FY 2022 IR Day
Growth Strategy for Overseas Businesses - MS Amlin Initiatives -
MS & AD Holdings
Tamaki Kawate, Executive Officer
Tuesday, October 4, 2022
MS Amlin 1Q 2022 Results and Full Year Forecast
Due to losses related to Russia-Ukraine and impairment loss of investment assets following rapid market fluctuations, net income for 1st quarter appears to be on a low progress, decreased by 44 million pounds from the previous quarter to -93 million pounds, but generally as planned.
Losses related to Russia-Ukraine has been within our conservative estimate (124 million pounds) in early FY2022.
Investment result should be watched carefully, but showed the better results than other Lloyd's syndicates due to risk control measures.
MS Amlin 1Q Financial Result Summary
million £ | |||
FY2022 | |||
1Q | YoY change | ||
Net premiums written | 1,398 | 125 | |
Underwriting profit/loss | -66 | -25 | |
Investment profit/loss | -21 | -35 | |
Net income after tax | -93 | -44 | |
EI combined ratio | 110.3% | 3.9pp | |
(exc. Russi-Ukraine related loss) | 95.5% | -10.9pp | |
1Q | full-year | |||
forecast | ||||
Incurred loss | 60 | IBNR for property | 60 | |
impact | insurance, etc., mainly | |||
covering war risks | ||||
Preparing for | 35 | Reserves to prepare for | 64 | |
Uncertainty | uncertainty | |||
Current situation:
Even the situation has last long, the loss has been within our estimate planned in early FY2022
We review reserves for each class. But there is no sign of loss expansion
Asset management
Achieved a combined ratio level that | Real estates9% | Others | |
ensures stable profitexcluding the | |||
1% | Cash and | ||
impact of losses related to Russia- | |||
Equities6% | Deposits,etc | ||
Ukraine | |||
33% | |||
Total assets under | |||
Bond funds※33% management | |||
6,359 million £ | |||
(987.2 billion yen) | |||
* Bond funds are funds whose basic strategy is to sell | (As of December 2021) | ||
high-priced bonds and purchase low-priced bonds. | |||
We will take credit risks while controlling losses | Bonds18% | ||
caused by overall rises in interest rates |
(million £) | |
First Quarter | |
Interest & dividend | 24 |
income | |
Capital gains and | -45 |
losses, etc. | |
Total | -21 |
Asset management | -0.3% |
yield |
- A preference for BZD and restrained bond duration resulted in a relatively minor loss from rising interest rates
- Stock hedging program partially mitigates the impact of falling stock prices
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1
Profit Expansion Plan during the Medium-Term Management Plan
Group Adjusted Profit Plan
Overall international businesses | MS Amlin profit plan | ||||||||||||||
Expansion of profits | |||||||||||||||
(billion yen) | About | ||||||||||||||
through | business investments | ||||||||||||||
18.0 | 125.0 | (billion yen) | |||||||||||||
Capturing | growth in Asian | ||||||||||||||
markets, | etc. 6.0 | ||||||||||||||
39.0 | |||||||||||||||
MS Amlin profit growth | 31.0 | ||||||||||||||
44.0 | |||||||||||||||
Russia-Ukraine | |||||||||||||||
Related Impact | |||||||||||||||
Incidental Factors for FY2021 | |||||||||||||||
(Excess of overseas | 4.0 | ||||||||||||||
natural disasters) | |||||||||||||||
-5.0 | |||||||||||||||
26.0 | |||||||||||||||
Incidental Factors for FY2021 | |||||||||||||||
34.3 | (Excess of overseas natural | ||||||||||||||
disasters) | |||||||||||||||
(Fiscal year) | |||||||||||||||
2021 | 2022 | 2023 | 2025 | ||||||||||||
Result | Forecast | Target | Target | ||||||||||||
2021 | Increase factor | 2025 (Fiscal year) | |||||||||||||
Result | Target |
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Direction of MS Amlin's growth
Achievement of midium term management plan "Vision 2021"
AUL :Non-cat risk improvement largely completed
AAG ※ :Response to losses in previous years completed
AISE : Developed the structures which can steadly produce the profit
Going
Forward
Dissolved cross-organization management between MS Amlin companies
following the reorganization of international business in Jan 2020,
We will pursue autonomous growth by leveraging each company's strengths
AUL
AAG ※
AISE
Pursue growth by leveraging the MS Amlin brand's name recognition and contacts, as well as its expertise and know-how, and aim to become one of the top syndicate in both scale and profitability at Lloyd's.
Restructure the portfolio centering mid-term profitability judgement on each client, and secure a presence as a global reinsurer and a stable return of 10% ROE.
Pursue Topline growth and build steadly profit foundation through sales expansion in marine insurance, where AISE has strengths, and niche areas, where AISE has significant expertise.
※In Sep 2022, New brand "MS Reinsurance" has been introduced and used thereafter.
3
AUL portfolio improvement
- AUL reduced its exposure to natural catastrophe risks and restructured its portfolio to improve profitability.
- The earnings structure has been steadily improving due to the withdrawal from unprofitable lines of business, initiatives such as rate increases, and cost reductions through operational efficiency.
Reduction in risk amount of natural catstrophe
- We continue to reduce the risk amount of natural catastrophe and improve the portfolio.
- Model losses (net) assuming a revisit of Hurricane Ida in 2021 is about 65% lower than 2018.
Portfolio improvement in non-cat lines
- The profitability of non-cat risks has improved significantly.
- Aim to expand and optimize the underwriting profit by building a portfolio that can absorb the volatility caused by natural catastrophe losses through selective underwriting.
Net losses in case of Hurricane Ida's revisit
(million US dollars)
Down 65% from 2018
Net loss ratio of non-cat lines
57
62% 62%
Down -12pp from 2018
47
37 | Down 23% |
from 2021 | |
25
24
19
2018Jan 2019Jan 2020Jan 2021Jan 2022Jan 2022Jun
(Year and month)
※Net estimated loss under the treaty for natural catastrophe in North America
58%
53% | ||||
50% | ||||
Excluding Russia-Ukraine | 46% | |||
related losses estimation | ||||
2018 | 2019 | 2020 | 2021 | 2022 |
(Fiscal year) | ※excluding the impact of COVID19 | (Forecast) | ||
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MS&AD Insurance Group Holdings Inc. published this content on 04 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 October 2022 07:41:04 UTC.