MS&AD profit stalls after $1.5b guidance beat

FY 2025 adjusted profit reached $6.3b, helped by equity sales and lower catastrophe losses.

MS&AD Insurance Group Holdings expects profit to stay broadly stable in fiscal 2026, even after adjusted profit for fiscal 2025 beat guidance by $1.5b (JPY240b).

The Japan-based insurer reported adjusted profit of $6.3b (JPY1.001t) for fiscal 2025.

The result was helped by higher gains from equity sales, lower catastrophe losses, and stronger investment income, according to Morningstar.

For fiscal 2026, management’s guidance points to a weaker outlook. Excluding equity sales gains, adjusted profit is expected to remain largely flat.

Morningstar said a $787.5m (JPY125b) lower outlook for equity sales gains is also likely to weigh on shareholder returns.

Domestic non-life profit is expected to fall slightly in fiscal 2026 when equity sales gains are excluded.

This is mainly due to a return to more normal catastrophe loss levels. Still, underlying profitability is expected to improve as premium rates rise and expenses are kept under tighter control.

MS&AD’s overseas adjusted profit is expected to grow 1% in fiscal 2026.

This will be supported by equity income from W.R. Berkley, the US-listed insurer in which MS&AD has invested. 

Morningstar said the company’s investments in W.R. Berkley and Barings could help narrow the gap with peers in the specialty insurance market, as Lloyd’s and reinsurance earnings stabilise.

Morningstar forecasts MS&AD’s net earned premiums to rise from $36.3b (JPY5.76t) in fiscal 2026 to $38.3b (JPY6.08t) in fiscal 2027 and $40.4b (JPY6.41t) in fiscal 2028.

Total revenue is expected to grow from $45.9b (JPY7.28t) in fiscal 2026 to $48.5b (JPY7.70t) in fiscal 2027 and $51.0b (JPY8.09t) in fiscal 2028.

Net income is forecast at $5.0b (JPY787.34b) in fiscal 2026, rising to $5.1b (JPY815.89b) in fiscal 2027 and $5.3b (JPY838.16b) in fiscal 2028.

Diluted earnings per share are expected to increase from $3.33 (JPY528.87) in fiscal 2026 to $3.56 (JPY564.85) in fiscal 2027 and $3.76 (JPY596.87) in fiscal 2028.

($1.00 = JPY159.63)