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FORM 6-K
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
Commission File Number: 333-163336-01
For the month of February 2010.
NIPPONKOA Insurance Company, Limited
(Translation of registrant’s name into English)
7-3, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo 100-8965
Japan
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-
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Information furnished on this form:
[Translation in English]
News Release
1. | Summary of financial statements for the first three quarters of the fiscal year ending March 31, 2010 |
2. | Quarterly Securities Report for the Three Months Ended December 31, 2010 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NIPPONKOA Insurance Company, Limited | ||||
Date: February 17, 2010 | ||||
By: | /S/ TAKASHI MIWA | |||
Takashi Miwa | ||||
General Manager of General Affairs Dept. |
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The official press release document is in Japanese.
NIPPONKOA Insurance Co., Ltd.
Summary of financial statements for the first three quarters of the fiscal year ending March 31, 2010
February 12, 2010
Name of listed company: | NIPPONKOA Insurance Co., Ltd. | Stock exchanges: | Tokyo, Osaka and Nagoya | |||||||||
Code number: | 8754 | URL | http://www.nipponkoa.co.jp/ | |||||||||
Representative: | (Title) | President & CEO | (Name) | Makoto Hyodo | ||||||||
Contact: | (Title) | Acct. Group Leader, Acct. Dept. | (Name) | Kazuhisa Tamura | Tel | +81-(03)3593-5127 | ||||||
Scheduled submission date of Quarterly financial report: | February 12, 2010 | |||||||||||
Scheduled starting date of payment of dividends: | — |
(Amounts indicated are truncated and percentages indicated are rounded to the nearest number)
1. Consolidated financial results for the first three quarters of the fiscal year ending March 31, 2010
(1) Consolidated results of operations | (Percentage figures indicated are year-on-year changes of the first three quarters of fiscal years) | |||||||||||||
Operating income | Ordinary profit | Net income | ||||||||||||
(Millions of Yen) | (%) | (Millions of Yen) | (%) | (Millions of Yen) | (%) | |||||||||
First three quarters of the fiscal year ending March 31, 2010 | 672,458 | (6.7 | ) | 23,446 | 114.9 | 13,939 | (29.6 | ) | ||||||
First three quarters of the fiscal year ended March 31, 2009 | 720,852 | — | 10,912 | — | 19,798 | — |
Basic net income per share | Diluted net income per share | |||
(Yen) | (Yen) | |||
First three quarters of the fiscal year ending March 31, 2010 | 18.52 | 18.49 | ||
First three quarters of the fiscal year ended March 31, 2009 | 26.05 | 26.02 |
(2) Consolidated financial positions
Total assets | Total net assets | Equity ratio | Net assets per share | |||||
(Millions of Yen) | (Millions of Yen) | (%) | (Yen) | |||||
As of December 31, 2009 | 3,047,301 | 411,797 | 13.5 | 546.10 | ||||
As of March 31, 2009 | 3,089,523 | 345,467 | 11.2 | 458.09 |
(Reference) Equity capital | ||
As of December 31, 2009 | 410,861 million yen | |
As of March 31, 2009 | 344,674 million yen |
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2. Dividends
Dividend per share | ||||||||||
1st quarter-end | 2nd quarter-end | 3rd quarter-end | Fiscal year-end | Annual | ||||||
(Yen) | (Yen) | (Yen) | (Yen) | (Yen) | ||||||
As of March 31, 2009 | — | — | — | 8.00 | 8.00 | |||||
As of March 31, 2010 | — | — | — | — | — | |||||
As of March 31, 2010 (Forecasts) | — | — | — | 8.00 | 8.00 | |||||
(Note) Changes in the forecasts during the 3rd quarter: N/A
3. Forecasts of consolidated results of operations (from April 1, 2009 to March 31, 2010)
(Percentage figures indicated are year-on-year changes of fiscal years) | |||||||||||||||
Operating income | Ordinary profit | Net income | Net income per share | ||||||||||||
(Millions of Yen) | (%) | (Millions of Yen) | (%) | (Millions of Yen) | (%) | (Yen) | |||||||||
Fiscal year ending March 31, 2010 | 890,000 | (6.2 | ) | 24,000 | — | 13,000 | 30.4 | 17.27 |
(Note) Changes in the forecasts during the 3rd quarter: N/A
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4. Others
(1) | Changes in significant subsidiaries during the period (Changes in specified subsidiaries accompanying in changes in the scope of consolidation): N/A |
(2) | Adoption of simplified accounting methods or accounting methods that are specific to the quarterly Consolidated Financial Statements: N/A |
(3) | Changes in accounting policies, procedures and presentations applied to Consolidated Financial Statements |
(a) | Changes to reflect amendments of accounting standards and related matters: N/A |
(b) | Changes other than (a): N/A |
(4) | Number of shares issued (common stock) |
(a) | Total number of the shares issued (treasury stock included) |
As of December 31, 2009 | 816,743,118 shares | |
As of March 31, 2009 | 816,743,118 shares |
(b) | Number of treasury stock held |
As of December 31, 2009 | 64,398,932 shares | |
As of March 31, 2009 | 64,339,041 shares |
(c) | Average number of shares outstanding |
First three quarters of the fiscal year ending March 31, 2010 | 752,501,702 shares | |
First three quarters of the fiscal year ended March 31, 2009 | 759,759,181 shares |
Cautionary Statement:
This publication contains estimates, projections, targets, and other figures and statements related to the plans and future performance of NIPPONKOA Insurance Co., Ltd. and its subsidiaries (hereinafter Nipponkoa). These estimates, projections, etc., are not historical facts. Rather, they are forward-looking figures and statements based on Nipponkoa’s assumptions and beliefs in light of the information currently available to it. Nipponkoa cautions you that a number of factors could cause actual performance results to differ materially from those contained in this publication. See “3. Forecasts of consolidated results of operations” in [Qualitative information and financial statements] for details.
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[Qualitative information and financial statements]
1. Qualitative information concerning the consolidated results of operations
In the first three quarters of the current fiscal year, the Japanese economy remained in a severe situation of worsened income, because of stagnant capital investment and high unemployment rate even though export and production levels slightly improved and economic policy pushed up consumer spending in some part.
Under such conditions, the result of operations of Nipponkoa in the first three quarters of the current fiscal year is as follows.
633.6 billion yen of underwriting income, 38.2 billion yen of investment income and 0.5 billion yen of other operating income resulted in operating income of 672.4 billion yen, which was a decrease of 48.3 billion yen compared to the first three quarters of the previous fiscal year.
In contrast, 534.0 billion yen of underwriting expenses, 9.7 billion yen of investment expenses, 104.5 billion yen of operating and administrative expenses and 0.6 billion yen of the other operating expenses resulted in operating expenses of 649.0 billion yen, which was a decrease of 60.9 billion yen compared to the first three quarters of the previous fiscal year.
As a result, Nipponkoa recorded an ordinary profit of 23.4 billion yen, which was an increase of 12.5 billion yen compared to the first three quarters of the previous fiscal year. Addition of special gains and losses to the ordinary profit and deduction of total income taxes and minority interests from the ordinary profit resulted in net income of 13.9 billion yen, which was a decrease of 5.8 billion yen compared to the first three quarters of the previous fiscal year.
In the business of non-life insurance, net premiums written was 489.5 billion yen, which was a decrease of 16.7 billion yen compared to the first three quarters of the previous fiscal year, and net losses paid was 305.0 billion yen, which was an increase of 1.1 billion yen compared to the first three quarters of the previous fiscal year. In a voluntary automobile insurance, a major line of business, net premiums written was decreased by 3.4 billion yen to 248.3 billion yen and net losses paid was increased by 2.8 billion yen to 155.5 billion yen compared to the first three quarters of the previous fiscal year.
In contrast, in the business of life insurance, net premiums were 48.0 billion yen, which was an increase of 0.6 billion yen compared to the first three quarters of the previous fiscal year. Life insurance losses and other payments were 8.9 billion yen, which was an increase of 0.7 billion yen compared to the first three quarters of the previous fiscal year.
2. Qualitative information concerning the consolidated financial positions
The total assets amounted to 3,047.3 billion yen, which was a decrease of 42.2 billion yen as compared to the previous fiscal year-end, as a result of a decrease of Payable under securities lending transactions, as a major factor, while the Total valuation and translation adjustments on the available-for-sale securities increased due to a rise of stock prices and other factors.
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3. Forecasts of consolidated results of operations (from April 1, 2009 to March 31, 2010)
There was no change in the forecasts of consolidated results of operations since last announced on November 19, 2009.
4. Others
(1) | Changes in significant subsidiaries during the period (Changes in specified subsidiaries accompanying in changes in the scope of consolidation): N/A |
(2) | Adoption of simplified accounting methods or accounting methods that are specific to the quarterly Consolidated Financial Statements: N/A |
(3) | Changes in accounting policies, procedures and presentations applied to Consolidated Financial Statements: N/A |
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5. Consolidated Financial Statements
(1) Consolidated Balance Sheets
(Millions of Yen) | ||||||
As of December 31, 2009 | As of March 31, 2009 | |||||
Assets | ||||||
Cash and bank deposits | 91,828 | 113,074 | ||||
Call loans | 28,528 | 16,043 | ||||
Receivables under resale agreements | 16,996 | 29,996 | ||||
Receivables under securities borrowing transactions | 24,403 | 32,127 | ||||
Monetary receivables bought | 6,631 | 41,300 | ||||
Money in trust | 77,095 | 74,843 | ||||
Investments in securities | 2,177,044 | 2,134,547 | ||||
Loans | 243,697 | 242,215 | ||||
Tangible fixed assets | 131,671 | 129,928 | ||||
Intangible fixed assets | 1,183 | 1,146 | ||||
Other assets | 176,947 | 167,746 | ||||
Deferred tax assets | 73,688 | 108,748 | ||||
Reserve for doubtful accounts | (2,413 | ) | (2,195 | ) | ||
Total assets | 3,047,301 | 3,089,523 | ||||
Liabilities | ||||||
Underwriting fund | 2,508,722 | 2,557,377 | ||||
Outstanding claims | 286,995 | 290,239 | ||||
Underwriting reserves | 2,221,726 | 2,267,137 | ||||
Other liabilities | 96,378 | 155,289 | ||||
Reserve for retirement benefits | 23,807 | 22,007 | ||||
Reserve for bonuses | 1,517 | 6,127 | ||||
Reserve for bonuses to directors | — | 11 | ||||
Statutory reserves | 5,045 | 3,060 | ||||
Reserve for price fluctuations | 5,045 | 3,060 | ||||
Deferred tax liabilities | 33 | 37 | ||||
Negative goodwill | — | 146 | ||||
Total liabilities | 2,635,504 | 2,744,056 | ||||
Net assets | ||||||
Shareholders’ equity | ||||||
Common stock | 91,249 | 91,249 | ||||
Capital surplus | 46,702 | 46,702 | ||||
Retained earnings | 177,739 | 169,993 | ||||
Treasury stock | (58,089 | ) | (58,122 | ) | ||
Total shareholders’ equity | 257,601 | 249,822 | ||||
Valuation and translation adjustments | ||||||
Net unrealized gains on available-for-sale securities | 156,844 | 97,349 | ||||
Net deferred gains (losses) on hedge accounting | 2,294 | 3,700 | ||||
Foreign currency translation adjustment | (5,879 | ) | (6,198 | ) | ||
Total valuation and translation adjustments | 153,259 | 94,851 | ||||
Subscription rights to shares | 594 | 458 | ||||
Minority interests | 342 | 334 | ||||
Total net assets | 411,797 | 345,467 | ||||
Total liabilities and net assets | 3,047,301 | 3,089,523 | ||||
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(2) Consolidated Statements of Income
(Millions of Yen) | ||||||
First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | |||||
Operating income | 720,852 | 672,458 | ||||
Underwriting income | 670,437 | 633,608 | ||||
Net premiums written | 506,273 | 489,564 | ||||
Deposit premiums from policyholders | 43,230 | 29,725 | ||||
Investment income on deposit premiums | 19,186 | 17,292 | ||||
Life insurance premiums | 47,372 | 48,005 | ||||
Reversal of outstanding claims | 1,765 | 3,378 | ||||
Reversal of underwriting reserves | 51,677 | 44,617 | ||||
Investment income | 48,928 | 38,271 | ||||
Interest and dividends | 47,872 | 41,670 | ||||
Investment income from money in trust | 690 | 2,230 | ||||
Gain on sale of securities | 19,276 | 8,279 | ||||
Transfer of investment income on deposit premiums | (19,186 | ) | (17,292 | ) | ||
Other operating income | 1,486 | 578 | ||||
Operating expenses | 709,940 | 649,011 | ||||
Underwriting expenses | 564,039 | 534,062 | ||||
Net losses paid | 303,888 | 305,086 | ||||
Loss adjustment expenses | 26,601 | 26,843 | ||||
Commissions and brokerage expenses | 88,777 | 86,594 | ||||
Maturity refunds to policyholders | 134,430 | 105,924 | ||||
Life insurance losses and other payments | 8,173 | 8,943 | ||||
Investment expenses | 39,158 | 9,769 | ||||
Investment loss from money in trust | 3,879 | 196 | ||||
Loss on sales of securities | 7,203 | 2,834 | ||||
Revaluation loss on securities | 21,514 | 2,856 | ||||
Operating and administrative expenses | 105,942 | 104,536 | ||||
Other operating expenses | 799 | 642 | ||||
Interest paid | 164 | 69 | ||||
Ordinary profit | 10,912 | 23,446 | ||||
Special gains | 16,095 | 398 | ||||
Reversal of statutory reserves | 15,912 | — | ||||
Reversal of reserve for price fluctuations | 15,912 | — | ||||
Other | 183 | 398 | ||||
Special losses | 323 | 4,795 | ||||
Provision for statutory reserves | — | 1,985 | ||||
Provision for reserve for price fluctuations | — | 1,985 | ||||
Other | 323 | 2,810 | ||||
Income before income taxes and minority interests | 26,684 | 19,049 | ||||
Income taxes | 3,572 | 917 | ||||
Deferred tax adjustment | 3,284 | 4,173 | ||||
Total income taxes | 5,090 | |||||
Minority interests | 28 | 18 | ||||
Net income | 19,798 | 13,939 | ||||
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(3) Consolidated Statements of Cash Flows
(Millions of Yen) | ||||||
First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | |||||
Cash flows from operating activities: | ||||||
Income (loss) before income taxes and minority interests | 26,684 | 19,049 | ||||
Depreciation | 5,193 | 5,247 | ||||
Impairment losses | 134 | 68 | ||||
Amortization of goodwill | (219 | ) | (146 | ) | ||
Increase (decrease) in reserve for outstanding claims | (1,796 | ) | (3,383 | ) | ||
Increase (decrease) in underwriting reserves | (52,483 | ) | (45,432 | ) | ||
Increase (decrease) in reserve for doubtful accounts | (357 | ) | 213 | |||
Increase (decrease) in reserve for retirement benefits | (20,975 | ) | 1,799 | |||
Increase (decrease) in reserve for bonuses | (4,619 | ) | (4,609 | ) | ||
Increase (decrease) in reserve for bonuses to directors | (8 | ) | (11 | ) | ||
Increase (decrease) in reserve for price fluctuations | (15,912 | ) | 1,985 | |||
Interest and dividend income | (47,872 | ) | (41,670 | ) | ||
Net loss (gain) on investments in securities | 12,181 | (4,127 | ) | |||
Interest charges | 164 | 69 | ||||
Net loss (gain) on foreign exchange | 1,156 | 82 | ||||
Net loss (gain) on sales of tangible fixed assets | 5 | (66 | ) | |||
Net loss (gain) on loans | 37 | — | ||||
Net loss (gain) on money in trust | 3,785 | (1,492 | ) | |||
Decrease (increase) in other current assets (excludes investing and financing activities) | (1,356 | ) | (5,917 | ) | ||
Increase (decrease) in other current liabilities (excludes investing and financing activities) | (541 | ) | (6,092 | ) | ||
Other, net | 7,196 | (10,936 | ) | |||
Sub-total | (89,603 | ) | (95,369 | ) | ||
Interest and dividend received | 48,400 | 40,792 | ||||
Interest paid | (133 | ) | (140 | ) | ||
Income taxes paid | (7,971 | ) | (6,008 | ) | ||
Net cash provided by (used in) operating activities (a) | (49,308 | ) | (60,726 | ) | ||
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(Millions of Yen) | ||||||
First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | |||||
Cash flows from investing activities: | ||||||
Net decrease (increase) in short-term investments | (1,934 | ) | 1,505 | |||
Purchases of monetary receivables bought | (990 | ) | — | |||
Proceeds from sales or maturity of monetary receivables bought | 6,362 | 3,628 | ||||
Increase in money in trust | (13,400 | ) | (17,000 | ) | ||
Decrease in money in trust | 12,040 | 17,002 | ||||
Purchases of investments in securities | (579,415 | ) | (202,128 | ) | ||
Proceeds from sales or maturity of investments in securities | 618,362 | 257,744 | ||||
Loans made | (60,840 | ) | (41,532 | ) | ||
Collection of loans | 42,835 | 40,049 | ||||
Increase (decrease) in cash received under securities lending transactions | 55,234 | (33,705 | ) | |||
Sub-total (b) | 78,253 | 25,564 | ||||
(a)+(b) | 28,944 | (35,161 | ) | |||
Acquisition of tangible fixed assets | (2,930 | ) | (7,511 | ) | ||
Proceeds from sales of tangible fixed assets | 496 | 606 | ||||
Acquisition of shares in a subsidiary that accompany changes in the scope of consolidation | — | (20 | ) | |||
Other, net | (48 | ) | (53 | ) | ||
Net cash provided by (used in) investing activities | 75,771 | 18,585 | ||||
Cash flows from financing activities: | ||||||
Treasury stock acquired | (6,766 | ) | (123 | ) | ||
Sales of treasury stock | 88 | 89 | ||||
Dividends paid | (5,716 | ) | (6,019 | ) | ||
Dividends paid to minority interests | (12 | ) | (8 | ) | ||
Other, net | (262 | ) | (8 | ) | ||
Net cash provided by (used in) financing activities | (12,670 | ) | (6,069 | ) | ||
Effect of exchange rate changes on cash and cash equivalents | (1,274 | ) | 18 | |||
Net increase (decrease) in cash and cash equivalents | 12,517 | (48,192 | ) | |||
Cash and cash equivalents at beginning of year | 140,825 | 168,525 | ||||
Cash and cash equivalents at the end of the 3rd quarter | 153,342 | 120,333 | ||||
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(4) Note related to the premise of a going concern
N/A
(5) Segment Information
[Information by types of business segment]
First three quarters of the fiscal year ended March 31, 2009
(Millions of Yen) | ||||||||||
Non-life insurance | Life insurance | Total | Elimination | Consolidated | ||||||
Operating income | ||||||||||
(1) Transactions with external customers | 699,085 | 55,089 | 754,174 | 33,322 | 720,852 | |||||
(2) Intercompany transactions | 677 | 17 | 694 | 694 | — | |||||
Total | 699,762 | 55,106 | 754,869 | 34,016 | 720,852 | |||||
Ordinary profit | 10,810 | 101 | 10,912 | — | 10,912 | |||||
(Notes)
1. | The segments are classified by the actual business operations of Nipponkoa. |
2. | Major business of each segment is as follows: |
(1) | Non-life insurance: Non-life insurance operation and related investment activities. |
(2) | Life insurance: Life insurance operation and related investment activities. |
3. | Amounts in elimination in transactions with external customers mainly include transfer of underwriting reserves in life insurance operation. |
First three quarters of the fiscal year ending March 31, 2010
(Millions of Yen) | ||||||||||
Non-life insurance | Life insurance | Total | Elimination | Consolidated | ||||||
Operating income | ||||||||||
(1) Transactions with external customers | 648,960 | 55,533 | 704,494 | 32,035 | 672,458 | |||||
(2) Intercompany transactions | 660 | 17 | 678 | 678 | — | |||||
Total | 649,620 | 55,551 | 705,172 | 32,713 | 672,458 | |||||
Ordinary profit | 22,522 | 924 | 23,446 | — | 23,446 | |||||
(Notes)
1. | The segments are classified by the actual business operations of Nipponkoa. |
2. | Major business of each segment is as follows: |
(1) | Non-life insurance: Non-life insurance operation and related investment activities. |
(2) | Life insurance: Life insurance operation and related investment activities. |
3. | Amounts in elimination in transactions with external customers mainly include transfer of underwriting reserves in life insurance operation. |
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[Information related to geographical segments]
First three quarters of the fiscal year ended March 31, 2009:
Information related to geographical segments is not described because domestic sales constitute more than 90% of the aggregate amount of operating income of all segments.
First three quarters of the fiscal year ending March 31, 2010:
Same as the above.
[Overseas sales]
First three quarters of the fiscal year ended March 31, 2009:
Information related to overseas sales is not described because overseas operating income constitutes less than 10% of consolidated operating income.
First three quarters of the fiscal year ending March 31, 2010:
Same as the above.
(6) Note for significant changes in shareholders’ equity
N/A
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6. Referential information
(1) Consolidated Statements of Gains and Losses
(Millions of Yen) | |||||||||||
First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | Difference | Year-on-year rate | ||||||||
(%) | |||||||||||
Ordinary profit or loss | |||||||||||
Underwriting income | 670,437 | 633,608 | (36,828 | ) | (5.5 | ) | |||||
Net premiums written | 506,273 | 489,564 | (16,708 | ) | (3.3 | ) | |||||
Deposit premiums from policyholders | 43,230 | 29,725 | (13,505 | ) | (31.2 | ) | |||||
Life insurance premiums | 47,372 | 48,005 | 633 | 1.3 | |||||||
Underwriting expenses | 564,039 | 534,062 | (29,976 | ) | (5.3 | ) | |||||
Net losses paid | 303,888 | 305,086 | 1,197 | 0.4 | |||||||
Loss adjustment expenses | 26,601 | 26,843 | 241 | 0.9 | |||||||
Commissions and brokerage expenses | 88,777 | 86,594 | (2,183 | ) | (2.5 | ) | |||||
Maturity refunds to policyholders | 134,430 | 105,924 | (28,505 | ) | (21.2 | ) | |||||
Life insurance losses and other payments | 8,173 | 8,943 | 769 | 9.4 | |||||||
Investment income | 48,928 | 38,271 | (10,656 | ) | (21.8 | ) | |||||
Interest and dividends | 47,872 | 41,670 | (6,202 | ) | (13.0 | ) | |||||
Gain on sale of securities | 19,276 | 8,279 | (10,996 | ) | (57.0 | ) | |||||
Investment expenses | 39,158 | 9,769 | (29,388 | ) | (75.1 | ) | |||||
Loss on sales of securities | 7,203 | 2,834 | (4,369 | ) | (60.6 | ) | |||||
Revaluation loss on securities | 21,514 | 2,856 | (18,658 | ) | (86.7 | ) | |||||
Operating and administrative expenses | 105,942 | 104,536 | (1,406 | ) | (1.3 | ) | |||||
Other operating income and expenses | 687 | (64 | ) | (751 | ) | (109.3 | ) | ||||
Ordinary profit | 10,912 | 23,446 | 12,534 | 114.9 | |||||||
Special gains and losses | |||||||||||
Special gains | 16,095 | 398 | (15,697 | ) | (97.5 | ) | |||||
Special losses | 323 | 4,795 | 4,472 | 1,382.9 | |||||||
Special gains and losses | 15,772 | (4,397 | ) | (20,169 | ) | (127.9 | ) | ||||
Income before income taxes and minority interests | 26,684 | 19,049 | (7,635 | ) | (28.6 | ) | |||||
Income taxes | 3,572 | 917 | (2,655 | ) | (74.3 | ) | |||||
Deferred tax adjustment | 3,284 | 4,173 | 889 | 27.1 | |||||||
Total income taxes | 6,857 | 5,090 | (1,766 | ) | (25.8 | ) | |||||
Minority interests | 28 | 18 | (10 | ) | (35.7 | ) | |||||
Net income | 19,798 | 13,939 | (5,858 | ) | (29.6 | ) |
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(2) Premiums written and losses paid by line of business (Consolidated)
i. Direct premiums written (excludes deposit premiums)
Line of business | First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | ||||||||||||
Amounts | Composition | Year-on-year rate | Amounts | Composition | Year-on-year rate | |||||||||
(Millions of Yen) | (%) | (%) | (Millions of Yen) | (%) | (%) | |||||||||
Fire and allied lines | 92,215 | 17.2 | (0.8 | ) | 93,981 | 18.1 | 1.9 | |||||||
Marine | 16,357 | 3.1 | (9.6 | ) | 12,041 | 2.3 | (26.4 | ) | ||||||
Personal accident | 41,227 | 7.7 | (6.0 | ) | 39,051 | 7.5 | (5.3 | ) | ||||||
Voluntary automobile | 252,202 | 47.1 | (1.3 | ) | 248,749 | 48.0 | (1.4 | ) | ||||||
Compulsory automobile liability | 64,289 | 12.0 | (20.4 | ) | 57,851 | 11.2 | (10.0 | ) | ||||||
Other | 69,052 | 12.9 | (0.3 | ) | 66,922 | 12.9 | (3.1 | ) | ||||||
All lines | 535,345 | 100.0 | (4.5 | ) | 518,599 | 100.0 | (3.1 | ) | ||||||
ii. Net premiums written
Line of business | First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | ||||||||||||
Amounts | Composition | Year-on-year rate | Amounts | Composition | Year-on-year rate | |||||||||
(Millions of Yen) | (%) | (%) | (Millions of Yen) | (%) | (%) | |||||||||
Fire and allied lines | 70,798 | 14.0 | (1.0 | ) | 72,329 | 14.8 | 2.2 | |||||||
Marine | 14,497 | 2.9 | (8.7 | ) | 10,841 | 2.2 | (25.2 | ) | ||||||
Personal accident | 41,519 | 8.2 | (6.5 | ) | 39,547 | 8.1 | (4.7 | ) | ||||||
Voluntary automobile | 251,804 | 49.7 | (1.4 | ) | 248,364 | 50.7 | (1.4 | ) | ||||||
Compulsory automobile liability | 63,229 | 12.5 | (18.6 | ) | 55,654 | 11.4 | (12.0 | ) | ||||||
Other | 64,422 | 12.7 | (1.9 | ) | 62,827 | 12.8 | (2.5 | ) | ||||||
All lines | 506,273 | 100.0 | (4.6 | ) | 489,564 | 100.0 | (3.3 | ) | ||||||
iii. Net losses paid
Line of business | First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | ||||||||||||
Amounts | Composition | Year-on-year rate | Amounts | Composition | Year-on-year rate | |||||||||
(Millions of Yen) | (%) | (%) | (Millions of Yen) | (%) | (%) | |||||||||
Fire and allied lines | 29,623 | 9.7 | (13.3 | ) | 32,523 | 10.7 | 9.8 | |||||||
Marine | 5,265 | 1.7 | (17.0 | ) | 6,602 | 2.2 | 25.4 | |||||||
Personal accident | 24,490 | 8.1 | 7.1 | 23,218 | 7.6 | (5.2 | ) | |||||||
Voluntary automobile | 152,676 | 50.2 | (2.6 | ) | 155,559 | 51.0 | 1.9 | |||||||
Compulsory automobile liability | 56,112 | 18.5 | (1.1 | ) | 54,093 | 17.7 | (3.6 | ) | ||||||
Other | 35,721 | 11.8 | (4.5 | ) | 33,089 | 10.8 | (7.4 | ) | ||||||
All lines | 303,888 | 100.0 | (3.3 | ) | 305,086 | 100.0 | 0.4 | |||||||
(Note) The information above indicates the figures before eliminating transactions by segment.
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(3) Investments in securities (Consolidated)
i. Held-to-maturity bonds with fair value
(Millions of Yen) | |||||||
As of December 31, 2009 | |||||||
Value shown on Balance Sheets | Fair value | Difference | |||||
Bonds | 275,915 | 277,000 | 1,084 | ||||
Foreign securities | — | — | — | ||||
Total | 275,915 | 277,000 | 1,084 | ||||
ii. Bonds earmarked for underwriting reserves with fair value | |||||||
(Millions of Yen) | |||||||
As of December 31, 2009 | |||||||
Value shown on Balance Sheets | Fair value | Difference | |||||
Bonds | 7,837 | 7,951 | 113 | ||||
Foreign securities | — | — | — | ||||
Total | 7,837 | 7,951 | 113 | ||||
iii. Other securities (available-for-sale) with fair value | |||||||
(Millions of Yen) | |||||||
As of December 31, 2009 | |||||||
Cost | Value shown on Balance Sheets | Difference | |||||
Bonds | 861,634 | 880,478 | 18,843 | ||||
Stocks | 321,353 | 565,299 | 243,945 | ||||
Foreign securities | 373,614 | 355,739 | (17,875 | ) | |||
Other | 12,082 | 12,585 | 503 | ||||
Total | 1,568,684 | 1,814,102 | 245,417 | ||||
(Notes)
As of December 31, 2009 |
1. | Nipponkoa recognized 2,801 million yen of impairments on other securities with fair value. Nipponkoa recognized impairment on securities whose fair value is determinable as of the balance sheet date if the fair value declined by 30% or more from carrying value. |
2. | Trust beneficiary rights on loan receivables purchased, classified as monetary receivables bought on the Consolidated Balance Sheets, are included in Other. |
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(4) Money in trust (Consolidated)
i. Held-to-maturity money in trust
N/A
ii. Money in trust other than those held for trading purposes or those held to maturity
(Millions of Yen) | ||||||
As of December 31, 2009 | ||||||
Cost | Value shown on Balance Sheets | Difference | ||||
Money in trust | 20,000 | 20,058 | 58 |
(Note)
As of December 31, 2009 |
Other than the above, money in trust held in joint accounts in the amount of 882 million yen are carried at their original cost on the Consolidated Balance Sheets as of December 31, 2009.
(5) Derivative financial instruments (Consolidated)
(Millions of Yen) | ||||||||
As of December 31, 2009 | ||||||||
Contract amount | Fair value | Unrealized gains or losses | ||||||
Interest rate-related instruments | ||||||||
Interest rate swap | 15,000 | 109 | 109 | |||||
Others | ||||||||
Credit derivatives | ||||||||
Short | 7,000 | (50 | ) | (50 | ) | |||
Total | — | — | 58 | |||||
(Note) Derivative trading that has hedge accounting applied is exempt from disclosure.
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(6) Statements of Gains and Losses (Non-consolidated)
(Millions of Yen) | ||||||||||||
First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | Difference | Year-on-year rate | |||||||||
(%) | ||||||||||||
Direct premiums written (includes deposit premiums) | 567,517 | 537,297 | (30,219 | ) | (5.3 | ) | ||||||
Direct premiums written | 524,286 | 507,572 | (16,714 | ) | (3.2 | ) | ||||||
Ordinary profit or loss | ||||||||||||
Underwriting income | 648,490 | 608,294 | (40,196 | ) | (6.2 | ) | ||||||
Net premiums written | 497,880 | 480,629 | (17,250 | ) | (3.5 | ) | ||||||
Deposit premiums from policyholders | 43,230 | 29,725 | (13,505 | ) | (31.2 | ) | ||||||
Reversal of outstanding claims | 2,261 | 2,986 | 724 | 32.0 | ||||||||
Reversal of underwriting reserves | 85,922 | 77,408 | (8,514 | ) | (9.9 | ) | ||||||
Underwriting expenses | 546,063 | 514,789 | (31,274 | ) | (5.7 | ) | ||||||
Net losses paid | 299,607 | 300,424 | 816 | 0.3 | ||||||||
Loss adjustment expenses | 25,997 | 26,440 | 443 | 1.7 | ||||||||
Commissions and brokerage expenses | 84,249 | 81,706 | (2,542 | ) | (3.0 | ) | ||||||
Maturity refunds to policyholders | 134,430 | 105,924 | (28,505 | ) | (21.2 | ) | ||||||
Investment income | 41,834 | 31,660 | (10,173 | ) | (24.3 | ) | ||||||
Interest and dividends | 42,326 | 35,617 | (6,708 | ) | (15.8 | ) | ||||||
Gain on sale of securities | 18,236 | 8,205 | (10,030 | ) | (55.0 | ) | ||||||
Income for derivative financial instruments | — | 3,167 | 3,167 | — | ||||||||
Investment expenses | 41,171 | 9,864 | (31,306 | ) | (76.0 | ) | ||||||
Loss on sales of securities | 7,197 | 2,831 | (4,366 | ) | (60.7 | ) | ||||||
Revaluation loss on securities | 21,474 | 2,846 | (18,628 | ) | (86.7 | ) | ||||||
Expense for derivative financial instruments | 4,420 | — | (4,420 | ) | (100.0 | ) | ||||||
Provision for reserve for investment loss | 2,063 | 119 | (1,944 | ) | (94.2 | ) | ||||||
Operating and administrative expenses | 93,837 | 93,518 | (319 | ) | (0.3 | ) | ||||||
Operating and administrative expenses on underwriting | 89,290 | 88,878 | (411 | ) | (0.5 | ) | ||||||
Other operating income and expenses | 1,171 | 441 | (730 | ) | (62.3 | ) | ||||||
Ordinary profit | 10,424 | 22,223 | 11,799 | 113.2 | ||||||||
Underwriting profit | 12,561 | 3,123 | (9,437 | ) | (75.1 | ) | ||||||
Special gains and losses | ||||||||||||
Special gains | 16,152 | 398 | (15,754 | ) | (97.5 | ) | ||||||
Special losses | 309 | 4,721 | 4,411 | 1,424.6 | ||||||||
Special gains and losses | 15,843 | (4,322 | ) | (20,165 | ) | (127.3 | ) | |||||
Income before income taxes and minority interests | 26,267 | 17,900 | (8,366 | ) | (31.9 | ) | ||||||
Income taxes | 2,617 | 377 | (2,239 | ) | (85.6 | ) | ||||||
Deferred tax adjustment | 4,136 | 4,288 | 152 | 3.7 | ||||||||
Total income taxes | 6,754 | 4,666 | (2,087 | ) | (30.9 | ) | ||||||
Net income | 19,512 | 13,234 | (6,278 | ) | (32.2 | ) | ||||||
Ratios | ||||||||||||
Loss ratio | 65.4 | % | 68.0 | % | 2.6 | % | ||||||
Expense ratio | 34.9 | % | 35.5 | % | 0.6 | % | ||||||
(Notes)
(1) | Underwriting profit = Underwriting income – (Underwriting expenses + Operating and administrative expenses on underwriting) ± Other income and expenses. |
Other income and expenses include income taxes on Compulsory automobile liability insurance. |
(2) | Loss ratio = (Net losses paid + Loss adjustment expenses) / Net premiums written x 100 |
(3) | Expense ratio = (Net commissions and brokerage expenses + Operating and administrative expenses on underwriting) / Net premiums written x 100 |
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(7) Premiums written and losses paid by line of business (Non-consolidated)
i. Direct premiums written (excludes deposit premiums)
Line of business | First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | ||||||||||||
Amounts | Composition | Year-on-year rate | Amounts | Composition | Year-on-year rate | |||||||||
(Millions of Yen) | (%) | (%) | (Millions of Yen) | (%) | (%) | |||||||||
Fire and allied lines | 90,761 | 17.3 | (0.7 | ) | 92,746 | 18.3 | 2.2 | |||||||
Marine | 14,084 | 2.7 | (8.4 | ) | 10,394 | 2.0 | (26.2 | ) | ||||||
Personal accident | 41,131 | 7.8 | (6.0 | ) | 38,965 | 7.7 | (5.3 | ) | ||||||
Voluntary automobile | 245,722 | 46.9 | (1.7 | ) | 241,312 | 47.5 | (1.8 | ) | ||||||
Compulsory automobile liability | 64,289 | 12.3 | (20.4 | ) | 57,851 | 11.4 | (10.0 | ) | ||||||
Other | 68,297 | 13.0 | (0.3 | ) | 66,301 | 13.1 | (2.9 | ) | ||||||
All lines | 524,286 | 100.0 | (4.6 | ) | 507,572 | 100.0 | (3.2 | ) | ||||||
ii. Net premiums written
Line of business | First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | ||||||||||||
Amounts | Composition | Year-on-year rate | Amounts | Composition | Year-on-year rate | |||||||||
(Millions of Yen) | (%) | (%) | (Millions of Yen) | (%) | (%) | |||||||||
Fire and allied lines | 70,555 | 14.2 | (1.2 | ) | 72,065 | 15.0 | 2.1 | |||||||
Marine | 13,221 | 2.7 | (8.3 | ) | 9,975 | 2.1 | (24.6 | ) | ||||||
Personal accident | 41,457 | 8.3 | (6.6 | ) | 39,490 | 8.2 | (4.7 | ) | ||||||
Voluntary automobile | 245,392 | 49.2 | (1.8 | ) | 240,997 | 50.1 | (1.8 | ) | ||||||
Compulsory automobile liability | 63,104 | 12.7 | (18.6 | ) | 55,530 | 11.6 | (12.0 | ) | ||||||
Other | 64,148 | 12.9 | (2.0 | ) | 62,569 | 13.0 | (2.5 | ) | ||||||
All lines | 497,880 | 100.0 | (4.8 | ) | 480,629 | 100.0 | (3.5 | ) | ||||||
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iii. Net losses paid
Line of business | First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | ||||||||||||
Amounts | Year-on-year rate | Loss ratio | Amounts | Year-on-year rate | Loss ratio | |||||||||
(Millions of Yen) | (%) | (%) | (Millions of Yen) | (%) | (%) | |||||||||
Fire and allied lines | 29,681 | (12.7 | ) | 45.6 | 32,511 | 9.5 | 48.9 | |||||||
Marine | 4,886 | (16.2 | ) | 38.1 | 6,172 | 26.3 | 64.2 | |||||||
Personal accident | 24,462 | 7.2 | 64.4 | 23,184 | (5.2 | ) | 64.2 | |||||||
Voluntary automobile | 149,027 | (2.9 | ) | 66.5 | 151,652 | 1.8 | 69.0 | |||||||
Compulsory automobile liability | 55,984 | (1.1 | ) | 93.7 | 53,956 | (3.6 | ) | 102.7 | ||||||
Other | 35,564 | (4.5 | ) | 61.4 | 32,947 | (7.4 | ) | 58.4 | ||||||
All lines | 299,607 | (3.3 | ) | 65.4 | 300,424 | 0.3 | 68.0 | |||||||
(Note) Loss adjustment expenses are included in Net losses paid to calculate Loss ratio.
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(Reference) Solvency margin ratio (Non-consolidated)
(Millions of Yen) | ||||||
As of December 31, 2009 | As of March 31, 2009 | |||||
(A) Total amount of solvency margin | 840,473 | 737,341 | ||||
Capital or foundation funds etc. | 255,853 | 242,517 | ||||
Reserve for price fluctuations | 4,504 | 2,581 | ||||
Contingency reserve | 13 | 13 | ||||
Catastrophe reserve | 279,429 | 278,051 | ||||
Reserve for doubtful accounts (general) | 308 | 79 | ||||
Unrealized gain or loss on available-for-sale securities (before tax effect deduction) | 210,604 | 131,328 | ||||
Unrealized gain or loss on Land | 20,301 | 21,105 | ||||
Excess refund reserve | — | — | ||||
Subordinated debts | — | — | ||||
Deduction items | 13,453 | 13,573 | ||||
Other items | 82,912 | 75,238 | ||||
(B) Total amount of risks | ||||||
| 217,228 | 207,144 | ||||
Ordinary insurance risks(R1) | 41,498 | 41,627 | ||||
Third-sector insurance risks(R2) | 1 | 1 | ||||
Assumed interest rate risks(R3) | 3,196 | 3,234 | ||||
Asset management risks(R4) | 82,261 | 76,827 | ||||
Business management risks(R5) | 4,885 | 4,678 | ||||
Major catastrophe risks(R6) | 117,340 | 112,227 | ||||
(C) Solvency margin ratio | ||||||
[(A) /{(B) x 1/2}] x 100 | 773.8 | % | 711.9 | % |
(Notes) The amounts and figures indicated above are calculated in accordance with Articles 86 and 87 of the Enforcement Regulations of the Insurance Business Law and with Ministry of Finance Notification No.50 of 1996.
However, calculation of Major catastrophe risks for the third quarter-end is partly simplified by using figures calculated at the previous quarter-end.
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<Solvency margin ratio>
• | While non-life insurance companies accumulate policy reserves to prepare for the payment of insurance for actual losses incurred and maturity refund of savings-type insurance policies etc., sufficient solvency should be maintained in the event the company is exposed to an extraordinary risk that cannot be predicted because of the occurrence of a major disaster, a widespread decline in prices with regard to assets which the non-life insurance companies own, etc. |
• | Solvency margin ratio ((C) in the above table) is an index calculated under the Insurance Business Law etc. that indicates the ratio of the “solvency margin of a non-life insurance company by means of its capital, reserves, etc.” ((A) in the above table) to “risks which will exceed usual estimates” ((B) in above table). |
• | The “risks that exceed usual estimates” is the total of each of the following risk types. |
i. Underwriting Risk (Ordinary Insurance Risks, Third-sector Insurance Risks):
Risks of the payment of insurance claims in excess of usual estimates. (excluding major catastrophe risk)
ii. Risk of assumed interest rate (Assumed Interest Risks):
Risks that may arise as a result of an actual return on investment that is lower than the assumed interest rate at the time the insurance premium is calculated.
iii. Asset Management Risks:
Risks of retained securities and other assets fluctuating in prices in excess of usual estimates, etc.
iv. Business Management Risks:
Risks other than i. through iii. above and v. that may arise in the business operations in excess of usual estimates.
v. Major Catastrophe Risks:
Risks of the occurrence of major catastrophes as a result of major disasters (such as the Great Kanto earthquake, the Ise Bay Typhoon or equivalent) in excess of usual estimates.
• | The “solvency margin of a non-life insurance company by means of its capital, reserves, etc.” (Total amount of solvency margin) is the amount of a non-life insurance company’s net assets, reserves (such as reserve for price fluctuations, catastrophe reserve and others), unrealized gain or loss on land etc. |
• | The solvency margin ratio is one of the indices that regulatory authorities use to determine the soundness of an insurance company. It is generally held that insurance company is “adequate in terms of solvency to meet insurance payments” if the ratio is 200% or more. |
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(Reference)
Investments on securitized paper and on subprime loan equivalents (As of December 31, 2009)
Investment conditions of NIPPONKOA Insurance Co., Ltd. (hereinafter “the Company”) on securitized paper, as of December 31, 2009, are as follows.
In addition, consolidated subsidiaries do not hold any of these investments.
1. CDO (Collateralized Debt Obligation)
(Billions of Yen) | ||||||||||||||
As of December 31, 2009 | (Reference) As of March 31, 2009 | |||||||||||||
Fair value | Unrealized gains or losses | Impairment losses | Fair value | Unrealized gains or losses | Impairment losses | |||||||||
CDO | 9.7 | 0.4 | — | 8.2 | (0.2 | ) | (6.5 | ) | ||||||
Rated | 6.7 | — | — | 6.4 | (0.2 | ) | (3.6 | ) | ||||||
Non-rated | 2.9 | 0.4 | — | 1.8 | — | (2.9 | ) |
(Notes)
(1) | The Company recognized impairment on securities whose fair value is determinable as of the balance sheet date if the fair value declined by 30% or more from carrying value. Also applied to the table below. |
(2) | Categorizations of the rated CDO are 13% of AAA, 14% of AA, 62% of A, and 11% of BBB. |
(3) | All collaterals for CDO are assets supported by corporate. |
(4) | Categorizations of the CDO by regions are domestic with 79% and foreign with 21%. |
(5) | The ratios of categorizations of the rated CDO and categorizations of the CDO by regions are calculated by using fair value. |
(6) | Values in impairment losses are disposed as Revaluation loss on securities or as Expense for derivative financial instruments. |
(7) | Other than the figures in the table above, related to CDO, the Company recorded 4.0 billion yen of Income for derivative financial instruments. |
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2. CMBS (Commercial Mortgage-Backed Security)
(Billions of Yen) | |||||||||||||||
As of December 31, 2009 | (Reference) As of March 31, 2009 | ||||||||||||||
Fair value | Unrealized gains or losses | Impairment losses | Fair value | Unrealized gains or losses | Impairment losses | ||||||||||
CMBS | 10.1 | (0.3 | ) | (0.1 | ) | 13.1 | (0.4 | ) | — | ||||||
Domestic | 10.1 | (0.3 | ) | (0.1 | ) | 13.1 | (0.4 | ) | — | ||||||
Foreign | — | — | — | — | — | — |
(Note)
Values in impairment losses are disposed as Revaluation loss on securities or as other investment expenses.
3. CDS (Credit Default Swap)
The Company does not hold CDS that is referred to securitized paper, such as CDO. The Company holds CDS that is referred to a single credit of a firm. (7.0 billion yen of short commitment notional value, -0.0 billion yen of fair value, -0.0 billion yen of valuation loss)
4. Other equivalent investments
The Company does not hold any of SPEs, leveraged finance, financial assurance, receivables and securitized paper guaranteed by Monoline insurer, or other subprime Alt-A exposure.
5. Subprime loan equivalent investment of the above four investments
The Company does not hold subprime loan equivalent investments.
[Terms of each securitized papers]
• | CDO: Collateralized Debt Obligation. A securitized security, which was supported as an asset, by asset pool of number of debt securities and loans. Also, non-rated CDO held by the Company are indicated as equity of CLO (Collateralized Loan Obligation. A securitized security, which was supported as an asset, by number of loans). |
• | CMBS: Commercial Mortgage-Backed Security. An instrument that securitized loans of commercial real estate. |
• | CDS: Credit Default Swap. A swap contract involving transaction of credit, which refers to a firm or securitized papers. |
• | SPEs: Special Purpose Entities. A general term of special purpose entities that are specialized in investment of securitized papers such as SIV (Structured Investment Vehicle) |
• | Monoline insurer: An insurer specialized in financial assurance (assurance of debt securities and securitized papers). |
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Note Regarding Forward-looking Statements
This document includes “forward-looking statements” that reflect the information in relation to the NIPPONKOA Insurance Group (“Nipponkoa”). To the extent that statements in this document do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of Nipponkoa in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause the actual results, performance, achievements or financial position of Nipponkoa to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements after the date of this document. Investors are advised to consult any further disclosures by Nipponkoa in their subsequent domestic filings in Japan and filings with, or submissions to, the U.S. Securities Exchange Commission pursuant to the U.S. Securities Exchange Act of 1934.
The risks, uncertainties and other factors referred to above include, but are not limited to, those below. The risks, uncertainties and other factors are also referred to in our domestic Annual Securities Reports and Quarterly Securities Reports.
(1) | State of the Japanese economy |
(2) | Intensified competition in the non-life insurance industry |
(3) | Downgrading of financial rating |
(4) | Risk accompanying changes in relevant laws, regulations, accounting systems, etc. |
(5) | Natural disasters |
(6) | Risk of damages in excesses of normal predictions for insurance underwriting |
(7) | Reinsurance risk |
(8) | Overseas operations |
(9) | Life insurance and other businesses |
(10) | Risk of stock price volatility |
(11) | Interest rate risk |
(12) | Liquidity risk |
(13) | Credit risk |
(14) | Risk associated with exchange rate fluctuations |
(15) | Retirement benefit liabilities |
(16) | Legal risk |
(17) | Major disaster risk |
(18) | Leaks of customer-related data |
(19) | Business integration-related risk factors |
(20) | Other risks |
Table of Contents
Quarterly Securities Report for the Three Months Ended December 31, 2010
Part 1: Corporate Information
Section 1: Information on the company
1. | Trends in major business indexes |
2. | Business overview |
3. | Subsidiaries and affiliates |
4. | Employees |
Section 2: Business Conditions
1. | Insurance operation |
2. | Business risks |
3. | Significant contracts on management |
4. | Financial positions, results of operations, and cash flows |
Section 3: Information on the facilities
Section 4: Information of the reporting company
1. | Information on shares |
2. | Changes in stock prices |
3. | Directors |
Section 5: Status of accounting
1. | Consolidated Financial Statements |
2. | Others |
Part 2: Information on party(ies) providing guaranty to the Reporting Company
Table of Contents
Part 1: Corporate Information
Section 1: Information on the company
1. Trends in major business indexes
(Omitted.)
2. Business overview
(Omitted.)
3. Subsidiaries and affiliates
(Omitted.)
4. Employees
(Omitted.)
Section 2: Business Conditions
1. Insurance operation
(Omitted.)
2. Business risks
During the three months ended December 31, 2009 (fiscal third quarter), there arose no new material business risks for the consolidated group. Material changes (shown below) were made to the information on business risks that appeared in the Annual Business Report for the fiscal year ended March 31, 2009.
Statements about the future below speak as of the submission date (February 12, 2010) of the Company’s Quarterly Business Report for the fiscal third quarter.
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(19) Business Integration Risk
The Company and Sompo Japan Insurance Inc. (Sompo Japan) entered into an agreement to establish a joint holding company via a share exchange and integrate their businesses. On October 30, 2009, both companies’ Boards of Directors passed resolutions approving the Share Exchange Plan and the Business Integration Agreement (“Final Agreement”), and subsequently entered into the Final Agreement.
Sompo Japan received the shareholders’ approval for the Share Exchange Plan at an extraordinary shareholder meeting held on December 22, 2009. The Company received shareholders’ approval for the Share Exchange Plan at an extraordinary shareholder meeting held on December 30, 2009. Subject to regulatory approval(s), the business integration is scheduled to be effected on April 1, 2010.
Both companies are currently preparing for the business integration. The business integration may involve risks including the following risks, which may materially and adversely affect the Company’s business operations, operating performance, and financial condition.
• | The risk that any or all necessary regulatory approval or permission cannot be obtained at all or in a timely manner. |
• | The risk that the details of the business integration set forth in the Final Agreement are changed for any reason. |
• | The risk that the business integration does not proceed as planned due to factors such as financial market turmoil and deterioration in global economic conditions. |
• | The risk that the expected synergies of the business integration are not achieved. |
[Additional information arose that is relevant to “(20) Other Risks” in the section on business risks in the Annual Business Report for the fiscal year ended March 31, 2009.] [Note to NK: Please consider deleting this bracketed sentence unless it is required by Japanese law. This may make it seem as if NK owes a duty to update past its disclosure.] The Company received a business improvement order from the Financial Services Agency dated October 23, 2009, due to the revelations of instances of delayed claims payments resulting from inadequate and improper handling of claims.
3. Significant contracts on management
(Omitted.)
4. Financial positions, results of operations, and cash flows
(Omitted.)
Section 3: Information on the facilities
(Omitted.)
Section 4: Information of the reporting company
1. Information on shares
(Omitted.)
2. Changes in stock prices
(Omitted.)
Table of Contents
3. Directors
(Omitted.)
Section 5. Status of accounting
i. Basis of presenting Consolidated Financial Statements
NIPPONKOA Insurance Co., Ltd. and its subsidiaries (hereinafter Nipponkoa) prepared Quarterly Consolidated Financial Statements compliant with Regulation for Terminology, Forms and Preparation of Quarterly Consolidated Financial Statements (Cabinet Office Ordinance No. 64, 2007, hereinafter “Regulation of Quarterly Consolidated Financial Statements”) and Ordinance for Enforcement of Insurance Business Law (the Ministry of Finance Ordinance No. 5, 1996). Compliance with Ordinance for Enforcement of Insurance Business Law is pursuant to Article 61 and Article 82 of Regulation of Quarterly Consolidated Financial Statements.
Also, Nipponkoa prepared Quarterly Consolidated Financial Statements for the first three quarters of the fiscal year ended March 31, 2009 compliant with Regulations of Quarterly Consolidated Financial Statements and Ordinance for Enforcement of Insurance Business Law, both before a revision, and prepared Quarterly Consolidated Financial Statements for the 3rd quarter of the year ending March 31, 2010 and for the first three quarters of the fiscal year ending March 31, 2010 compliant with Regulations of Quarterly Consolidated Financial Statements and Ordinance for Enforcement of Insurance Business Law, both after the revision.
ii. Information about income
Since Nipponkoa is classified as a specified business company, a company defined under Article 17-15(2) of the Cabinet Office Ordinance on Disclosure of Corporate Information, etc., information about income for the 3rd quarter of the fiscal years are indicated in 2. Others.
iii. Report of independent auditors
Under Article 193-2(1) of the Financial Instruments and Exchange Act, Consolidated Financial Statements for the 3rd quarter of the fiscal year ending March 31, 2010 and Consolidated Financial Statements for the first three quarters of the fiscal year ended March 31, 2009 and ending March 31, 2010 were reviewed by PricewaterhouseCoopers Aarata as independent auditors.
Table of Contents
1. Consolidated Financial Statements
(1) Consolidated Balance Sheets
(Millions of Yen) | ||||||||||
As of December 31, 2009 | As of March 31, 2009 | |||||||||
Assets | ||||||||||
Cash and bank deposits | 91,828 | 113,074 | ||||||||
Call loans | 28,528 | 16,043 | ||||||||
Receivables under resale agreements | 16,996 | 29,996 | ||||||||
Receivables under securities borrowing transactions | 24,403 | 32,127 | ||||||||
Monetary receivables bought | 6,631 | 41,300 | ||||||||
Money in trust | 77,095 | 74,843 | ||||||||
Investments in securities | 2,177,044 | 2,134,547 | ||||||||
Loans | 243,697 | 242,215 | ||||||||
Tangible fixed assets | *1 | 131,671 | *1 | 129,928 | ||||||
Intangible fixed assets | 1,183 | 1,146 | ||||||||
Other assets | 176,947 | 167,746 | ||||||||
Deferred tax assets | 73,688 | 108,748 | ||||||||
Reserve for doubtful accounts | (2,413 | ) | (2,195 | ) | ||||||
Total assets | 3,047,301 | 3,089,523 | ||||||||
Liabilities | ||||||||||
Underwriting fund | 2,508,722 | 2,557,377 | ||||||||
Outstanding claims | 286,995 | 290,239 | ||||||||
Underwriting reserves | 2,221,726 | 2,267,137 | ||||||||
Other liabilities | 96,378 | 155,289 | ||||||||
Reserve for retirement benefits | 23,807 | 22,007 | ||||||||
Reserve for bonuses | 1,517 | 6,127 | ||||||||
Reserve for bonuses to directors | — | 11 | ||||||||
Statutory reserves | 5,045 | 3,060 | ||||||||
Reserve for price fluctuations | 5,045 | 3,060 | ||||||||
Deferred tax liabilities | 33 | 37 | ||||||||
Negative goodwill | — | 146 | ||||||||
Total liabilities | 2,635,504 | 2,744,056 | ||||||||
Net assets | ||||||||||
Shareholders’ equity | ||||||||||
Common stock | 91,249 | 91,249 | ||||||||
Capital surplus | 46,702 | 46,702 | ||||||||
Retained earnings | 177,739 | 169,993 | ||||||||
Treasury stock | (58,089 | ) | (58,122 | ) | ||||||
Total shareholders’ equity | 257,601 | 249,822 | ||||||||
Valuation and translation adjustments | ||||||||||
Net unrealized gains on available-for-sale securities | 156,844 | 97,349 | ||||||||
Net deferred gains (losses) on hedge accounting | 2,294 | 3,700 | ||||||||
Foreign currency translation adjustment | (5,879 | ) | (6,198 | ) | ||||||
Total valuation and translation adjustments | 153,259 | 94,851 | ||||||||
Subscription rights to shares | 594 | 458 | ||||||||
Minority interests | 342 | 334 | ||||||||
Total net assets | 411,797 | 345,467 | ||||||||
Total liabilities and net assets | 3,047,301 | 3,089,523 | ||||||||
Table of Contents
(2) Consolidated Statements of Income
(Millions of Yen) | ||||||||||
First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | |||||||||
Operating income | 720,852 | 672,458 | ||||||||
Underwriting income | 670,437 | 633,608 | ||||||||
Net premiums written | 506,273 | 489,564 | ||||||||
Deposit premiums from policyholders | 43,230 | 29,725 | ||||||||
Investment income on deposit premiums | 19,186 | 17,292 | ||||||||
Life insurance premiums | 47,372 | 48,005 | ||||||||
Reversal of outstanding claims | 1,765 | 3,378 | ||||||||
Reversal of underwriting reserves | 51,677 | 44,617 | ||||||||
Investment income | 48,928 | 38,271 | ||||||||
Interest and dividends | 47,872 | 41,670 | ||||||||
Investment income from money in trust | 690 | 2,230 | ||||||||
Gain on sale of securities | 19,276 | 8,279 | ||||||||
Transfer of investment income on deposit premiums | (19,186 | ) | (17,292 | ) | ||||||
Other operating income | 1,486 | 578 | ||||||||
Operating expenses | 709,940 | 649,011 | ||||||||
Underwriting expenses | 564,039 | 534,062 | ||||||||
Net losses paid | 303,888 | 305,086 | ||||||||
Loss adjustment expenses | *1 | 26,601 | *1 | 26,843 | ||||||
Commissions and brokerage expenses | *1 | 88,777 | *1 | 86,594 | ||||||
Maturity refunds to policyholders | 134,430 | 105,924 | ||||||||
Life insurance losses and other payments | 8,173 | 8,943 | ||||||||
Investment expenses | 39,158 | 9,769 | ||||||||
Investment loss from money in trust | 3,879 | 196 | ||||||||
Loss on sales of securities | 7,203 | 2,834 | ||||||||
Revaluation loss on securities | 21,514 | 2,856 | ||||||||
Operating and administrative expenses | *1 | 105,942 | *1 | 104,536 | ||||||
Other operating expenses | 799 | 642 | ||||||||
Interest paid | 164 | 69 | ||||||||
Ordinary profit | 10,912 | 23,446 | ||||||||
Special gains | 16,095 | 398 | ||||||||
Reversal of statutory reserves | 15,912 | — | ||||||||
Reversal of reserve for price fluctuations | 15,912 | — | ||||||||
Other | �� | 183 | *2 | 398 | ||||||
Special losses | 323 | 4,795 | ||||||||
Provision for statutory reserves | — | 1,985 | ||||||||
Provision for reserve for price fluctuations | — | 1,985 | ||||||||
Other | *3 | 323 | *3 | 2,810 | ||||||
Income before income taxes and minority interests | 26,684 | 19,049 | ||||||||
Income taxes | 3,572 | 917 | ||||||||
Deferred tax adjustment | 3,284 | 4,173 | ||||||||
Total income taxes | 5,090 | |||||||||
Minority interests | 28 | 18 | ||||||||
Net income | 19,798 | 13,939 | ||||||||
Table of Contents
(3) Consolidated Statements of Cash Flows
(Millions of Yen) | ||||||||||
First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | |||||||||
Cash flows from operating activities: | ||||||||||
Income (loss) before income taxes and minority interests | 26,684 | 19,049 | ||||||||
Depreciation | 5,193 | 5,247 | ||||||||
Impairment losses | 134 | 68 | ||||||||
Amortization of goodwill | (219 | ) | (146 | ) | ||||||
Increase (decrease) in reserve for outstanding claims | (1,796 | ) | (3,383 | ) | ||||||
Increase (decrease) in underwriting reserves | (52,483 | ) | (45,432 | ) | ||||||
Increase (decrease) in reserve for doubtful accounts | (357 | ) | 213 | |||||||
Increase (decrease) in reserve for retirement benefits | (20,975 | ) | 1,799 | |||||||
Increase (decrease) in reserve for bonuses | (4,619 | ) | (4,609 | ) | ||||||
Increase (decrease) in reserve for bonuses to directors | (8 | ) | (11 | ) | ||||||
Increase (decrease) in reserve for price fluctuations | (15,912 | ) | 1,985 | |||||||
Interest and dividend income | (47,872 | ) | (41,670 | ) | ||||||
Net loss (gain) on investments in securities | 12,181 | (4,127 | ) | |||||||
Interest charges | 164 | 69 | ||||||||
Net loss (gain) on foreign exchange | 1,156 | 82 | ||||||||
Net loss (gain) on sales of tangible fixed assets | 5 | (66 | ) | |||||||
Net loss (gain) on loans | 37 | — | ||||||||
Net loss (gain) on money in trust | 3,785 | (1,492 | ) | |||||||
Decrease (increase) in other current assets | (1,356 | ) | (5,917 | ) | ||||||
Increase (decrease) in other current liabilities | (541 | ) | (6,092 | ) | ||||||
Other, net | 7,196 | (10,936 | ) | |||||||
Sub-total | (89,603 | ) | (95,369 | ) | ||||||
Interest and dividend received | 48,400 | 40,792 | ||||||||
Interest paid | (133 | ) | (140 | ) | ||||||
Income taxes paid | (7,971 | ) | (6,008 | ) | ||||||
Net cash provided by (used in) operating activities (a) | (49,308 | ) | (60,726 | ) | ||||||
Table of Contents
(Millions of Yen) | ||||||||||
First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | |||||||||
Cash flows from investing activities: | ||||||||||
Net decrease (increase) in short-term investments | (1,934 | ) | 1,505 | |||||||
Purchases of monetary receivables bought | (990 | ) | — | |||||||
Proceeds from sales or maturity of monetary receivables bought | 6,362 | 3,628 | ||||||||
Increase in money in trust | (13,400 | ) | (17,000 | ) | ||||||
Decrease in money in trust | 12,040 | 17,002 | ||||||||
Purchases of investments in securities | (579,415 | ) | (202,128 | ) | ||||||
Proceeds from sales or maturity of investments in securities | 618,362 | 257,744 | ||||||||
Loans made | (60,840 | ) | (41,532 | ) | ||||||
Collection of loans | 42,835 | 40,049 | ||||||||
Increase (decrease) in cash received under securities lending transactions | 55,234 | (33,705 | ) | |||||||
Sub-total (b) | 78,253 | 25,564 | ||||||||
(a)+(b) | 28,944 | (35,161 | ) | |||||||
Acquisition of tangible fixed assets | (2,930 | ) | (7,511 | ) | ||||||
Proceeds from sales of tangible fixed assets | 496 | 606 | ||||||||
Acquisition of shares in a subsidiary that accompany changes in the scope of consolidation | — | (20 | ) | |||||||
Other, net | (48 | ) | (53 | ) | ||||||
Net cash provided by (used in) investing activities | 75,771 | 18,585 | ||||||||
Cash flows from financing activities: | ||||||||||
Treasury stock acquired | (6,766 | ) | (123 | ) | ||||||
Sales of treasury stock | 88 | 89 | ||||||||
Dividends paid | (5,716 | ) | (6,019 | ) | ||||||
Dividends paid to minority interests | (12 | ) | (8 | ) | ||||||
Other, net | (262 | ) | (8 | ) | ||||||
Net cash provided by (used in) financing activities | (12,670 | ) | (6,069 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | (1,274 | ) | 18 | |||||||
Net increase (decrease) in cash and cash equivalents | 12,517 | (48,192 | ) | |||||||
Cash and cash equivalents at beginning of year | 140,825 | 168,525 | ||||||||
Cash and cash equivalents at the end of the 3rd quarter | *1 | 153,342 | *1 | 120,333 | ||||||
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[Changes in preparation of Consolidated Financial Statements]
First three quarters of the fiscal year ending March 31, 2010 | ||||||
Information on changes in the scope of consolidation | (1) Changes in the scope of consolidation | |||||
(2) Number of consolidated subsidiaries after the change: 7 | ||||||
[Notes] | ||||||
<Items on the Consolidated Balance Sheets> | ||||||
As of December 31, 2009 | As of March 31, 2009 | |||||
*1. �� Accumulated depreciation of tangible fixed assets was 142,419 million yen. | *1. Accumulated depreciation of tangible fixed assets was 139,037 million yen. | |||||
<Items on the Consolidated Statements of Income> | ||||||
First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | |||||
*1. Details of business expenses are as follows: | *1. Details of business expenses are as follows: | |||||
(Millions of Yen) |
(Millions of Yen) | |||||
Commissions and brokerage expenses | 90,373 | Commissions and brokerage expenses | 87,956 | |||
Salary | 55,019 | Salary | 55,073 | |||
Business expenses are the sum of Loss adjustment expenses, Operating and administrative expenses and Commissions and brokerage expenses in Consolidated Statements of Income. |
Business expenses are the sum of Loss adjustment expenses, Operating and administrative expenses and Commissions and brokerage expenses in Consolidated Statements of Income. | |||||
*2. Other of Special gains is a gain on sales of fixed assets. | ||||||
*3. 189 million yen of loss on sales of fixed assets and 134 million yen of impairment losses are included in Other of Special losses. |
*3. 2,407 million yen of cost on business integration is included in Other of Special losses. |
Table of Contents
<Items on the Consolidated Statements of Cash Flows>
First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | |||||||
*1. Cash and cash equivalents as of December 31, 2008 consist of the following: |
| *1. Cash and cash equivalents as of December 31, 2009 consist of the following: |
| |||||
(Millions of Yen) | (Millions of Yen) | |||||||
Cash and bank deposits | 91,024 | Cash and bank deposits | 91,828 | |||||
Call loans | 31,208 | Call loans | 28,528 | |||||
Receivables under resale agreements | 48,980 | Receivables under resale agreements | 16,996 | |||||
Monetary receivables bought | 17,356 | Monetary receivables bought | 6,631 | |||||
Investments in securities | 2,254,859 | Investments in securities | 2,177,044 | |||||
Bank deposits with original maturity longer than 3 months | (24,869 | ) | Bank deposits with original maturity longer than 3 months | (22,219 | ) | |||
Monetary receivables bought other than cash equivalents | (12,357 | ) | Monetary receivables bought other than cash equivalents | (6,631 | ) | |||
Securities other than cash equivalents | (2,252,859 | ) | Securities other than cash equivalents | (2,171,844 | ) | |||
Cash and cash equivalents | 153,342 | Cash and cash equivalents | 120,333 | |||||
*2. Cash flows of asset management related to insurance operations are included in cash flows from investing activities. |
|
*2. Same as the left. |
|
Table of Contents
<Summary of shareholders’ equity>
Shareholders’ equity as of December 31, 2009 and the first three quarters of the fiscal year ending March 31, 2010
1. | Type and total number of shares issued by Nipponkoa |
Common stock: 816,743 thousand shares |
2. | Type and total number of treasury stock |
Common stock: 64,398 thousand shares |
3. | Outstanding balance of subscription rights to shares as of December 31, 2009 |
Subscription rights to shares as stock options: 594 million yen |
(Filing company (parent company) 594 million yen) |
4. | Items related to dividends |
Paid amount of dividends |
Resolutions | Type of shares | Aggregate amount | Dividend per share | Record date | Effective date | Source of dividends | ||||||
Ordinary general meeting of shareholders (June 25, 2009) | Common stock | 6,019 million yen | 8 yen | March 31, 2009 | June 26, 2009 | Retained earnings |
Table of Contents
<Segment Information>
[Information by types of business segment]
First three quarters of the fiscal year ended March 31, 2009
(Millions of Yen) | ||||||||||
Non-life insurance | Life insurance | Total | Elimination | Consolidated | ||||||
Operating income | ||||||||||
(1) Transactions with external customers | 699,085 | 55,089 | 754,174 | 33,322 | 720,852 | |||||
(2) Intercompany transactions | 677 | 17 | 694 | 694 | — | |||||
Total | 699,762 | 55,106 | 754,869 | 34,016 | 720,852 | |||||
Ordinary profit | 10,810 | 101 | 10,912 | — | 10,912 | |||||
(Notes)
1. | The segments are classified by the actual business operations of Nipponkoa. |
2. | Major business of each segment is as follows: |
(1) | Non-life insurance: Non-life insurance operation and related investment activities. |
(2) | Life insurance: Life insurance operation and related investment activities. |
3. | Amounts in elimination in transactions with external customers mainly include transfer of underwriting reserves in life insurance operation. |
First three quarters of the fiscal year ending March 31, 2010
(Millions of Yen) | ||||||||||
Non-life insurance | Life insurance | Total | Elimination | Consolidated | ||||||
Operating income | ||||||||||
(1) Transactions with external customers | 648,960 | 55,533 | 704,494 | 32,035 | 672,458 | |||||
(2) Intercompany transactions | 660 | 17 | 678 | 678 | — | |||||
Total | 649,620 | 55,551 | 705,172 | 32,713 | 672,458 | |||||
Ordinary profit | 22,522 | 924 | 23,446 | — | 23,446 | |||||
(Notes)
1. | The segments are classified by the actual business operations of Nipponkoa. |
2. | Major business of each segment is as follows: |
(1) | Non-life insurance: Non-life insurance operation and related investment activities. |
(2) | Life insurance: Life insurance operation and related investment activities. |
3. | Amounts in elimination in transactions with external customers mainly include transfer of underwriting reserves in life insurance operation. |
Table of Contents
[Information related to geographical segments]
First three quarters of the fiscal year ended March 31, 2009:
Information related to geographical segments is not described because domestic sales constitute more than 90% of the aggregate amount of operating income of all segments.
First three quarters of the fiscal year ending March 31, 2010:
Same as the above.
[Overseas sales]
First three quarters of the fiscal year ended March 31, 2009:
Information related to overseas sales is not described because overseas operating income constitutes less than 10% of consolidated operating income.
First three quarters of the fiscal year ending March 31, 2010:
Same as the above.
Table of Contents
<Investments in securities>
1. Held-to-maturity bonds with fair value
(Millions of Yen) | ||||||
As of December 31, 2009 | ||||||
Value shown on Balance Sheets | Fair value | Difference | ||||
Bonds | 275,915 | 277,000 | 1,084 | |||
Foreign securities | — | — | — | |||
Total | 275,915 | 277,000 | 1,084 | |||
2. Bonds earmarked for underwriting reserves with fair value
(Millions of Yen) | ||||||
As of December 31, 2009 | ||||||
Value shown on Balance Sheets | Fair value | Difference | ||||
Bonds | 7,837 | 7,951 | 113 | |||
Foreign securities | — | — | — | |||
Total | 7,837 | 7,951 | 113 | |||
3. Other securities (available-for-sale) with fair value
(Millions of Yen) | |||||||
As of December 31, 2009 | |||||||
Cost | Value shown on Balance Sheets | Difference | |||||
Bonds | 861,634 | 880,478 | 18,843 | ||||
Stocks | 321,353 | 565,299 | 243,945 | ||||
Foreign securities | 373,614 | 355,739 | (17,875 | ) | |||
Other | 12,082 | 12,585 | 503 | ||||
Total | 1,568,684 | 1,814,102 | 245,417 | ||||
(Notes)
As of December 31, 2009 |
1. | Nipponkoa recognized 2,801 million yen of impairments on other securities with fair value. Nipponkoa recognized impairment on securities whose fair value is determinable as of the balance sheet date if the fair value declined by 30% or more from carrying value. |
2. | Trust beneficiary rights on loan receivables purchased, classified as monetary receivables bought on the Consolidated Balance Sheets, are included in Other. |
Table of Contents
<Money in trust>
1. Held-to-maturity money in trust
N/A
2. Money in trust other than those held for trading purposes or those held to maturity
(Millions of Yen) | ||||||
As of December 31, 2009 | ||||||
Cost | Value shown on Balance Sheets | Difference | ||||
Money in trust | 20,000 | 20,058 | 58 |
(Note)
As of December 31, 2009 |
Other than the above, money in trust held in joint accounts in the amount of 882 million yen are carried at their original cost on the Consolidated Balance Sheets as of December 31, 2009.
<Derivative financial instruments>
(Millions of Yen) | ||||||||
As of December 31, 2009 | ||||||||
Contract amount | Fair value | Unrealized gains or losses | ||||||
Interest rate-related instruments | ||||||||
Interest rate swap | 15,000 | 109 | 109 | |||||
Others | ||||||||
Credit derivatives | ||||||||
Short | 7,000 | (50 | ) | (50 | ) | |||
Total | — | — | 58 | |||||
(Note) Derivative trading that has hedge accounting applied is exempt from disclosure.
Table of Contents
<Stock options>
The 3rd quarter of the fiscal year ending March 31, 2010
1. Recorded amount and account on stock options for the 3rd quarter of the fiscal year ending March 31, 2010
Operating and administrative expenses: 217 million yen
2. Contents of stock options granted during the 3rd quarter of the fiscal year ending March 31, 2010
October 2009 issue subscription rights to shares | ||||
Title and number of recipients | Directors | 6 | ||
Executive officers | 19 | |||
Number of stock options by types of shares (shares) (Note) | Common stock | 408,000 | ||
Date of issue | October 7, 2009 | |||
Conditions to grant a right of stock options | The right was granted on the date of issue | |||
Length of services required | N/A | |||
Exercise period |
From: October 8, 2009 | |||
To: October 7, 2029 | ||||
Exercise period: From October 8, 2009 to October 7, 2029 (exercisable within 10 days after retirement). | ||||
Exercise price (Yen) | 1 | |||
Fair value of per share as of the date of issue (Yen) | 533 |
(Note) An amount is indicated by converting to number of shares.
Table of Contents
<Per share information>
1. Net assets per share
As of December 31, 2009 | As of March 31, 2009 | |||||
Net assets per share | 546.10 yen | Net assets per share | 458.09 yen |
(Note) Computational elements are as follows:
As of December 31, 2009 | As of March 31, 2009 | |||
Total net assets (Millions of Yen) | 411,797 | 345,467 | ||
Deduction from total net assets (Millions of Yen) | 936 | 793 | ||
Of which, subscription rights to shares (Millions of Yen) | 594 | 458 | ||
Of which, minority interests (Millions of Yen) | 342 | 334 | ||
Net assets at 3rd quarter-end attributable to common stock (Millions of Yen) | 410,861 | 344,674 | ||
Number of shares of common stock at 3rd quarter-end used for calculation of net assets per share (Thousands of shares) | 752,344 | 752,404 |
2. Net income per share
First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | |||||
Basic net income per share | 26.05 yen | Basic net income per share | 18.52 yen | |||
Diluted net income per share | 26.02 yen | Diluted net income per share | 18.49 yen |
Table of Contents
(Note) Computational elements are as follows:
First three quarters of the fiscal year ended March 31, 2009 | First three quarters of the fiscal year ending March 31, 2010 | |||
(1) Basic net income per share | ||||
Net income (Millions of Yen) | 19,798 | 13,939 | ||
Net income not attributable to common shareholders (Millions of Yen) | — | — | ||
Net income attributable to common stock (Millions of Yen) | 19,798 | 13,939 | ||
Average number of shares of outstanding common stock (Thousands of shares) | 759,759 | 752,501 | ||
(2) Diluted net income per share | ||||
Net income adjustments (Millions of Yen) | — | — | ||
Increase in number of shares of common stock (Thousands of shares) | 1,002 | 1,214 | ||
A brief summary regarding potential shares that were excluded from the calculation of diluted net income per share because they had no dilution effect and that changed significantly from the previous fiscal year-end | N/A | N/A |
<Subsequent events>
3rd quarter of the fiscal year ending March 31, 2010 | Fiscal year ended March 31, 2009 | |
N/A | N/A |
Table of Contents
2. Others
(1) Consolidated Statements of Income for the 3rd quarter of the fiscal years
Since Nipponkoa is classified as a specified business company, a company defined under Article 17-15(2) of the Cabinet Office Ordinance on Disclosure of Corporate Information, etc., the Consolidated Statements of Income for the 3rd quarter of the fiscal years are not reviewed by independent auditors.
(Millions of Yen) | ||||||
3rd quarter of the fiscal year ended March 31, 2009 | 3rd quarter of the fiscal year ending March 31, 2010 | |||||
Operating income | 249,242 | 227,877 | ||||
Underwriting income | 231,815 | 213,489 | ||||
Net premiums written | 161,385 | 163,798 | ||||
Deposit premiums from policyholders | 5,641 | 11,945 | ||||
Investment income on deposit premiums | 6,114 | 5,712 | ||||
Life insurance premiums | 15,178 | 16,813 | ||||
Reversal of outstanding claims | 1,765 | (7,456 | ) | |||
Reversal of underwriting reserves | 41,489 | 22,160 | ||||
Investment income | 17,131 | 14,238 | ||||
Interest and dividends | 15,309 | 15,026 | ||||
Investment income from money in trust | 231 | 1,117 | ||||
Gain on sale of securities | 7,688 | 1,577 | ||||
Transfer of investment income on deposit premiums | (6,114 | ) | (5,712 | ) | ||
Other operating income | 295 | 149 | ||||
Operating expenses | 258,669 | 236,263 | ||||
Underwriting expenses | 195,922 | 196,989 | ||||
Net losses paid | 103,421 | 108,004 | ||||
Loss adjustment expenses | 8,949 | 9,002 | ||||
Commissions and brokerage expenses | 28,883 | 29,311 | ||||
Maturity refunds to policyholders | 52,030 | 47,421 | ||||
Life insurance losses and other payments | 2,708 | 3,063 | ||||
Provision for outstanding claims | (1,513 | ) | — | |||
Investment expenses | 26,982 | 4,421 | ||||
Investment loss from money in trust | 3,159 | (6 | ) | |||
Loss on sales of securities | 4,340 | 1,337 | ||||
Revaluation loss on securities | 15,061 | 2,476 | ||||
Operating and administrative expenses | 35,468 | 34,901 | ||||
Other operating expenses | 295 | (48 | ) | |||
Interest paid | 79 | 19 | ||||
Ordinary profit (loss) | (9,427 | ) | (8,386 | ) | ||
Special gains | 15,988 | 229 | ||||
Reversal of statutory reserves | 15,912 | — | ||||
Reversal of reserve for price fluctuations | 15,912 | — | ||||
Other | 76 | 229 | ||||
Special losses | (1,282 | ) | 933 | |||
Provision for statutory reserves | (1,379 | ) | 650 | |||
Provision for reserve for price fluctuations | (1,379 | ) | 650 | |||
Other | 96 | 282 | ||||
Income (loss) before income taxes and minority interests | 7,844 | (9,089 | ) | |||
Income taxes | (3,952 | ) | (5,969 | ) | ||
Deferred tax adjustment | 4,823 | 1,823 | ||||
Total income taxes | (4,146 | ) | ||||
Minority interests | 11 | 5 | ||||
Net income (loss) | 6,962 | (4,948 | ) | |||
(Note) The amounts indicated above were calculated by subtracting amounts in the Consolidated Statements of Income for the first half of the fiscal years from the amounts in the Consolidated Statements of Income for the first three quarter of the fiscal years.
Table of Contents
<Segment Information>
[Information by types of business segment]
3rd quarter of the fiscal year ended March 31, 2009
(Millions of Yen) | |||||||||||||
Non-life insurance | Life insurance | Total | Elimination | Consolidated | |||||||||
Operating income | |||||||||||||
(1) Transactions with external customers | 242,076 | 17,795 | 259,872 | 10,629 | 249,242 | ||||||||
(2) Intercompany transactions | 229 | 5 | 235 | 235 | — | ||||||||
Total | 242,306 | 17,801 | 260,107 | 10,865 | 249,242 | ||||||||
Ordinary profit (loss) | (9,458 | ) | 31 | (9,427 | ) | — | (9,427 | ) | |||||
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3rd quarter of the fiscal year ending March 31, 2010
(Millions of Yen) | |||||||||||||
Non-life insurance | Life insurance | Total | Elimination | Consolidated | |||||||||
Operating income | |||||||||||||
(1) Transactions with external customers | 219,733 | 19,495 | 239,228 | 11,351 | 227,877 | ||||||||
(2) Intercompany transactions | 220 | 5 | 226 | 226 | — | ||||||||
Total | 219,953 | 19,501 | 239,455 | 11,578 | 227,877 | ||||||||
Ordinary profit (loss) | (8,945 | ) | 559 | (8,386 | ) | — | (8,386 | ) | |||||
[Information related to geographical segments]
3rd quarter of the fiscal year ended March 31, 2009:
Information related to geographical segments is not described because domestic sales constitute more than 90% of the aggregate amount of operating income of all segments.
3rd quarter of the fiscal year ending March 31, 2010:
Same as the above.
[Overseas sales]
3rd quarter of the fiscal year ended March 31, 2009:
Information related to overseas sales is not described because overseas operating income constitutes less than 10% of consolidated operating income.
3rd quarter of the fiscal year ending March 31, 2010:
Same as the above.
<Per share information>
3rd quarter of the fiscal year ended March 31, 2009 | 3rd quarter of the fiscal year ending March 31, 2010 | |||||
Basic net income per share | 9.22 yen | Basic net loss per share | 6.57 yen | |||
Diluted net income per share | 9.21 yen | Potential shares exist but an amount of Diluted net income per share is not indicated, because the amount recorded is net loss per share. |
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(Note) Computational elements are as follows:
3rd quarter of the fiscal year ended March 31, 2009 | 3rd quarter of the fiscal year ending March 31, 2010 | ||||
(1) Basic net income (loss) per share | |||||
Net income (loss) (Millions of Yen) | 6,962 | (4,948 | ) | ||
Net income not attributable to common shareholders (Millions of Yen) | — | — | |||
Net income (loss) attributable to common stock (Millions of Yen) | 6,962 | (4,948 | ) | ||
Average number of shares of outstanding common stock (Thousands of shares) | 754,718 | 752,498 | |||
(2) Diluted net income per share | |||||
Net income adjustments (Millions of Yen) | — | — | |||
Increase in number of shares of common stock (Thousands of shares) | 946 | — | |||
A brief summary regarding potential shares that were excluded from the calculation of diluted net income per share because they had no dilution effect and that changed significantly from the previous fiscal year-end | N/A | N/A |
(2) Other
N/A
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Part 2: Information on party(ies) providing guaranty to the Reporting Company
(Omitted.)
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Note Regarding Forward-looking Statements
This document includes “forward-looking statements” that reflect the information in relation to the NIPPONKOA Insurance Group (“Nipponkoa”). To the extent that statements in this document do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of Nipponkoa in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause the actual results, performance, achievements or financial position of Nipponkoa to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements after the date of this document. Investors are advised to consult any further disclosures by Nipponkoa in their subsequent domestic filings in Japan and filings with, or submissions to, the U.S. Securities Exchange Commission pursuant to the U.S. Securities Exchange Act of 1934.
The risks, uncertainties and other factors referred to above include, but are not limited to, those below. The risks, uncertainties and other factors are also referred to in our domestic Annual Securities Reports and Quarterly Securities Reports.
(1) | State of the Japanese economy |
(2) | Intensified competition in the non-life insurance industry |
(3) | Downgrading of financial rating |
(4) | Risk accompanying changes in relevant laws, regulations, accounting systems, etc. |
(5) | Natural disasters |
(6) | Risk of damages in excesses of normal predictions for insurance underwriting |
(7) | Reinsurance risk |
(8) | Overseas operations |
(9) | Life insurance and other businesses |
(10) | Risk of stock price volatility |
(11) | Interest rate risk |
(12) | Liquidity risk |
(13) | Credit risk |
(14) | Risk associated with exchange rate fluctuations |
(15) | Retirement benefit liabilities |
(16) | Legal risk |
(17) | Major disaster risk |
(18) | Leaks of customer-related data |
(19) | Business integration-related risk factors |
(20) | Other risks |