Core profit margin reached 20% in FY 2026 from 19% a year earlier.
Nippon Life Insurance is expected to maintain strong capitalisation as improving profitability supports further capital accumulation, whilst its acquisition of Resolution Life is set to increase the share of earnings generated outside Japan, Fitch Ratings said.
Fitch expects Nippon Life’s profitability to continue improving, helped by a declining average guaranteed yield and moderately higher yen bond yields.
Its core profit margin rose to 20% in the financial year ended March 2026 (FY 2026), from 19% a year earlier, whilst pre-tax return on assets increased to 1.2% from 1.1%.
Fitch said Nippon Life’s capital adequacy is amongst the strongest of Japan’s major life insurers.
As a mutual insurer, Nippon Life is not subject to shareholder demands for share buybacks or higher dividends, giving it greater flexibility in managing capital.
Fitch believes this could allow its ESR to remain well above 200%, a level that is harder for listed insurers to sustain.
The acquisition of Resolution Life is also expected to broaden Nippon Life’s earnings base. Fitch expects about 20% of the group’s consolidated core profit to come from outside Japan as the insurer expands its overseas operations.
Nippon Life has earmarked $12.69b (JPY2t) for mergers and acquisitions under its FY 2025 to FY 2027 medium-term management plan. Fitch expects this investment to support further geographical diversification of earnings.
($1.00 = JPY157.63)