After a reported 2.1% growth in consolidated gross premium returns for both Fukoku Life and its standalone subsidiary Fukokushinrai Life, from JPY580.9bn ($3.9bn) in 9M2024 to JPY592.8bn in 9M2024, CreditSights has revised its recommendation for the company from Market perform to Outperform.
As a standalone, Fukoku Life’s gross premium returns fell by 0.8%, from JPY372.2bn in 9M2024 to JPY369.3bn in 9M2024.
Growth
Consolidated annualised new premiums grew by 11.7% to JPY27.6bn in 9M2024, up from JPY24.7bn in 9M2023. As a standalone, Fukoku Life’s annualised new premiums increased by 11.8%, from JPY11bn in 9M2023 to JPY12.3bn in 9M2024. According to the report by CreditSights, the subsidiary’s Fukokushinrai Life’s bancassurance-driven single premium products also helped with growth.
Consolidated core profit rose 18% y-o-y as well, from JPY61.7bn in 9M2023 to JPY72.8bn in 9M2024, the report showed. The report also attributes this growth to Fukokushinrai Life. At the same time, the report stated that consolidated profit margin grew by 1.7%, from 10.6% in 9M2023 to 12.3% in 9M2024.
Net income after tax increased from JPY38.5bn in 9M2024 to JPY54.8bn in 9M2024, a rise of 42.5%.
The balance sheet
According to the report, as of December 2024, Fukoku Life’s solvency ratio was 1,165.9%, above the minimum requirement of 200%.
The company’s economic solvency ratio was also 249.3% as of December 2024. Although there was a 8.9% decrease from 258.2% in March 2024, the report noted that there is no need for concern, as it the ratios are above the minimum requirement of 100%.
The report said, “The company’s robust solvency margin ratio and high economic solvency ratio establish a solid financial buffer, which, combined with improved performance, provides comfort regarding its credit profile.
“However, we acknowledge that despite these strengths, the company’s size is smaller compared to peers, which may limit its financial flexibility. Additionally, its operations are concentrated in the mature and highly competitive Japanese market, lacking the geographical diversification seen in leading life insurers in Japan.”