Tokio Marine & Nichido Fire underwriting profits to improve amidst rate hikes

Fitch expects premium rate increases to continue driving better underwriting results.

Tokio Marine & Nichido Fire Insurance Co., Ltd.'s (TMNF) underwriting profitability will keep improving in medium-term, thanks to steady premium rate hikes, according to Fitch Ratings.

TMNF's combined ratio declined to 95% for April to September 2024, down from 103% a year earlier, as higher rates in property and motor insurance offset the impact of frequent natural catastrophes in Japan. 

Fitch expects premium rate increases to continue driving better underwriting results in the coming years. 

Tokio Marine Holdings, Inc. (TMHD), the parent company, is set to accelerate its divestiture of domestic equity holdings, aiming to sell $5.01b (¥750b) by the financial year ending March 2025 (FY 2025). 

This move is expected to further strengthen capital adequacy over the next five years.

TMHD plans to fully exit strategic domestic equity holdings by FY 2030, significantly reducing investment risk.

TMHD’s overseas business is expected to contribute more than half of total insurance premiums in FY 2025, with international profit—excluding gains from domestic equity divestitures—exceeding 60% of the company’s total. 
The US market will remain the dominant driver, accounting for over 80% of international profits.