Q1 2027 T&D Holdings Inc Earnings Call Transcript
Key Points
- Group adjusted profit solidly progressed to JPY53.2 billion, on track toward the full-year forecast of JPY172 billion.
- All three life insurance companies and T&D United Capital achieved profit growth, with T&D Financial fully eliminating its accumulated deficit.
- Group embedded value increased by JPY152.4 billion to JPY4,391 billion, driven by new business value and higher equity markets.
- Economic solvency ratio improved to 229%, up 7 percentage points, with surplus growth and stable economic capital.
- Strategic shareholding reduction is on track, with 63% of reclassified shares divested and progress toward the 40% reduction target by March 2028.
- Portfolio rebalancing is ahead of plan, with annualized interest income increase of approximately JPY2.5 billion from yen-denominated bond replacement.
- Daido Life's new policy sales remained solid, with core term life products exceeding prior-year levels and July showing strong momentum.
- T&D United Capital's adjusted profit increased by JPY2.4 billion year on year, supported by Viridium contributions.
- Alternative investments at Taiyo and Daido are performing well, with Q1 returns JPY5-6 billion ahead of plan, particularly in private equity.
- Insurance underwriting profit is outperforming the plan at both Taiyo and Daido, due to lower death benefits and favorable expense timing.
- Surrender and lapse rates increased at all three life insurance companies, with Taiyo seeing higher surrenders in the bank assurance channel.
- New policy sales declined year on year at Taiyo and TDF, with Taiyo's bank assurance channel significantly impacted by OTC sales stoppage.
- Fortitude's Q1 performance was below budget due to lower alternative investment income and an increase in expected credit loss provisions.
- Daido Life's new business value progress rate appears weak due to a slower product mix, with J-type products having higher margins but slower sales.
- Foreign exchange sensitivity remains a risk, with a JPY1 appreciation reducing adjusted group profit by approximately JPY0.5 billion.
- Operating expenses increased at both Taiyo and Daido due to higher personnel costs, IT investments, and policy-related expenditures.
- TDF's new policy sales declined due to lower sales of single premium individual annuities.
- The company faces uncertainty in forecasting alternative investment income, which is highly dependent on individual fund performance and market volatility.
- Daido Life's surrender and lapse rate increased due to inflation-driven policyholder fund needs and product switching, though July showed improvement.
- The pace of bond replacement is ahead of schedule, but the company cannot confirm whether the total volume will increase, limiting upside visibility.
This is Ito from the IR department of T&D Holdings. Thank you for joining our earnings call today. The materials are available on the group website under Investor Relations, IR Events section. Today, I will go through the presentation for approximately 10 minutes, which will be followed by a Q&A session.
Let me start on page 3. Firstly, I would like to present the key highlights of the financial results. The group adjusted profit solidly progressed to JPY53.2 billion toward a full-year forecast of JPY172 billion.
In terms of sales results of new policies, Daido was brightly in line with the previous year, while Taiyo and TDF exceeded their respective plans, although both companies saw sales results decline year on year. Surrender and lapse rates increased at all three life insurance companies. The combined value of new business for the three life insurance companies was JPY40.8 billion, compared with a four-year forecast of JPY172 billion.
Group EV stood at JPY4,391 billion, while the ESR
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