Nippon Life, one of Japan's biggest life insurers, anticipates a decrease in insurance and service revenue for the full financial year ending 31 March 2025 (FY2024), says CreditSights, a credit research unit of the Fitch Group.
The decline will be primarily due to reductions in Nippon Life and Nippon Wealth Life, which is not surprising following a very strong growth in the prior year, adds CreditSights
However, the company expects an increase in core profit driven by higher interest and dividend income, and thus it targets a core profit of JPY900bn ($6bn) for FY2024.
Overall, CreditSights continues to view Nippon Life as a very strong credit, remaining a leader in the market in terms of presence and capital strength. While the slowdown in growth is noted, it is not overly concerning given the robust increase in core profit, which is a positive indicator of the company's fundamentals.
First half
In 1HFY2024, Nippon Life experienced a decline in consolidated premiums, amounting to JPY3,995.6bn, a 2.8% decrease year on year. CreditSights sees this downward trend driven predominantly by a reduction in sales through the bancassurance channel, which fell by 9.1% to JPY691.1bn. Additionally, group annuity premiums decreased by 10.8% to JPY504.7bn.
However, the consolidation of Nichii Holdings (the largest nursing care provider in Japan) added JPY76.1bn to Nippon Life's topline, providing some stability to overall revenue. Consequently, insurance and service revenue slightly decreased by 0.4% year on year to JPY4,221.6bn.