MS&AD Insurance Group Holdings, Inc.

Business Details

The domestic non-life insurance business segment operated by Mitsui Sumitomo Insurance Co., Ltd. The company provides Fire Insurance, Marine Insurance, Accident Insurance, Automobile Insurance, Compulsory Automobile Liability Insurance, and other non-life insurance products to corporate and individual customers. In FY2026 (ending March 2026), under the initial application of IFRS, the company recorded insurance revenue of ¥1,934,749 million (including internal transactions). Segment profit (profit attributable to owners of the parent) reached ¥182,987 million, a substantial increase of 68.5% year on year.

Recent Overview

Both insurance revenue and segment profit increased substantially under initial IFRS application; merger agreement concluded with Aioi Nissay Dowa Insurance

In FY2026 (ending March 2026), IFRS accounting standards were applied for the first time. Insurance revenue from external customers was ¥1,888,116 million (up 4.9% year on year), and segment profit (profit attributable to owners of the parent) was ¥182,987 million, a substantial increase of 68.5% from ¥108,601 million in the prior period. In addition, Mitsui Sumitomo Insurance Co., Ltd. concluded a merger agreement with Aioi Nissay Dowa Insurance Co., Ltd., with an effective date of April 1, 2027. The company also agreed to establish an insurance agency business company jointly funded with the SMBC Group, effective April 1, 2026. As a subsequent event, a comprehensive resolution was passed for the issuance of domestic unsecured straight bonds up to ¥200 billion.

Key Products

Growth Drivers

• Continued revenue growth through premium rate optimization for Fire Insurance and Automobile Insurance (external customer revenue up 4.9% year on year)
• Scale expansion, cost efficiency, and governance strengthening through the merger with Aioi Nissay Dowa Insurance (planned for April 2027)
• Collaboration on underwriting technology and revenue diversification through investment in W.R. Berkley Corporation
• Strengthening of sales channels through establishment of an insurance agency business company jointly funded with the SMBC Group
• Enhanced underwriting through digital and data utilization, and expansion of revenue from new insurance types
• Improved capital efficiency and utilization of gains on sale of securities through accelerated reduction of strategic shareholdings

Risks

• Risk of deterioration in underwriting profit/loss due to the intensification and increased frequency of natural disasters (estimated domestic natural disaster claims: ¥83.0 billion for Mitsui Sumitomo Insurance, assumption for next fiscal year forecast)
• Continued costs for trust recovery and business restrictions in response to regulatory authorities (Japan Fair Trade Commission, Financial Services Agency) regarding premium adjustment practices in the corporate insurance field
• Integration costs and integration risks associated with the merger with Aioi Nissay Dowa Insurance (occurrence of merger-related expenses)
• Future risk of the disappearance of gains on sale associated with the reduction of strategic shareholdings (target of zero by the end of March 2030)
• Risk of loss ratio deterioration due to rising automobile repair costs, among other factors
• Fluctuations in the measurement of insurance contract liabilities due to initial application of IFRS accounting standards (changes in discount rates and risk adjustments affect profit/loss)

Business Details

Aioi Nissay Dowa Insurance Co., Ltd. is one of the key subsidiaries responsible for the domestic non-life insurance business of the MS&AD Insurance Group. It sells Fire Insurance, Marine Insurance, Accident Insurance, Automobile Insurance, Compulsory Automobile Liability Insurance, and other non-life insurance products. Centered on agency channels, including collaboration with the Toyota retail business, it provides a broad range of non-life insurance services to corporate and individual customers. The company is currently advancing integration preparations for the planned April 2027 merger with Mitsui Sumitomo Insurance.

Recent Overview

Segment profit increased substantially by approximately 76% year on year to ¥118,983 million

In FY2026 (ending March 2026), Aioi Nissay Dowa Insurance's segment profit (profit attributable to owners of the parent) increased substantially to ¥118,983 million from ¥67,632 million in the prior period. Insurance revenue on an external customer basis grew to ¥1,383,727 million (up 4.1% from ¥1,329,133 million in the prior period). Insurance service result was ¥90.1 billion, and insurance finance result was ¥89.8 billion, resulting in profit before tax of ¥154.1 billion. The final agreement and conclusion of the merger contract with Mitsui Sumitomo Insurance, effective April 2027, was a key initiative implemented during the period.

Key Products

Growth Drivers

• Increase in insurance revenue through premium rate optimization for Automobile Insurance and Fire Insurance (external customer revenue up 4.1% year on year)
• Improvement in investment income (financial result of ¥89.8 billion including interest revenue of ¥38,526 million)
• Scale expansion, cost efficiency, and realization of group synergies through the merger with Mitsui Sumitomo Insurance effective April 2027
• Substantial improvement in insurance service result (¥90.1 billion), leading to a surplus in underwriting balance
• Securing stable premium income through agency channels centered on collaboration with the Toyota retail business

Risks

• Continued costs for trust recovery and business restrictions in response to regulatory authorities (Japan Fair Trade Commission, Financial Services Agency) regarding premium adjustment practices in the corporate insurance field
• Risk of deterioration in underwriting profit/loss due to the intensification and increased frequency of natural disasters (domestic natural disaster claims of ¥67.0 billion expected in the next fiscal year forecast)
• Occurrence of system integration and organizational restructuring costs associated with the merger with Mitsui Sumitomo Insurance (effective April 2027)
• Risk of rising automobile insurance loss ratios (repair cost inflation, increase in the number of accidents)
• Impact on investment income and insurance finance result due to fluctuations in interest rates, exchange rates, and stock markets

Business Details

Mitsui Direct General Insurance Co., Ltd. is one of the three companies responsible for the domestic non-life insurance business of the MS&AD Insurance Group. It is a direct-type insurance company that sells non-life insurance directly to individual customers via the internet and telephone without going through agencies. Its main product is Automobile Insurance. It is the smallest in scale within the group, and its insurance service result has continued to post losses. In FY2026 (ending March 2026), insurance revenue increased year on year to ¥40,265 million, but segment loss widened.

Recent Overview

Insurance revenue increased, but segment loss widened from △¥1,479 million to △¥2,248 million in the prior period

In FY2026 (ending March 2026, IFRS basis), insurance revenue from external customers increased to ¥40,265 million (up 12.1% from ¥35,924 million in the prior period). Meanwhile, segment loss (on a profit attributable to owners of the parent basis) widened to △¥2,248 million from △¥1,479 million in the prior period. The loss-making structure continued, with insurance service expenses exceeding insurance revenue of ¥40,265 million. Within the group, the April 2027 merger of Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance has been decided, and attention is focused on the impact on Mitsui Direct's strategic positioning.

Key Products

Growth Drivers

• Improved customer convenience and expanded new customer acquisition through renewal of internet-based contracting systems
• Increase in insurance revenue through premium rate optimization for Automobile Insurance (achieving a 12.1% year-on-year increase)
• Rising awareness of the direct-type insurance market and tailwinds from the digital shift
• Room for improvement in underwriting profit/loss through efficiency gains in claims investigation costs and improved management of claims reserves

Risks

• Continued losses in underwriting profit/loss, with segment loss widening year on year in FY2026 (ending March 2026) (from △¥1,479 million to △¥2,248 million)
• Risk of loss ratio deterioration due to an increasing trend in automobile insurance claims paid
• The April 2027 merger of Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance may concentrate group resources and strategy elsewhere, potentially affecting Mitsui Direct's positioning
• Intensifying competition in the direct-type insurance market (price competition with other direct non-life insurers)
• Unclear outlook for profitability, with a risk of declining strategic priority within the group

Business Details

Mitsui Sumitomo Aioi Life Insurance Co., Ltd. is one of the subsidiaries responsible for the domestic life insurance segment of the MS&AD Insurance Group. Its main products are Individual Insurance (Income Protection Insurance, Term Insurance, etc.), Individual Annuity Insurance, and Group Insurance, and it conducts sales leveraging collaboration with non-life insurance channels (cross-selling of life and non-life insurance). In FY2026 (ending March 2026, IFRS basis), while the insurance service result secured a surplus, the insurance finance result turned substantially negative, and segment profit (profit attributable to owners of the parent) recorded a loss.

Recent Overview

Recorded a segment loss in the first year of IFRS transition due to deterioration in insurance finance result

In FY2026 (ending March 2026, initial application of IFRS), Mitsui Sumitomo Aioi Life secured increased insurance revenue of ¥256,278 million (from ¥252,543 million in the prior period). However, financial result, consisting of investment income of △¥88,100 million (approximate) and insurance finance result of △¥78,700 million (approximate), turned substantially negative, resulting in profit before tax of △¥83,800 million (approximate). Income tax expense also recorded a net refund of △¥23,554 million, and profit attributable to owners of the parent deteriorated substantially to △¥60,293 million from ¥22,280 million in the prior period. Changes in the method of recognizing insurance finance expenses due to the application of IFRS 17 significantly affected profit/loss.

Key Products

Growth Drivers

• Expansion of life insurance cross-selling through non-life insurance sales channels (life/non-life collaboration)
• Improved competitiveness of protection-type products through revision of income protection insurance and term insurance products
• Increase in interest and dividend income through accumulation of foreign currency-denominated bonds and utilization of rising interest rates and yen depreciation
• Enhanced policyholder engagement through expansion of the healthcare service "MSA Care"
• Strengthened after-sales support through establishment of the directly-invested agency "MSA Life Support Agency"

Risks

• Significant impact on profit/loss from fluctuations in insurance finance expenses (insurance finance result) due to application of IFRS 17
• Continuing downward trend in policies in force (total individual insurance)
• Risk of group restructuring costs and sales channel fluctuations associated with the April 2027 merger of Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance
• Long-term contraction of the domestic life insurance market due to population decline and the declining birthrate combined with an aging population
• Risk of fluctuations in investment income and insurance finance result due to changes in interest rates, exchange rates, and stock markets
• Costs of responding to business improvement orders and brand damage risk stemming from information leakage issues

Business Details

Mitsui Sumitomo Primary Life Insurance Co., Ltd. is one of the two companies constituting the domestic life insurance business segment of the MS&AD Insurance Group. Centered on Individual Insurance and Individual Annuity Insurance, it offers a product lineup specializing in savings-type and risk-type financial products such as foreign currency-denominated insurance and variable annuity insurance. It leverages group synergies through alliance sales via non-life insurance sales channels and through mutual product complementarity with Mitsui Sumitomo Aioi Life. In FY2026 (ending March 2026, IFRS), the company achieved insurance revenue of ¥106,741 million and segment profit of ¥127,359 million, a substantial increase in profit.

Recent Overview

Segment profit surged approximately 2.5-fold year on year due to a substantial expansion in investment income

In FY2026 (ending March 2026, IFRS), Mitsui Sumitomo Primary Life's segment profit surged to ¥127,359 million, approximately 2.5 times the ¥50,996 million recorded in the prior period. Insurance revenue slightly decreased year on year to ¥106,741 million, while investment income expanded substantially to ¥653,600 million (approximate), and financial result contributed significantly positively even after offsetting against insurance finance result. Profit before tax reached ¥179,200 million (approximate), and after deducting income tax expense of ¥51,920 million, the company still secured a high level of profit. Interest revenue also increased year on year to ¥99,673 million, with the improved investment environment boosting performance.

Key Products

Growth Drivers

• Increase in policies in force through expanded sales of foreign currency-denominated insurance and variable annuity insurance
• Substantial expansion of asset management income (investment income) leveraging rising interest rates and yen depreciation
• Realization of group synergies through promotion of alliance sales via non-life insurance channels
• Strengthening of the revenue base of the entire domestic life insurance business through mutual product complementarity with Mitsui Sumitomo Aioi Life
• Expansion of stable interest income through an increase in interest revenue (¥99,673 million)

Risks

• Risk of profit pressure due to substantial expansion of insurance finance result (net insurance finance expenses), stemming from discount rate fluctuations under IFRS 17
• Expanding exchange rate and market risk associated with the sale of foreign currency-denominated insurance and variable insurance
• Interest rate risk (risk of insurance contract liability revaluation during periods of rising interest rates)
• Increasing regulatory compliance costs related to strengthening the sales management framework for foreign currency-denominated insurance and other risk-type financial products
• Group-wide reputational risk stemming from information leakage issues, and the burden of responding to business improvement orders from the Financial Services Agency
• Increased profit/loss volatility due to fluctuations in the measurement of insurance contract liabilities (changes in discount rates and risk adjustments) under IFRS 17

Business Details

Overseas local subsidiaries and overseas branches of domestic non-life insurance subsidiaries conduct non-life insurance business in various countries. Fire Insurance, Marine Insurance, Accident Insurance, Automobile Insurance, and other non-life insurance products are sold in the Lloyd's and Reinsurance (MS Amlin), Asia, Europe, and Americas regions. Segment profit is calculated on a profit basis reflecting equity interests. In FY2026 (ending March 2026, current consolidated fiscal year), insurance revenue exceeded ¥2,507,600 million (external customer revenue of ¥2,462,744 million), expanding year on year and driving growth for the group overall.

Recent Overview

Both insurance revenue and segment profit increased substantially; business strengthened through the W.R. Berkley investment and other initiatives

In FY2026 (ending March 2026), insurance revenue from external customers reached ¥2,462,744 million (up ¥338,593 million year on year), and segment profit reached ¥234,456 million (up ¥57,059 million year on year), representing a substantial increase. Investment in W.R. Berkley Corporation promoted revenue diversification and collaboration on underwriting technology. MSIG Specialty Insurance America, Inc. was newly consolidated. The overseas business management function was consolidated into the holding company, and an IEC (International Executive Committee) was established to accelerate decision-making. In addition, shares in the Australian financial group Challenger Limited were sold, achieving improved capital efficiency.

Key Products

Growth Drivers

• Revenue diversification and underwriting technology collaboration in the specialty insurance field through investment in W.R. Berkley Corporation
• Accelerated decision-making and enhanced resource allocation function through consolidation of overseas business management functions into the holding company and establishment of the IEC
• Expansion of the Americas business through new consolidation of MSIG Specialty Insurance America, Inc.
• Improved underwriting results through global premium rate optimization and strengthened underwriting
• Expansion of insurance revenue across the Asia, Europe, and Americas regions (external customer revenue up 15.9% year on year)
• Increase in share of profit from equity-method investments (¥33,491 million, up ¥4,550 million year on year)

Risks

• Risk of increased insurance claim payments due to the intensification and increased frequency of natural disasters (impact of large-scale natural disasters in various overseas regions)
• Exchange rate fluctuation risk (erosion of yen-converted revenue when the yen appreciates)
• Deterioration of the overseas business environment due to heightened geopolitical risk (Middle East situation, US policy trends, etc.)
• Investment risk and goodwill impairment risk associated with investments in W.R. Berkley Corporation and others
• Timing lag in profit/loss recognition arising from differences between the fiscal year-end of overseas insurance subsidiaries and the consolidated fiscal year-end
• Impairment risk related to goodwill and intangible assets associated with overseas business (impairment losses on overseas business goodwill, etc. have already been recognized at the time of IFRS transition)

Business Details

The "Others" segment aggregates business activities not included in the reportable segments (the five domestic non-life insurance companies and overseas insurance subsidiaries). Specifically, it includes: (1) domestic non-life insurance business operated by domestic insurance companies other than the reportable segments; (2) Financial Services Business such as asset management and venture capital operated by group companies; (3) Digital and Risk-Related Services Business such as risk management; and (4) Business Investment made by the Company in entities other than group companies. It serves a complementary and supportive function for the group overall, and its scale is limited.

Recent Overview

Segment profit improved to ¥15,253 million, up 12.1% year on year; share of profit from equity-method investments also increased

In the "Others" segment for FY2026 (ending March 2026), revenue from external customers slightly decreased to ¥19,156 million (down 2.9% from ¥19,725 million in the prior period), while segment profit improved to ¥15,253 million (up 12.1% from ¥13,608 million in the prior period). Share of profit from equity-method investments increased to ¥3,578 million (from ¥3,095 million in the prior period), expanding its contribution to profit. Income tax expense decreased to ¥4,124 million (from ¥4,732 million in the prior period). Note that IFRS accounting standards have been voluntarily applied from this fiscal year's results, and prior period figures are also presented on a comparative IFRS basis.

Key Products

Growth Drivers

• Increased contribution to segment profit through growth in share of profit from equity-method investments (¥3,578 million, up ¥483 million year on year)
• Increased revenue opportunities through expansion of assets under management in asset management business and venture capital business, among others
• Expanding demand for corporate risk management in the Digital and Risk-Related Services Business (in conjunction with the group's CSV×DX strategy)
• Strengthened relationships with investors and business partners through improved international comparability of financial information following the transition to IFRS accounting standards

Risks

• Segment scale is limited (external customer revenue of ¥19,156 million), and while the impact on overall group performance is minor, fluctuations in the financial market environment directly affect revenue from the asset management business
• Revenue from external customers decreased 2.9% year on year, indicating revenue instability due to changes in the business environment and internal transaction structures
• The Financial Services Business and Digital Risk Business face intense competition from rivals, making it a challenge to maintain differentiation
• Future goodwill recognition risk associated with new business investments and risk of fluctuation in equity-method profit/loss due to deterioration in the performance of investees