Meiji Yasuda Life’s core profit up 27% from strong sales

The weaker yen against the US dollar also boosted profits.

Japan-based Meiji Yasuda Life's underwriting profitability has been recovering, as well as growing its US operations. However, Fitch Ratings highlighted the insurer’s vulnerability to market volatility due to its significant equity investments and exposure to foreign exchange and interest-rate fluctuations.

The insurer’s core profit margin rose to 18% by the end of March 2024, up from 12% a year earlier, due to lower claims related to "deemed hospitalisations" following the easing of COVID-19 restrictions in May 2023. 

The weaker yen against the US dollar also boosted profits. Premium and core profit increased by 15% and 27%, respectively, in the first quarter of the financial year ending March 2025, driven by strong sales of foreign currency-denominated products.

Meiji Yasuda Life is expanding its US presence through its subsidiary, StanCorp Financial Group, with the acquisition of American Heritage Life Insurance. 

This move is expected to strengthen the company’s international footprint and diversify its revenue streams. By March 2024, earnings from overseas and other group businesses rose to 16% of group core profit, up from 13% a year earlier.

The insurer’s capital adequacy improved, with its solvency margin ratio remaining high at 1,033% in the first quarter of the 2025 fiscal year. 

The group’s economic-solvency ratio rose to around 220% by March 2024, up from 207% a year earlier. The financial leverage ratio also dropped to 12% from 18% over the same period.

Despite its strong capital position, Fitch noted that Meiji Yasuda Life’s risky-asset ratio, at 109% in March 2024, exceeds the guideline for its current ratings. The company continues to hold significant investments in Japanese equities and government bonds.