Sompo Holdings, Inc.

FY2025 adjusted consolidated profit was JPY 535.2 billion, up JPY 211.8 billion year on year, a record high. Domestic P&C profit rose by JPY 95.9 billion, helped by a JPY 70 billion improvement in base profitability at fire and casualty and JPY 15 billion higher investment income; overseas insurance profit increased by JPY 105.5 billion, and Sompo Wellbeing added JPY 7.9 billion. FY2025 also benefited from a JPY 97.7 billion tailwind from lower nat-cat losses. For FY2026, adjusted consolidated profit is projected at JPY 500 billion on a normalized basis, up JPY 62.4 billion versus FY2025 normalized profit. The company expects further domestic P&C improvement and a full-year contribution from Aspen; FY2026 dividend per share is planned at JPY 200, up 33%, with payout ratio expected at 39% and total FY2025 shareholder returns set at JPY 281.6 billion.

The CFO said Sompo’s strategy remains focused on improving profitability in domestic P&C, growing overseas insurance, and integrating Aspen, while maintaining flexibility for future capital allocation. He repeatedly framed the company’s goal as achieving 13% ROE in a stable manner over time, not by forcing short-term buybacks. He also said the group wants to be ready for larger M&A opportunities as the market softens.

Tajiri highlighted that the FY2025 result was driven by domestic P&C, where fire and casualty base profitability improved by JPY 70 billion and investment income rose by JPY 15 billion, plus overseas insurance, where profit increased by JPY 105.5 billion. He said FY2025 benefited from a one-off JPY 97.7 billion tailwind from reduced nat-cat losses, so FY2026 is guided to JPY 500 billion on a normalized basis, up JPY 62.4 billion. On capital return, he said FY2025 total returns are JPY 281.6 billion, including a JPY 150 dividend for the full year and JPY 146 billion of buybacks, while FY2026 DPS rises to JPY 200 and the payout ratio is expected to be 39%. He also explained ROE adjustments tied to fund-related FVTPL and strategic shareholdings, saying the adjusted FY2026 ROE would be 13.1%.

Analysts pressed management on why buybacks are not being accelerated despite a high ESR and whether the 13% ROE target would remain a hard ceiling. Tajiri जवाबed that the upper ESR limit has been removed, the group wants to preserve capital for possible large M&A, and it does not want to make short-term capital moves just because one year falls below 13%. Questions also focused on Aspen’s ESR impact, with management saying the expected hit was revised from about 30 points to 15 points because Aspen had already accumulated profit and capital before closing. On auto insurance pricing, management said January 2026 saw a 7.5% increase and another 1.8% is planned for July, with a goal of reaching a 95% combined ratio over time.