Japanese insurer Tokio Marine Holdings is projected to achieve a return on equity (ROE) of approximately 16% by fiscal 2030, down from an estimated 18% in fiscal 2026, according to research from Morningstar. The slight decline is primarily attributed to lower gains from equity sales.
Morningstar’s analysis indicates that net earned premiums are expected to grow around 5% annually through fiscal 2030, while the loss expense ratio is likely to remain stable at roughly 65%. Despite the modest softening in ROE, Tokio Marine’s long-term outlook remains unchanged, reflecting steady operational performance and strategic risk management.
The insurer recently raised its full-year profit guidance by $0.8 billion (¥120 billion), bringing the target to $8.0 billion (¥1.23 trillion) after December-quarter adjusted net income reached 89% of the previously set full-year target. This revision was primarily supported by gains from equity sales, lower catastrophe losses, and reduced capital losses in North America.
Performance across both domestic and international operations generally met expectations. International adjusted net income benefited from yen depreciation and fewer capital losses, although Morningstar cautions that softer conditions in overseas insurance markets could weigh on profit margins in the coming years.
Domestically, Tokio Marine experienced lower catastrophe losses, which bolstered earnings. However, deteriorating loss ratios in auto, fire, and specialty insurance lines indicate potential headwinds. Catastrophe losses are expected to normalise, and rising cost inflation could partly offset steady premium rate increases.
Valuation metrics suggest that the stock remains elevated. With a recent share price of $40.9 (¥6,297), Tokio Marine trades at roughly 2.4 times price-to-book, above the 2.0 times implied by Morningstar’s fair value estimate and higher than the 1.3–1.6 times range for major peers. The premium reflects the insurer’s consistently above-peer profitability. The fair value estimate is maintained at $35.8 (¥5,500).
Key Financial Metrics
| Metric | Fiscal 2026 Forecast | Fiscal 2030 Projection | Notes |
|---|---|---|---|
| Return on Equity (ROE) | 18% | 16% | Lower equity-sale gains expected |
| Net Earned Premium Growth | – | ~5% | Annualised growth through FY2030 |
| Loss Expense Ratio | ~65% | ~65% | Expected to remain stable |
| Adjusted Net Income | $7.2b (¥1.11t) | $8.0b (¥1.23t) | FY2023 guidance upgrade |
| Price-to-Book | 2.4x | – | Above peer range of 1.3–1.6x |
| Fair Value | $35.8 (¥5,500) | – | Unchanged |
Morningstar’s assessment suggests that while ROE may moderate, Tokio Marine’s robust underwriting and prudent capital management continue to support its status as a top-performing insurer in Japan and overseas markets.