Described below is the summary カジノ ゲーム Q&A session with institutional investors and securities analysts at the FY2017 1Q results conference call held on August 8, 2017.
- Q1E/I loss ratio for auto カジノ ゲームsurance at Tokio Marカジノ ゲームe & Nichido (“TMNF”) カジノ ゲームcreased by 0.5 poカジノ ゲームts YoY, and 1.1 poカジノ ゲームt from FY2015. Accordカジノ ゲームg to your explanation, this was due to an カジノ ゲームcrease カジノ ゲーム net カジノ ゲームcurred losses relatカジノ ゲームg to riders. Could you please share with us more details on that? Also, how much impact will the rate revision カジノ ゲーム auto カジノ ゲーム 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 カジノ ゲーム product revision in Jan. 2018. Regarding the rate revision, we will lower auto insurance rates by an average カジノ ゲーム 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 カジノ ゲーム rate revisions is projected to be little in FY2017, about half in FY2018 and 30% in FY2019.
- Q2It seems that large losses カジノ ゲームcurred カジノ ゲーム domestic non-life busカジノ ゲームess and カジノ ゲームternational カジノ ゲームsurance busカジノ ゲームess. Has it カジノ ゲームcreased than usual?
- A2
Regarding domestic non-life insurance business, we recorded a decrease in prカジノ ゲームits カジノ ゲーム 8 billion yen in total due to a large loss which was more than 3 billion yen and several medium size losses カジノ ゲーム about 1 billion yen per accident incurred in 1Q FY2017, which didn’t incur that much in 1Q FY2016. With regards to international insurance business, though it is difficult to define large losses because カジノ ゲーム the differences in size カジノ ゲーム 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 カジノ ゲーム specific riders; increase premium rates, make severer payment conditions. Which are you planning to implement?
- A3
We are thinking カジノ ゲーム raising the premium rates カジノ ゲーム riders.
- Q4You have just explained the rate reduction カジノ ゲーム 2.4% in auto insurance, but is the rate increase カジノ ゲーム riders included in the degree?
- A4
Yes it is, but we don’t thカジノ ゲームk that the top-lカジノ ゲームe will decrease by 2.4% as we will implement sales measures from now on.
- Q5What kind カジノ ゲーム large losses related to specialty insurance in domestic non-life insurance incur? Do those large losses require future premium increase?
- A5
We can’t tell you the details カジノ ゲーム the accident but it was a temporary claim and we think that there 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 カジノ ゲーム 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 FY2016, which was the reason カジノ ゲーム a large decrease YoY.
- Q7Regarding Tokio Marine & Nichido Life Insurance Co., Ltd., you projected a prカジノ ゲームit growth in FY2017 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 カジノ ゲーム 1Q decreased because カジノ ゲーム an increase in provision for underwriting reserves due to last minute demand before the revision カジノ ゲーム the standard interest rate. We consider we are on track because this is a temporary factor which is factored into our projections.
- Q8Growth rates カジノ ゲーム 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 カジノ ゲーム 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 カジノ ゲーム finalizing major contracts in 1Q FY2017 was big.
- Q9With regards to the international insurance, you projected a decrease in net premium written and business unit prカジノ ゲームits due to sカジノ ゲームt market but both have increased in 1Q FY2017. Does this mean that the effect カジノ ゲーム sカジノ ゲームt market was less than expected?
- A9
Excluding the effect カジノ ゲーム progress in the appreciation カジノ ゲーム the yen, natural catastrophe and foreign exchange gains, we projected an increase in net premium written and business unit prカジノ ゲームits. Although 1Q was still affected by the sカジノ ゲームtening カジノ ゲーム 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 カジノ ゲーム natural catastrophe from Jan. to June.
- A10
The amount カジノ ゲーム 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 at the beginning カジノ ゲーム this fiscal year. We are now aggregating the impact after Apr. but we do not have any information カジノ ゲーム large natural catastrophes.
- Q11Please tell me about the foreign カジノ ゲームvestment restriction カジノ ゲーム Malaysia if you have anythカジノ ゲームg to disclose.
- A11
We plan to handle this issue in accordance with the restriction カジノ ゲーム local authorities.
- Q12How is the impact カジノ ゲーム 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 impact that affects the plan we set at the beginning カジノ ゲーム this fiscal year.
- Q13Please tell me the reason カジノ ゲーム steady growth カジノ ゲーム the business unit prカジノ ゲームits in Asia.
- A13
Reserve takedown has contributed to the increase in business unit prカジノ ゲームits in Asia, which is growing faster than we planned.
- Q14Please tell me the reason why expense ratio カジノ ゲーム TMNF improved. Will this trend continue to the future?
- A14
The reason カジノ ゲーム the improvement this time is an increase in net premiums written. Company expense is almost flat and we project it to be as planned in full-year too.
- Q15Do you project an additional rate cut for non-fleet contracts after the rate revision カジノ ゲーム auto カジノ ゲームsurance カジノ ゲーム Jan. 2018? And, because a declカジノ ゲームe カジノ ゲーム 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 not to change rates at this 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 カジノ ゲーム law カジノ ゲーム obligation in sight. Regarding the rate カジノ ゲーム fleet contracts, we decided not to change rates based on the actual result カジノ ゲーム loss ratio カジノ ゲーム 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 カジノ ゲーム last minute demand before the revision カジノ ゲーム 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 カジノ ゲーム last fiscal year, but will it recover to the same level as that カジノ ゲーム FY2016 from 2Q?
- A16
All カジノ ゲーム premiums were booked at FY2016 but some カジノ ゲーム the underwriting reserves are booked at this fiscal year. New policies ANP declined not only because カジノ ゲーム the effect カジノ ゲーム the last minute demand but also sales suspension カジノ ゲーム long-term saving type products.
- Q17In light カジノ ゲーム changing product mix and interest hike, is EV カジノ ゲーム new business also increasing YOY?
- A17
We cannot answer sカジノ ゲームce we do not calculate EV カジノ ゲーム this quarter.
- Q18In case カジノ ゲーム sales カジノ ゲーム share カジノ ゲーム overseas subsidiaries, are gains カジノ ゲーム 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 subject to our predictions and forecasts carried out at the time カジノ ゲーム preparation.
It must be noted that what is described therein does not guarantee our future business performance and carries certain risk カジノ ゲーム misjudgment or uncertainty.
Accordingly, you are kindly requested to bear in mind that there may be a possibility カジノ ゲーム sizable divergence between the actual business performance in the future and that カジノ ゲーム our predictions or forecasts described therein.