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Latent profits of Japan's top life insurers plunge 5.3 tril. yen.

TOKYO, Feb. 13 Kyodo

Unrealized profits on marketable securities owned by nine major Japanese life insurance companies plunged 5.37 trillion yen in the April to December period last year, according to the nine firms' results in the nine months released through Friday.

Mitsui Life Insurance Co. incurred a net loss of 106 billion yen largely because of losses on investment in foreign securities and securitized financial products.

Among other leading life insurers, Asahi Mutual Life Insurance Co. posted a net loss of 132.4 billion yen due partly to price falls in Japanese stocks.

As valuation losses on securities holdings by the nine totaled 1.85 trillion yen, eight of them tapped their fund reserves to avoid falling into the red as a result. For example, Nippon Life Insurance Co. and Dai-ichi Mutual Life Insurance Co. drew down as much as 470 billion and 613.1 billion yen, respectively.

Nevertheless, all nine companies maintained their solvency margin ratio -- a key indicator of an insurer's ability to pay policyholders -- above the 200 percent line, below which the government requires insurers to take prompt corrective steps.

The ratio topped 1,000 percent at Meiji Yasuda Life Insurance Co., Sony Life Insurance Co. and Fukoku Life Insurance Co.

Meanwhile, six leading nonlife insurance companies on Friday released their earnings reports for the April-December period, showing appraisal losses on marketable securities totaling 410 billion yen.

Premium revenues dropped at all six insurers as demand for automobile insurance weakened amid slumping vehicle sales.

Tokio Marine Holdings Inc. swung into the red on a pretax basis for the first time and posted a 96.5 percent year-on-year plunge in net profit to 4.6 billion yen.

Sompo Japan Insurance Inc. and Nissay Dowa General Insurance Co. registered bottom-line losses.
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Publication:Japan Weekly Monitor
Date:Feb 23, 2009
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