Tokio Marine posts Q1 decline, to buy back shares

Mon Aug 11, 2008 4:13am EDT

TOKYO, Aug 11 (Reuters) - Tokio Marine Holdings (8766.T: Quote, Profile, Research, Stock Buzz), Japan's largest property and casualty insurer, posted a 42 percent decline in quarterly profit on Monday, as a stumbling economy dented its core insurance business.

Tokio Marine, which last month unveiled plans to buy U.S. insurer Philadelphia Consolidated as part of a push beyond its shrinking home market, also said it will buy back up to 50 billion yen ($455.8 million) of its own stock, a move that could support its softening share price.

The insurer said group net profit fell 41.6 percent to 28.9 billion yen in the three months to the end of June, hurt by a slowdown at its core unit, which booked a downturn in underwriting income.


Underwriting income was flat across the group while deposit premiums from policyholders fell by nearly 16 percent.

Although still little known outside of Japan, 129-year-old Tokio Marine has become increasingly aggressive in expanding overseas.

Japanese insurers face limited prospects for expansion at home given the country's slow-growth economy and expected decline in population.

Tokio Marine completed the purchase of Lloyd's of London insurer Kiln Ltd in March for 442 million pounds ($848 million), to increase its European presence.

The insurer also said it would by back up to 50 billion yen of its own shares, or 2.2 percent of its outstanding stock, between Aug. 12 and Nov. 18.

Shares of the firm have fallen 24 percent over the past 12 months, reflecting the worsening outlook for Japanese financial firms. Tokyo's index of insurance firms fell about 27 percent during the same period. ($1=109.93 Yen, $1=.5214 Pound) (Reporting by David Dolan; Editing by Michael Watson)