Short- term losses off­set by in­creased earn­ings

The worst snow­fall in decades in cen­tral and north- east­ern Ja­pan, in Fe­bru­ary 2014, is un­likely to dam­age the earn­ings pro­file of rated non- life in­sur­ers, says Fitch Rat­ings. This is be­cause re­ported claims are ex­pected to be off­set by ris­ing earn­ings, leav­ing the over­all credit pro­file in­tact. Ac­cord­ing to the Nikkei news­pa­per, the re­ported dam­age from the record snow­fall is es­ti­mated at around 60 bil­lion Yen ($ 580 mil­lion) in claims at the three ma­jor non­life groups, Tokio Ma­rine Group, MS& AD In­sur­ance Group and NKSJ Group. It will take sev­eral months to tally a fi­nal claims fig­ure. In the nine months to De­cem­ber 2013, con­sol­i­dated recurring profit of the three non­life groups rose to JPY564 bil­lion, or as high as 92 per cent of their ag­gre­gated full- year es­ti­mate of JPY614 bil­lion. There­fore, on an an­nu­alised ba­sis, full- year profit tar­gets can still be met across the sec­tor, bar­ring any other ad­verse de­vel­op­ments. The up­swing in earn­ings is un­der­pinned by the auto in­sur­ance busi­ness which re­mains a main­stay of pre­mium in­come. Earn­ings are also sup­ported by the in­creas­ing con­tri­bu­tion from over­seas busi­ness, with ev­ery ma­jor in­sur­ance group reg­is­ter­ing dou­ble- digit in­creases in rev­enue from their over­seas sub­sidiaries.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.