects its net profit to fall 22.2 percent to 95 billion yen in fiscal 2006 and Sompo Japan forecasts an 8.6 percent fall in its net profit to 62.0 billion yen.
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Publication:Japan Weekly Monitor
Geographic Code:9JAPA
Date:May 30, 2006
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