9 major life insurers' 1st-half core profit drops 19.4% to 920 bil. yen+

TOKYO, Nov. 26 Kyodo - Japan's nine major life insurance groups including Nippon Life Insurance Co. said Wednesday their core operating profit dropped 19.4 percent to around 920 billion yen in the April-September period, partially due to shrinking interest and dividend revenues caused by the global financial turmoil.

Eight out of the nine companies suffered declines in core operating profit -- a
key gauge of an insurer's profitability.
The nation's top life insurer Nippon Life said its core operating profit slid
11.8 percent from a year earlier to 282.56 billion yen for the first six months
of fiscal 2008 until next March.
Only Sony Life Insurance Co. reported a gain in core operating profit to 16.54
billion yen, up 18.5 percent.
The fallout from the U.S.-triggered financial crisis has rippled over from the
Japanese banking industry into insurance companies as they combat losses or
shrinking appraisal gains on shareholdings and other investments.
Companies that provide variable annuity insurances that are mainly managed by
stocks also incurred sharp falls in their core operating profit.
With a deterioration in the investment environment, Japanese life insurers may
also have to address declines in dividends to policyholders, which is used as
one measure to return profits to their customers.
The Dai-ichi Mutual Life Insurance Co. group, Sumitomo Life Insurance Co. and
Meiji Yasuda Life Insurance Co. all suffered double-digit operating profit
falls of 18.7 percent, 25.1 percent and 13.7 percent, respectively.
Meanwhile, Mitsui Life Insurance Co. said its core operating profit plunged
82.9 percent to 7.1 billion yen and fell into the red with a pretax loss of
12.6 billion yen due to the disposition of losses in securitized products.
Industry sources have said Mitsui Life and Asahi Mutual Life Insurance Co. are
both considering replenishing their capital bases.
As to premium revenues, which correspond to sales at nonfinancial companies,
the nine insurance companies posted a 0.9 percent gain to around 8.97 trillion
yen, marking a rise for the first time in two years.
Nippon Life, Dai-ichi Mutual, T&D Holdings Inc., Fukoku Mutual Life Insurance
Co. and Sony Life reported a rise in premium revenues. The four other companies
that logged declines are Sumitomo Life, Meiji Yasuda, Mitsui Life and Asahi
Mutual.
All nine companies also saw their solvency margin ratio -- a key indicator of
an insurer's ability to pay policyholders -- falling from levels logged the
previous year.
Sony Life ranked top at 1,665.4 percent followed by Meiji Yasuda at 1,267.8
percent and Nippon Life at 1,127.3 percent. Mitsui Life ranked at the very
bottom with a ratio of 637.9 percent.
All nine insurers maintained solvency margin ratios well above the 200 percent
line, below which the government requires insurers to take prompt corrective
steps.
Meanwhile, among the foreign-owned insurance companies in Japan, Alico Japan
said its core operating profit gained 1.8 percent to 53.33 billion yen. But the
Japanese unit of American International Group Inc., effectively under U.S.
government control, also said it would add a total of 52.6 billion yen to its
capital base to cover impaired losses on shareholdings.
American Family Life Assurance Co. said its core operating profit climbed 36.7
percent to 75.68 billion yen.