Review of Operations
Group Annualized Premiums from Policies in Force
Annualized premiums from policies in force for the Group as of March 31, 2022 amounted to ¥2,884.5 billion. Annualized premiums from policies in force for living benefits + medical coverage (total of two domestic entities), which we focus on as one of the growth areas, increased 3.1% compared to the end of the previous fiscal year to ¥620.2 billion, growing steadily for nineteen consecutive years since we started to publish such figures.
We believe that these are the results of our effort to offer insurance products and services through multiple channels, including sales representatives, bancassurance-banks, financial institutions, etc. and insurance outlets while responding to the changing social environment and diversifying customer needs.
Annualized premiums from policies in force is an indicator obtained by computing premiums of each policy in force on an annual basis and adding them all up.
European Embedded Value (EEV)
* The EEV of the Sumitomo Life Group is calculated as follows: Sumitomo Life’s EEV plus Medicare Life’s EEV and Symetra’s EEV attributable to Sumitomo Life’s equity stake in each company, less Sumitomo Life’s book value of equity of Medicare Life and Symetra.
The Sumitomo Life Group’s EEV increased by ¥189.7 billion compared to the end of the previous fiscal year due to the positive results of the insurance business such as new policies acquired and earnings secured from policies in force, despite the negative impact of rising overseas interest rates and other factors.
European Embedded Value (EEV) is an indicator of corporate value of an insurance company and shows such things as financial soundness and growth potential of the company.
Consolidated Insurance Premiums and Other
Consolidated insurance premiums and other declined at Sumitomo Life primarily due to a decrease in sales of individual annuities insurance but remained at the same level as the previous year at the Group as a whole, including Medicare Life and overseas operations (Symetra).
Insurance premiums and other consist largely of insurance premiums paid in by policyholders and reinsurance revenue, and account for the majority of our income.
Group Core Business Profit
* Calculated by combining core business profit of Sumitomo Life and Medicare Life, and profit before tax of Symetra, Baoviet Holdings, BNI Life, Singlife Holdings and PICC Life attributable to Sumitomo Life’s equity stake in each company, with adjustments made to some internal transactions. Including profit before tax of Singlife Holdings generated after Sumitomo Life’s investment in it (Period covered in FY2019: July 2019 to December 2019).
The group core business profit increased by 2.3% compared to the previous year mainly due to an increase in dividend income on domestic stocks and an increase in interest income on foreign bonds owing to the depreciation of Japanese yen at Sumitomo Life.
Core business profit is an indicator that shows the status of basic profit or loss for a period that is comprised of insurance-related revenue and expenses, including insurance premiums income and payment of insurance claims and operating expenses, and investment-related revenue and expenses consisting largely of interest and dividend income.
Consolidated Solvency Margin Ratio
Consolidated solvency margin ratio stood at 794.6%, demonstrating that we have adequate payment capability.
The solvency margin ratio is an indicator that shows the capability of an insurance company to pay insurance claims (soundness) in the wake of an event that cannot normally be predicted, such as a big disaster or a stock market crash. If this figure falls below 200%, the insurance company will be subject to a business improvement order by a supervisory authority.