Fukoku Life posts record core profit in FY23

Despite a slight dip in premiums, its core profit accumulated $640m.

Japanese insurer, Fukoku Life, saw its insurance premiums dip 0.3% to $4.85b (¥758b) in the fiscal year ending 2023 (FY23). 

Fukoku Life saw a 6.6% drop in gross premiums to $3.14b (¥491b), but its subsidiary, Fukokushinrai Life, showed strength with a 13.8% increase in whole-life product premiums through the bancassurance channel, reaching $1.71b (¥267b). 

On a consolidated basis, annualised premiums from new business grew by 6.6% to $0.20b (¥31.5b), marking a three-year growth trend. 

The group's core profit doubled to a record $0.64b (¥99.5b) in FY23, despite the slight decline in premiums. 

CreditSights indicated that this improvement was due to reduced COVID-19-related benefit payouts, lower hedging costs, and improved investment income. 

Fukoku Life's financial strength remains robust, with the consolidated solvency margin ratio rising to 1,189.7%, an increase of 17.8 percentage points from the previous year. 

Investment-wise, the company strategically reduced its holdings of hedged foreign bonds, which were less profitable due to high hedging costs, and diversified its portfolio by increasing investments in unhedged foreign bonds and alternative assets such as private equity funds.

 However, the strong appreciation of the yen remains a key risk for the unhedged exposure.

($1.00 = ¥156.39)