MS&AD Insurance Group Holdings, Inc.

First-quarter fiscal 2026 adjusted profit excluding gains on strategic equity sales was JPY 251 billion, up JPY 64.7 billion year on year, and reached 47.2% of the full-year forecast. Group adjusted profit increased by JPY 71.1 billion year on year to JPY 310.6 billion, or 38.8% of the full-year forecast. Insurance revenue was JPY 1.6158 trillion, up JPY 208.8 billion year on year. By segment, domestic non-life adjusted profit was JPY 124 billion, up JPY 4.2 billion; international adjusted profit was JPY 108.8 billion, up JPY 52.9 billion; and domestic life insurance service profit was JPY 16.5 billion, up JPY 4.4 billion. Strategic equity sale gains were JPY 59.6 billion, up JPY 6.4 billion year on year, and ESR rose to 215%. Management did not revise full-year guidance, saying nat cat losses, strategic equity sales, and the broader outlook remained within plan. The full-year strategic equity sales target remains JPY 268 billion, and management said it is too early to revisit the annual target despite the strong first quarter.

Management framed the quarter as broadly solid and ahead of expectations in several areas, especially international business and investment income. Hayashi highlighted that nat cat losses remained within the full-year range and that the group’s financial position stayed sound, as shown by the 215% ESR. In Q&A, management repeatedly said Q1 strength should not be extrapolated too far because the company is only at the beginning of the year and some of the outperformance came from favorable market conditions.

Nakayama walked through the main financial drivers: domestic non-life adjusted profit improved on better auto loss ratios from rate revisions, international profit rose sharply on low loss levels, higher revenue across regions, and the first-quarter contribution from W.R. Berkley, and domestic life improved due to lower onerous-contract losses after assumption reviews. He also said insurance revenue increased to JPY 1.6158 trillion, strategic equity gains reached JPY 59.6 billion, and ESR increased to 215% as retained earnings accumulated. On capital allocation and balance sheet matters, he said the strategic equity sale overhang has “pretty much been resolved,” while Barings investment and rising domestic stock prices pushed integrated risk volume higher, leaving ESR roughly unchanged versus March after both numerator and denominator moved.

Analysts focused on the drivers of the international outperformance, expense ratio improvement, nat cat exposure, and whether Q1 strength would lead to a guidance upgrade. Management broke down international profit growth by region, saying the Americas increase included a little more than JPY 10 billion from Berkley, Europe rose JPY 18.6 billion, and Asia rose JPY 14.9 billion, with Taiwan and FX as key factors. On domestic auto and fire lines, management said auto improved, but excluding onerous-contract reversals the underlying ratio was slightly worse due to higher repair costs, while fire improved by 2.7% and could have improved by 4% excluding the reversal effect. On Kumamoto and other cat events, management said losses were not yet fully visible but expected to remain within forecast and manageable with reinsurance and the JPY 150 billion-equivalent nat cat fund.