Sumitomo Life Insurance Co, Japan’s fourth-largest life insurer, plans to try to raise about ¥100 billion (US$1.1 billion) in capital as early as next month to strengthen its financial base, a spokesman said.
The Osaka-based life insurer is considering borrowing perpetual subordinated loans from domestic banks, including Sumitomo Mitsui Financial Group Inc, Sumitomo Life spokesman Yoshiki Miyazaki said by telephone yesterday.
Japanese life insurers are bolstering their balance sheets as the worst financial crisis since the Great Depression erodes the value of their investments and earnings. Insurers are taking action because the government may move to tighten capital rules.
‘IMPROVING CAPITAL’
“Choosing perpetual subordinated loans to raise funds is aimed at improving capital quality in advance as we anticipate that capital requirements may become stricter,” Miyazaki said.
Mitsui Life Insurance Co said this month it will raise ¥60 billion to boost capital, while Asahi Mutual Life Insurance Co last month said it aims to raise about 35 billion yen by year’s end.
“There’s a possibility that life insurers’ assets have deteriorated considerably amid the financial crisis,” said Susumu Kato, chief economist at Calyon Securities in Tokyo. Japanese life insurers, of which many are mutual corporations, “have little choice but to boost capital in order to pay policyholders in a stable manner.”
FALLING PROFITS
Unrealized profits on the securities Sumitomo Life holds fell to ¥120 billion at the end of September from ¥711 billion a year earlier, according to the company’s statement.
“There’s no problem in the company’s financial health” because Sumitomo Life’s solvency margin stood at 996 percent at the end of September, Miyazaki said.
Solvency margin ratio is a gauge of life insurers’ ability to pay policyholders. Sumitomo Life’s ratio was the fifth highest among Japan’s nine biggest insurers at the end of September. The industry requires the ratio to be more than 200 percent, the threshold for a healthy life insurer.
The Nikkei newspaper reported earlier yesterday Sumitomo Life may boost capital in January. The paper said the insurer may buy preferred securities issued by Sumitomo Mitsui Financial.
FORECAST CUT
T&D Holdings Inc, Japan’s biggest publicly traded life insurer, cut its full-year net income forecast by 95 percent last month to ¥2 billion, citing losses on stock investments.
Asahi Life posted 112 billion yen of unrealized losses at the end of September, the company’s earnings statement showed.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source