Described below is the summary of Q&A session with institutional investors and securities analysts at the オンライン カジノ 新規17 1Q results conference call held on August 8, 2017.
- Q1E/I loss ratio for auto insurance at Tokio Marine & Nichido (“TMNF”) increased by 0.5 points YoY, and 1.1 point from オンライン カジノ 新規15. According to your explanation, this was due to an increase in net incurred losses relating to riders. Could you please share with us more details on that? Also, how much impact will the rate revision in auto in Jan. 2018 give to the whole premiums level?
- A1
Because the rider for attorney fee and other elements worsened the E/I ratio, we are planning a rate increase at the time of product revision in Jan. 2018. Regarding the rate revision, we will lower auto insurance rates by an average of 2.4% (non-fleet: -2.8%, fleet: unchanged). We consider that -3% reported in newspapers is for non-fleet. In both the top-line and bottom-line, the impact of rate revisions is projected to be little in オンライン カジノ 新規17, about half in オンライン カジノ 新規18 and 30% in オンライン カジノ 新規19.
- Q2It seems that large losses incurred in domestic non-life business and international insurance business. Has it increased than usual?
- A2
Regarding domestic non-life insurance business, we recorded a decrease in profits of 8 billion yen in total due to a large loss which was more than 3 billion yen and several medium size losses of about 1 billion yen per accident incurred in 1Q オンライン カジノ 新規17, which didn’t incur that much in 1Q オンライン カジノ 新規16. With regards to international insurance business, though it is difficult to define large losses because of the differences in size of businesses at each base, we recorded large losses in Philadelphia and Europe. We will closely watch the situations going forward in and outside Japan in full-year basis.
- Q3Regarding the product revision in Jan. 2018, I think there are 2 ways to improve the loss ratio of specific riders; increase premium rates, make severer payment conditions. Which are you planning to implement?
- A3
We are thinking of raising the premium rates of riders.
- Q4You have just explained the rate reduction of 2.4% in auto insurance, but is the rate increase of riders included in the degree?
- A4
Yes it is, but we don’オンライン カジノ 新規hink thaオンライン カジノ 新規he top-line will decrease by 2.4% as we will implement sales measures from now on.
- Q5What kind of large losses related to specialty insurance in domestic non-life insurance incur? Do those large losses require future premium increase?
- A5
We can’オンライン カジノ 新規ell you the details of the accident but it was a temporary claim and we think thaオンライン カジノ 新規here is no need to increase the premium rate as for now.
- Q6TMNF’s gains/losses on derivatives decreased by 1.2 billion yen. In case of stronger yen, isn’t it supposed to give a positive effect? Please tell me why it decreased.
- A6
As you understand, derivative contracts are for hedging purpose. Although the FX rate (USD/JPY) was almost flat, it was strong Euro and weak yen for EURO/JPY. These and other factors gave a negative effect to the gains/losses on derivatives as a whole. The yen was appreciating in 1Q オンライン カジノ 新規16, which was the reason of a large decrease YoY.
- Q7Regarding Tokio Marine & Nichido Life Insurance Co., Ltd., you projected a profit growth in オンライン カジノ 新規17 but the progress rate is about 10%. Can we consider the current progress to be on track compared to your full-year projection?
- A7
The net income of 1Q decreased because of an increase in provision for underwriting reserves due to last minute demand before the revision of the standard interest rate. We consider we are on track because this is a temporary factor which is factored into our projections.
- Q8Growth rates of net premiums written in fire and others in TMNF seems to be high compared to your full-year projection. Please tell me why.
- A8
Regarding fire, we are projecting a reversal effect of long period policies, etc. as a decrease factor in full-year. With regards to others, we do not plan to change the projection as for now because the impact of finalizing major contracts in 1Q オンライン カジノ 新規17 was big.
- Q9With regards to the international insurance, you projected a decrease in net premium written and business unit profits due to soft market but both have increased in 1Q オンライン カジノ 新規17. Does this mean that the effect of soft market was less than expected?
- A9
Excluding the effect of progress in the appreciation of the yen, natural catastrophe and foreign exchange gains, we projected an increase in net premium written and business unit profits. Although 1Q was still affected by the softening of the market, they increased due to the growth measures, etc. mainly in North America, South & Central America and Asia. We think we are on track compared to our projection.
- Q10Regarding international insurance, please tell me the impact of natural catastrophe from Jan. to June.
- A10
The amount of net incurred losses relating to natural catastrophes in this quarter (from Jan. to Mar.) was 5.7 billion yen and it is within the plan we set aオンライン カジノ 新規he beginning of this fiscal year. We are now aggregating the impact after Apr. but we do not have any information of large natural catastrophes.
- Q11Please tell me abouオンライン カジノ 新規he foreign investment restriction in Malaysia if you have anything to disclose.
- A11
We plan to handle this issue in accordance with the restriction of local authorities.
- Q12How is the impact of heavy rain or typhoon after July in Japan?
- A12
Typhoon No.3 and heavy rain in Kyusyu region has occurred since July but we think they do not have impacオンライン カジノ 新規hat affects the plan we set aオンライン カジノ 新規he beginning of this fiscal year.
- Q13Please tell me the reason of steady growth of the business unit profits in Asia.
- A13
Reserve takedown has contributed to the increase in business unit profits in Asia, which is growing faster than we planned.
- Q14Please tell me the reason why expense ratio of TMNF improved. Will this trend continue to the future?
- A14
The reason of the improvemenオンライン カジノ 新規his time is an increase in net premiums written. Company expense is almost flat and we project iオンライン カジノ 新規o be as planned in full-year too.
- Q15Do you project an additional rate cut for non-fleet contracts after the rate revision in auto insurance in Jan. 2018? And, because a decline in accident frequency associated with less transportation time, etc. by freight companies is expected, do you have some room for rate cut for fleet contracts, which you decided noオンライン カジノ 新規o change rates aオンライン カジノ 新規his revision?
- A15
We haven’t decided any rate revision after Jan. 2018 but we are implementing this rate revision based on our recent loss ratio trend. We will carefully consider next revision with future consumption tax increase and revision of law of obligation in sight. Regarding the rate of fleet contracts, we decided noオンライン カジノ 新規o change rates based on the actual result of loss ratio of non-fleet and fleet contracts, respectively. We will also decide the rate level taking the actual result into consideration in the future.
- Q16I thought the effect of last minute demand before the revision of the standard interest rate ended last fiscal year. Is provision for underwriting reserves booked this quarter? And I think new policies ANP at this quarter decreased due to the last minute demand at the end of last fiscal year, but will it recover to the same level as that of オンライン カジノ 新規16 from 2Q?
- A16
All of premiums were booked at オンライン カジノ 新規16 but some of the underwriting reserves are booked at this fiscal year. New policies ANP declined not only because of the effect of the last minute demand but also sales suspension of long-term saving type products.
- Q17In light of changing product mix and interest hike, is EV of new business also increasing YOY?
- A17
We cannot answer since we do not calculate EV in this quarter.
- Q18In case of sales of share of overseas subsidiaries, are gains of sales subtracted from adjusted net income?
- A18
Yes, they are.
These information materials are prepared based on the currently available information for us and described subjecオンライン カジノ 新規o our predictions and forecasts carried out aオンライン カジノ 新規he time of preparation.
It must be noted that what is described therein does not guarantee our future business performance and carries certain risk of misjudgment or uncertainty.
Accordingly, you are kindly requested to bear in mind thaオンライン カジノ 新規here may be a possibility of sizable divergence between the actual business performance in the future and that of our predictions or forecasts described therein.