Dai-ichi Life records almost 30% jump in net profit

Overseas businesses keep group afloat during times of ultralow interest rates in its home market

Dai-ichi Life records almost 30% jump in net profit

Insurance News

By Gabriel Olano

Japan-based financial group Dai-ichi Life Holdings saw its net profit rise by 29.6% in the 2016-2017 fiscal year ending March 31, fuelled by excellent performance in its overseas operations.

The insurer posted a bottom line of ¥231.2 billion (US$2.03 billion), marking a sixth consecutive year of record profits and exceeding the initial forecast of ¥197 billion. Dai-ichi’s overseas operations, including US insurer Protective Life, which was acquired in 2014, were major contributors to the growth.

Stockholding gains from the integration of its asset management business with Mizuho Financial Group also gave it a significant boost. As such, Dai-ichi Life foresees net profit dropping off by about 20% to ¥179 billion in the current fiscal year ending in March 2018.

While net profit was up, premium and other income fell, with Dai-ichi Life’s income sliding by around 20% to ¥4.40 trillion. This was because ultralow interest rates in the Japanese market forced insurers to scale back on the sale of single-premium policies. Two other Japanese insurers also experienced a similar trend, with T&D Holdings suffering a 4% drop to ¥1.5 trillion and Sony Life Insurance sliding 7% to ¥956.7 billion.

However, all three insurers experienced increased core earnings due to an improved market environment, which allowed them to reduce reserves for insurance payouts. Dai-ichi Life’s profit rose 3% to ¥558.4 billion, while T&D registered an increase of 5% to ¥159.9 billion. Meanwhile, Sony Life’s profit almost doubled to ¥83.8 billion.

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