Tokio Marine Earnings: Sale of Toyota Shares to Boost Results Later This Year

Tokio Marine reported economic profit of JPY 233 billion for the June quarter, 23.3% of its full-year target of JPY 1 trillion, a lower progress rate for the fiscal first quarter than the five-year average of 33%, as economic profit in its domestic nonlife business of JPY 10.3 billion was only 9% of that business’ full-year target of JPY 113 billion. This reflected losses of around JPY 34 billion from hail damage in Japan's Hyogo prefecture in April and a negative JPY 25 billion hit from foreign exchange. However, we regard Tokio Marine as on track to meet its overall full-year guidance thanks to continued strength in overseas insurance (whose economic profit of JPY 125 billion reached 27% of that business’s full-year target of JPY 455 billion, with strength in particular at Delphi Financial and HCC) as well as likely full-year upside to the international business from foreign exchange, notwithstanding recent strengthening in the yen.