Qualitative Information Related to Consolidated Results of Operations
During the six months ended September 30, 2017, the global economy continued to gradually recover, led by a steady business rebound in the U.S. The Japanese economy remained on a moderate recovery path, supported by a rebound in personal consumption, amid ongoing improvement in employment conditions along with an upturn in exports and production.
Under these circumstances, the consolidated financial results of Sompo Holdings Group (“SOMPO HOLDINGS”) for the six months ended September 30, 2017 were as follows:
Ordinary income increased by 280.3 billion yen to 1,935.1 billion yen compared with the same period last year, the components of which were underwriting income of 1,752.4 billion yen, investment income of 112.4 billion yen and other ordinary income of 70.3 billion yen. Meanwhile, ordinary expenses increased by 346.6 billion yen to 1,931.4 billion yen compared with the same period last year, the components of which were underwriting expenses of 1,550.2 billion yen, investment expenses of 10.5 billion yen, operating, general and administrative expenses of 310.8 billion yen and other ordinary expenses of 59.7 billion yen.
As a result of the foregoing, Sompo Holdings, Inc. (the “Company”) reported ordinary profit, calculated as ordinary income minus ordinary expenses, of 3.7 billion yen, a decrease of 66.2 billion yen from the same period last year.
The Company posted net income attributable to shareholders of the parent, after extraordinary items, net of income taxes and deferred income taxes and others, of 1.9 billion yen, a decrease of 41.5 billion yen from the same period last year.
The main reason for the decrease in profits was an increase in net incurred loss by overseas consolidated subsidiaries due to natural disasters outside Japan, including Hurricanes in North America, etc.
Qualitative Information Related to Consolidated Financial Condition
Total assets as of September 30, 2017 amounted to 12,444.2 billion yen on a consolidated basis, an increase of 513.1 billion yen from March 31, 2017, due mainly to an increase in unrealized gains and losses on securities available for sale and the issuance of corporate bonds.
Qualitative Information Related to the Forecasts of Consolidated Financial Results
In light of its consolidated financial results in the six months ended September 30, 2017 and other factors, the Company has revised its forecasts of consolidated financial results for the fiscal year ending March 31, 2018, which were announced in its earnings report issued on May 19, 2017. For the fiscal year ending March 31, 2018, the Company is now forecasting consolidated ordinary profit of 189.0 billion yen and net income attributable to shareholders of the parent of 152.0 billion yen.
- Assumptions for net premiums written are based on the Company’s own projections based on extrapolation from past trends and other factors.
- The Company is forecasting 53.0 billion yen for net incurred loss (excluding household earthquake insurance) due to domestic natural disasters that occur during the fiscal year ending March 31, 2018, taking into account results during the six months ended September 30, 2017 and earlier, among other factors.
- The Company assumes no major change in market interest rates, exchange rates and stock prices from their levels at September 30, 2017.
The Company’s consolidated forecasts were prepared based on information available as of the date of this report and the assumptions above. Accordingly, actual results may differ materially from projections depending on various factors.