Meiji Yasuda to keep premiums modest in FY 2024 with 1.5% YoY rise

Despite the challenges, Meiji Yasuda's credit quality remains robust.

Meiji Yasuda Life Insurance will likely focus on boosting its insurance premiums and expanding its overseas businesses, with premiums expected to inch up 1.5% year-on-year (YoY) in 2024 (FY 2024), CreditSights said. 

Looking forward, CreditSights expects Meiji Yasuda to keep a modest 1.5% increase in insurance premiums for FY2024, reaching approximately $22.98b (¥3.38t), partly due to the consolidation of Elevance Health. 

The company also announced plans to acquire the Employer Voluntary Benefits (EVB) business from Allstate through StanCorp, reinforcing and expanding its business foundation. 

Meiji Yasuda aims to achieve a core profit exceeding $680m (¥100b) by fiscal 2026 for its overseas business, compared to the current $367.2m (¥54b) target for StanCorp in FY2024.

As of June 2024, the group's total assets exceed $360b, with a consolidated cash position of approximately $5.8b. Despite the challenges, Meiji Yasuda's credit quality remains robust, supported by a solvency level surpassing 1,000%.

The Japanese insurer has also maintained a steady performance, supported by its solid solvency ratio and diversified business profile. 

In the first quarter of fiscal year 2024 (Q1 2024), the company reported a 14.9% YoY increase in insurance premium income, rising from $5.24b (¥771b) to $6.03b (¥886b). 

This growth was driven by increased sales of single premium foreign currency-denominated products. 

StanCorp, a subsidiary, saw a 20.4% YoY surge in insurance premiums due to favourable persistence rates, yen depreciation, and new policy sales in its core group insurance business. The company's core profit improved significantly, increasing by 27% from $600m (¥88.2b) in 1Q23 to $761.6m (¥112b) in Q1 2024, largely due to higher interest income from foreign bonds benefiting from the yen's depreciation. 

StanCorp's contribution to the group's growth was notable, with its core profit increasing by 56% from $85.68m (¥12.6b) to $133.96m (¥19.7b), driven by a decrease in benefit payments. 

Despite a slight decline in its solvency margin ratio from 1,048.9% at the end of FY2023 to 1,032.6% in Q1 2024, attributed to increased investment risks, the company’s balance sheet remains strong. 

($1.00 = ¥147.68)