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Review of Operations

Annualized Premiums from Policies in Force

Reviewing our fiscal 2018 consolidated performance for the Sumitomo Life Group, annualized premiums from policies in force decreased 0.0% from the end of the previous fiscal year to ¥2,782.4 billion ($25.0 billion).
Annualized premiums from policies in force for the third-sector insurances, which we focus on as a growth area, increased 1.9% year on year to ¥583.8 billion ($5.2 billion), on the basis of two domestic entities (Sumitomo Life and Medicare Life) excluding Symetra, growing steadily for sixteen consecutive years since we started to publish such figures.
The main reason for this is that we have achieved steady results through “multi-channel, multi-product strategy” in the nursing care (including work disability) and medical insurance markets, which are expanding along with the advent of a long lived society.

Annualized Premiums from New Business

In fiscal 2018, the Sumitomo Life Group’s annualized premiums from new business decreased 2.4% from the previous fiscal year to ¥209.9 billion ($1.8 billion).
The decrease from the previous fiscal year was mainly due to drop in sales volume of yen-denominated saving type products in the domestic business.

* Symetra’s performance has been recorded since February 2016.

Core Business Profit

Core business profit is an indicator of the fundamental earnings strength of Japan’s life insurance companies. In fiscal 2018, adjusted group core business profit, which represents profitability excluding the impact of the standard policy reserves concerning the minimum guarantees for variable annuities, etc., increased 10.0% from the previous fiscal year to ¥398.1 billion ($3.5 billion).
Meanwhile, the size of the negative spread has been constantly shrinking since fiscal 2001 when the Company started its disclosure, which turned positive for the first time in fiscal 2014 and the width of the positive spread has expanded for five consecutive years.

*1 Group core business profit (see the solid line graph) is calculated by combining core business profit of Sumitomo Life and Medicare Life, and profit before tax of Symetra, Baoviet Holdings, BNI Life, and PICC Life attributable to Sumitomo Life’s equity stake in each company, with adjustments made to some internal transactions. The dotted line graph indicates the sum of core business profit of Sumitomo Life and Medicare Life.
*2 Adjusted core business profit (see the bar graph): Core business profit excluding the impact of provision (reversal) of the standard policy reserves, etc. concerning variable annuities.