Daiichi set to bounce back with double-digit profit growth in fiscal 2026

Three of Japan's largest life insurers issued mixed net profit forecasts for fiscal year 2026, with Daiichi Life Group Inc. anticipating a strong rebound, while T&D Holdings Inc. and Japan Post Insurance Co. Ltd. projecting weaker growth.

Daiichi expects net profit attributable to equity holders of its parent company to rise 17.5% year over year to ¥513.00 billion in fiscal year 2026, which runs from April 1, 2026, to March 31, 2027. The prospective recovery follows profit declines in both fiscal years 2025 and 2024.

Daiichi was the only one of the three insurers in this analysis to report profit decreases over the last two fiscal years. It largely attributed the decline to a one-time accounting adjustment at US subsidiary Protective Life Corp. Protective Life adopted the Financial Accounting Standards Board's Long-Duration Targeted Improvements at the start of fiscal year 2025 and retroactively applied it to fiscal year 2024. According to an earnings presentation, the change resulted in the fiscal year 2025 net income coming in lower year over year as the fiscal year 2024 figure was restated.

Japan Post produced a cautious outlook for the next fiscal year, expecting net profit to decline to ¥141.00 billion for fiscal 2026 from ¥168.70 billion a year earlier. Lower core profit from life insurance activities, higher operating expenses and fewer policies in force are expected to weigh on future earnings.

The subdued outlook comes after Japan Post's net profit jumped significantly in fiscal year 2025. The company attributed the profit growth to a lower initial reserve burden for new policies, a marked improvement in positive spread due to a stronger market environment, and a decrease in insurance claims payments and policies in force.

T&D expects net profit to reach ¥135.00 billion, a slight decline from the ¥138.90 billion reported in fiscal 2025. The company had seen its income rise to ¥138.90 billion in fiscal year 2025 from ¥126.30 billion in fiscal year 2024, with Taiyo Life Insurance Co., Daido Life Insurance Co. and T&D Financial Life Insurance Co. contributing to the growth.

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Chasing new business

Japan Post is focusing on a recovery plan after being the only one among the three to report a year-over-year decline in the value of new business in fiscal year 2025. Management is hoping to revitalize sales activity after new policies for individual insurance dropped by 46.1% as fewer lump-sum payment whole life insurance policies were sold. The life insurer has also been working to improve its systems and attract new customers after news about the improper handling of private financial information within the group affected sales, according to an investor presentation.

Daiichi and T&D expect their value of new business to grow in fiscal year 2026, continuing the trend seen in the prior year.

For fiscal year 2026, Daiichi forecasts the value of new business to increase year over year to approximately ¥188.00 billion as its overseas business, particularly Protective Life, continues to expand. Group CFO Taisuke Nishimura said new business value at Daiichi Life Insurance Co. Ltd. is also projected to slightly grow year over year as new policy sales recover, according to a presentation script. Daiichi Life reported a modest 1% increase in the value of new business to ¥173.80 billion in fiscal year 2025.

T&D expects a steady value of new business growth for fiscal year 2026 of about 1.8% to ¥169.00 billion, following a 1.7% year-over-year increase in fiscal year 2025. Taiyo Life, Daido Life and T&D Financial Life contributed to the growth a year ago, thanks to stronger new business performance and rising domestic interest rates.

Investment returns

Japan Post Insurance was also the only one among the three to see a lower total return on investments in fiscal year 2025, according to S&P Global Market Intelligence data. Its total return on investments dropped year over year to ¥865.93 billion from ¥916.54 billion.

Daiichi Life Group had the strongest growth at 70.2% to ¥2.868 trillion, followed by T&D's 67.5% increase to ¥453.90 billion.