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LEAD: 5 of 6 major nonlife insurers post profit gains in FY 2007 1st half.

TOKYO, Nov. 20 Kyodo


Five of six major Japanese nonlife insurers posted gains in their net profits in the first half of fiscal 2007 from a year earlier, as no major disasters hit Japan in the April-September period, according to their parent-only earnings reports released Tuesday.

In the fiscal first half, 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 168.35 billion yen in combined net profits, up from 96.02 billion yen a year earlier.

Of the six, only Mitsui Sumitomo saw its first half net profit decline by 17.1 percent, as its costs increased in a bid to regain consumer confidence after it was punished by the Financial Services Agency over its nonpayment of legitimate insurance claims.

Combined payouts by the six insurers for damage stemming from natural disasters, including outstanding payments for claims already made, totaled 26.8 billion yen in the reporting period, less than one-third of the 90.9 billion yen a year before.

Among the six, industry leader Millea Holdings suffered 1.4 billion yen in losses from its investment in subprime-related securities products in the six-month period.

Aioi logged an appraisal loss of 25.2 billion yen from its holding of asset-backed securities involving U.S. subprime loans to borrowers with poor credit history.

Net premium revenues, which correspond to sales at nonfinancial companies, grew at Tokio Marine & Nichido, Mitsui Sumitomo and Aioi, but dwindled at Sompo Japan, Nipponkoa and Nissay Dowa.

Nonlife insurers cited a negative impact on their fire and auto insurance product sales of plunges in Japan's housing starts following tightened construction regulations, and falls in recent sales of new vehicles in the country.

Tokio Marine & Nichido, the nation's largest nonlife insurer, saw its first half net profit nearly triple to 62.77 billion yen compared with 21.68 billion yen a year earlier.

Sompo Japan booked an 89.4 percent jump in its net profit to 43.27 billion yen and Aioi also had its net profit soar 95.7 percent to 17.75 billion yen.

Nipponkoa's net profit also nearly tripled to 11.90 billion yen in contrast to 4.03 billion yen a year before. Nissay Dowa saw a 3.2 percent rise in its net profit to 4.66 billion yen.

Five of the six insurers also posted growth in their parent-only pretax profit in the April-September period from a year earlier, with only Mitsui Sumitomo logging declines from the first half of fiscal 2006.

Tokio Marine & Nichido posted a pretax profit of 75.79 billion yen, up 64.23 percent, Sompo Japan registered 68.26 billion yen, up 39.2 percent, Aioi logged 20.60 billion yen, up 59.7 percent, Nipponkoa booked 21.68 billion yen, up 247.0 percent, and Nissay Dowa chalked up 6.93 billion yen, up 2.9 percent.

Mitsui Sumitomo's pretax profit fell 16.4 percent to 41.0 billion yen.

Looking ahead, all but Mitsui Sumitomo and Nipponkoa project growth in their parent-only net profit for the full fiscal year through March 31, 2008, from the previous year.
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Publication:Japan Weekly Monitor
Date:Nov 24, 2007
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