We Raise Our Fair Value Estimates on Japanese Insurers by 4%-8% As We Roll Our Forecast Models

We raise our fair value estimates for Japan’s three property and casualty insurers by 7.5%-7.7% and our fair value estimate for Dai-Ichi Life by 4.2% as we roll our forecast models forward a year and incorporate recently reported results. Our new fair value estimates are JPY 7,000 per share for Tokio Marine, equivalent to 0.89 times book value adjusted for catastrophe, contingency, and price fluctuation reserves, unrealized gains on bonds not marked to market, and the value of in-force life insurance business; JPY 4,300 for MS&AD Insurance, 0.47 times book value with the same adjustments; JPY 5,600 for Sompo, 0.60 times adjusted book value; and JPY 2,500 for Dai-Ichi Life, 0.36 times embedded value.