Asahi Life’s core profit soars fivefold in FY23

This was equivalent to $190m.

Asahi Life’s fiscal year 2023 (FY23) saw a 3.2% increase in insurance sales, with gross earned premiums rising to $2.76b (¥432b) from $2.68b (¥419b) the previous year. 

The Japanese insurer experienced a slight decline in sales, down 3.2% to $2.35b (¥367b) from $2.42b (¥379b), while its subsidiary, Nanairo Life, significantly increased sales to $0.42b (¥65b) from $0.26b (¥40b). 

The group's core profit surged nearly fivefold, from $0.04b (¥6.3b) to $0.19b (¥30.4b). 

Asahi Life's non-consolidated core profit increased by $0.18b (¥28.9b) to $0.27b (¥42.3b), benefiting from reduced COVID-19-related hospitalisation benefits and lower foreign exchange hedging costs due to a reduction in foreign bond holdings. 

Despite the rise in core profit, net income significantly decreased by 49.5% to $0.04b (¥5.8b) in FY23. 

According to CreditSights, this was due to a reduced release of reserves compared to the previous year and the company setting aside an additional reserve of $0.30b (¥46.3b) for future policy benefits to cover negative investment spreads and future insurance claims. 

The rise in domestic stock prices and yen depreciation positively impacted the consolidated solvency margin, which increased by 56.9 percentage points to 1,036.2%. 

The economic value-based solvency ratio (ESR) was 256.9% at the end of the financial year, the second highest among the companies we cover, behind only Fukoku Life (258.2%) and ahead of Nippon Life and Dai-ichi Life (both at 224%).

Looking ahead, the group expects to maintain the same level of performance as the previous year, with a slight increase in core profit despite higher operating expenses and aims to improve Nanairo Life's results.

($1.00 = ¥156.39)