Table of contents
Investment summary 3
Initiate on subsector with a MARKET WEIGHT stance 3
Characteristics of non-life stocks 7
Analysis of long-term performance relative to TOPIX 7
Position of the non-life stocks within the overall financial sector 11
View of sector valuations 14
Share price performance of individual issues 19
Consideration of valuation of individual stocks and TPs 24
Examination of the merger ratio for previous mergers 26
Conditions in the domestic non-life market 31
Automobile insurance 32
Fire insurance 35
Past market share trends 36
Evaluation of the recent business combination 37
Shareholder return policies 41
Risk factors 42
Common risk factors 42
Risk factors by individual company 42
Mitsui Sumitomo Insurance Group Holdings (8725 / 8725 JP) 44
Stable performance 44
Investment stance 45
Valuation and TP 45
Business overview 46
Overview of main businesses 47
Earnings trends 50
Forecasts 52
Risks 52
Sompo Japan Insurance (8755 / 8755 JP) 56
Positive supply/demand driver > event risks 56
Investment stance 57
Valuation and TP 58
Business overview 58
Overview of main businesses 59
Earnings trends 62
Forecasts 64
Risks 64
Tokio Marine Holdings (8766 / 8766 JP) 68
Leading company in the sector but already on a premium valuation 68
Investment stance 69
Valuation and TP 69
Business overview 70
Overview of main businesses 71
Earnings trends 74
Forecasts 76
Risks 77