Thank you everyone for gathering here today. My name is Ishiguro of IR Group. From now on, I would like to start the telephone conference regarding the fiscal 2021 second quarter results and full-year projections of Tokio Marine Holdings. This conference will be done in two parts as we have pre-announced. The first part will be the management session where our Group CEO, Mr. Komiya, and Group CFO, Mr. Yuasa, will talk about projections, how they view the current business environment, and capital policy using the presentation material posted on our website today. That will take about 10 minutes. Then after that, we will take high-level questions from the participants. After the first part, in the second part, we will take more specific questions regarding each business. People in charge of each business will be answering those more detailed questions.
Time allocation in between these two parts is challenging because we are doing this style for the first time. We are thinking of deciding this hour to be half and half, but we will be flexible depending on the situation. If we run out of time in part two, IR Group will be responsible in getting back to you with additional questions if we do not have adequate time in part two. Before we begin, we need to give you some words of disclaimer. In this conference, we will refer to future projections based on current estimation.
Please note that it may contain risks and uncertainties. Please be aware the actual results may differ from the projections we share with you. There is a recording service in this conference. Now let's begin part one of the conference. First, our Group CEO, Mr. Komiya, will present to you for about seven minutes. Komiya-san, please start.
Hello, everyone. Good evening. My name is Komiya. Thank you very much for joining this conference call despite your busy schedule. I would like to also extend my appreciation to all of you for always extending your support to Tokio Marine. As a starter of the management session, I would like to explain the financial results for the second quarter, and based on that, would also like to give you some messages from the management. Please turn to Page three of the material. We have summarized three key messages we wanted to convey to you today. Up until now, Tokio Marine has tried to diversify risk globally and taken high growth momentum from the international business. That is the basic strategy we had, and we executed on that strategy.
At the same time, as a global insurance company, we have embellished our capability to manage the group by gathering wisdom and passion of the members from all over the group, including domestic and international companies. I would like to report to you that recently, we are seeing the outcome of this kind of an effort in full scale. I will be more specific, starting with the first point. Adjusted Net Income at the end of the second quarter stood at JPY 318.1 billion, year-on-year 170%. Progress rate against original projections is 75%, which is a high level compared to the average progress rate from the past five years. In one word, I can say that this is a very good progress.
Second point is that based on recent favorable trend in businesses, we are revising the full year Adjusted Net Income guidance upwards by JPY 66 billion, and we will refer to the guidance to be JPY 490 billion. Regarding our future targets of Adjusted Net Income being JPY 500 billion, Adjusted ROE of around 12%, we have been explaining to you that within the course of the current interim management plan we started from this fiscal year, which is a three-year plan, those targets will come to a reachable range. However, forecast for fiscal 2023 is expected to have some upside, and by 2023, I believe we will well over overshoot the targeted Adjusted Net Income of JPY 500 billion. We believe such strong profit growth and shareholder return should come hand in hand. Aiming to raise the payout ratio to be 50% should be accelerated to 2023.
It will happen in 2023. Based on this decision, payout ratio of fiscal 2021 this year will be raised to 47% from the original projection of 43%. DPS will be raised by JPY 30 compared to the original projection, and will increase year-on-year by JPY 45. DPS will become JPY 245 per share. During the current midterm plan, we will use means of profit growth and raise in payout ratio. We have these two drivers to enhance shareholder return. Now, I will touch upon these points in more details. Please turn to Page four. Top line as of the end of the second quarter as well, net premiums written increased by 4.5%, and life insurance premium increased year-on-year by 0.6%. They both outpaced the original projections at the beginning of the year.
By reflecting this favorable result, we will make an upward revision to this year's full-year projection. Specifically, projection for net premiums written for the full year is revised to be JPY +3.8 billion year-on-year, and also revising the life premium upwards as you can see on the page. Now, I would like to talk about Adjusted Net Income. Please turn to Page five. As I have already touched on, consolidated result of Adjusted Net Income for the first half of the year was JPY 318.1 billion, and progress rate versus the original projection is 75%, which is very high compared to the average progress rate from the past five years. Now, let's look at its components. In our domestic business at Tokio Marine, higher. At the same time, incurred loss is lower than expected because of COVID-19 impact and benign natural.
The TMNF average rate of progress for the past five years is 89.8%, whereas this time it is 94.8%. Overseas, there was some impact of Typhoon Mindulle storm . But we had a strong performance both in insurance underwriting and investment, which offset the impact of Mindulle storm and progressed well above the original projection. Major North American businesses at the end of the second quarter was better than the original plan by JPY 25 billion. Next, we will talk about the upward revision to the full-year projection. Please turn to Page six. Full-year forecast was revised up by JPY 66 billion to JPY 490 billion , as I explained earlier. Let me take you through the breakdown by business unit profits. In blue, our domestic TMNF business is expecting increase in underwriting profit, and was revised up by JPY 37 billion.
National catastrophe budget for the second half is, this may be conservative, but JPY 3 billion before tax. Next is international business in orange. Despite the impact of natural catastrophes, such as Hurricane Ida in the second half, underwriting profits and investment income were both strong. Therefore, projections were revised up by JPY 35 billion. As described, we are finally seeing our strategies planned and executed bear fruit on a full scale. In light of our current performance, or should I say, our underlying capabilities on a normalized basis, Adjusted Net Income in fiscal year 2023 is expected to increase further to far surpass JPY 500 billion. As management, we will brace ourselves to increase through profit and ROE this fiscal year and beyond, which I plan to share with you next week at the IR briefing. That is all for me.
Komiya-san, thank you very much. Let me ask Yuasa-san to cover capital policy.
This is Yuasa, CFO. Let me take you through our shareholder return policy. Please turn to Page seven. Primary means of shareholder return is dividends for the company, which will be sustainably increased along with profit growth. The company has so far said that once the company reaches its goal of above JPY 500 billion in Adjusted Net Income and approximately 12% in Adjusted ROE, payout ratio shall be increased to levels on par with global peers. The timing, however, referred to as when the company is able to deliver the target in a stable manner and was not clearly set out. As mentioned by Komiya earlier, the company has been executing its management and business strategies to realize our goals.
As shown in the upward revision of the fiscal year 2021 profits, our underlying capabilities are steadily improving. In May this year, we asserted that Adjusted Net Income for fiscal year 2023 is within reach of the JPY 500 billion. Unless anything unexpected happens, we should be able to achieve it, and we are confident to be able to remain above JPY 500 billion beyond fiscal year 2023. Based on this understanding, the timing of realizing payout ratio of 50% is now referred to as when Adjusted Net Income is expected to exceed JPY 500 billion or have been brought forward to in fiscal year 2023 under the current plan, for the sake of better transparency.
As we brought the timing forward, payout ratio in fiscal year 2021 is revised up from the initial 43% - 47%, DPS up by JPY 30 from the original forecast, and up by JPY 45 year-over-year to JPY 245. The company is confident of profit growth beyond the fiscal year 2023. After raising ratio to 50%, we intend to raise the DPS on the basis of profit growth and try not to dividend impeccable. Next is capital level adjustment. In May this year, we said in fiscal year 2021, JPY 100 billion will be spent flexibly, including bolt-on M&As. Share buyback of JPY 30 billion in June was followed by another JPY 30 billion share buyback in September. JPY 60 billion in share buyback has been executed so far this year. As for the remaining balance of JPY 40 billion this fiscal year, we are committed to execute we promised.
The timing of announcement will be decided in a flexible manner. At this point in time, we do not anticipate bolt-on M&A will be deducted from the remaining balance of JPY 40 billion. So far, the company has taken a mid to long-term perspective in using generated capital into business investment to realize growth and returning excess capital to shareholders in a disciplined manner. We will continue with our capital policy to realize profit growth and increase Adjusted ROE. From this perspective, the new method introduced in fiscal year 2021 was meant as a show of intent of the company that capital level adjustment question of whether we do it or not will be implemented.
However, it turned out to draw many feedbacks from the equity market. Therefore, in fiscal year 2022, we are considering to revive it in a way that can be supported by the market. The company will execute its business strategy in a steady manner to first of all, achieve certain goal and to respond to the expectations of the capital market. Your continued support and understanding is very much appreciated. This is all from me.
Yuasa-san, thank you very much for that. We have come to the end of the presentation for part one. We would like to spend the following time, to take your questions. Call asking questions please explain in Japanese. We will start Q&A.
Okay. First, SMBC Nikko . Mr. Muraki, please have your question.
Thank you for the opportunity. CEO and also Mr. CFO, I was listening to them, and I was listening to the Greenberg's statement as well. He has never been confident before, and I think it overlaps with his comment. I have a question on Page six, and so JPY 490 billion, which is the projections of all the Adjusted Net Income for this fiscal year. I know that there are a lot of one-off items, such as reduction in traffic, capital gain from asset management. You don't have to refer to the details about the underlying earnings capability. How much do you think is coming from your true underlying earnings power, excluding the one-offs? You said that you will be exceeding JPY 500 billion. What are the drivers that you will have next year that would make you reach JPY 500 billion and beyond?
Thank you for the question. This is Komiya speaking. Let me answer your question. JPY 490 billion, how we view that? As you said, this includes one-off factors such as investment income in North America. I do not have the exact numbers, but there must be a drop in loss ratio coming from COVID-19, etc. If we exclude those one-off items, then JPY 475 billion, JPY 470 billion would be the underlying figure. Enhancement over true earning capability, we need to do more. For example, rate increase in North America at TM Kiln, the turnaround of TMK. With the domestic auto insurance, we also need to be improving the profitability. We have made progress with these, and this improvement is likely to continue going forward. We have made many challenges, social inflation, COVID, etc. We have all those challenges. We have enhanced our underwriting capability.
We have also improved our underwriting organization, their capabilities as well as their execution capability to improve underwriting income, etc. That is also coming from a better synergy within the Tokio Marine Group. For 2023, the JPY 500 billion for us to exceed the JPY 400 billion. What are the key drivers towards that? Domestic business, improvement of profitability of auto insurance, and also expansion of the specialty insurance in the international, in North America. Centering around North America, we are expecting increase in underwriting income, the growth of PURE.
Together with the expansion of the business, there should be a bigger AUM, and therefore bigger investment income to be enjoyed. In North America, the major five companies, they will be doing bolt-on acquisitions, and we also have joint venture with Kasikornbank, other initiatives in the emerging markets. For those details, I will refer more to them in the IR meeting next week. I hope to refer to them more next week. That concludes my answer.
Thank you. I just wanted to confirm on one point. In North America, including social inflation, I know you had some challenges. Those challenges, would you say that they are already passed, you have overcome them, and they are the past story?
This is Komiya speaking again. Several companies suffered with social inflation, especially PHLY suffered with social inflation. Those costs, we have been able to increase the rate over the market level, and also for the bad result policies, we have been declining them. There has been a better underwriting discipline in reviewing those policies. PHLY has been very persistent in doing that. As a result, 2019 was the hardest year, but then in 2020, 2021, in the first half of this year, we are seeing the fruit of their labor are reflected in the numbers.
Of course, social inflation, there is a possibility that it is going to worsen again. We are reducing the high level limit, and other measures on the underwriting side while we are in the COVID-19 situation. There are some courts that are closed, but they will be open. To each policy that they have underwritten, they have dealt with those policies one by one. The new CEO, Mr. John Glomb, it has been, I guess, about a year since he was appointed. The management team, at the end of October, I visited them actually, and I met the CSO, a new person was added. PHLY was always known for having good top line. We plan to continue to have them grow into the future.
I understand very well. Thank you very much.
Thank you for that. Watanabe-san from Daiwa Securities, please.
This is Watanabe from Daiwa Securities. I have a question on capital policy. Instead of one-time dividend, ordinary dividend payout has been revised this time. This, I think, is quite bold. This one-time dividend, how will that be positioned going forward? Yuasa-san, you said that the scheme will be revised in fiscal 2022. What kind of framework do you have in mind? If you could please share your idea with us, please.
In which case, this is Yuasa speaking. Let me take your question. As for one-time dividend, the reason why I introduced it, well, it was based on the comments and feedback we received from the stakeholders and shareholders that some actually preferred a one-time dividend. It was, I think, to a certain extent, appreciated by our shareholders. At the beginning of the year forecast, decrease in dividend seemed to be emerging. I think that it appeared quite difficult to understand at the beginning of the year. Based on that, going forward, we decided not to do any one-time dividend payout, and instead, conduct ordinary dividend.
As I said, fiscal year 2023, payout ratio exceeding 50%, we are more confident in achieving that. Therefore, that led to our decision. When we make one-time dividend, the JPY 100 billion in budget is going to be used. We took that into account and decided that we should not do it this time around. That is the basis of our decision. The second point, when it comes to introducing a more easier to understand a new method, I apologize, but this is something that we intend to deliberate by May next year.
This JPY 100 billion of budget that we introduced this year, we have received a lot of feedback and had exchanges with the shareholders, with our investors, and we will take those ideas into account, to come up with a better, easier to understand approach.
That was very clear. Thank you very much.
This is, b asically, I think our CFO said it well, but with the JPY 100 billion in budget, there are a lot of ideas on that. Our thinking was well reflected in Mr. Yuasa's presentation at the outset. We received a lot of inputs and feedback. The JPY 100 billion, the guidance or framework, we will not do that in fiscal 2022. With regards to a new method, we want to adopt something that is easier to understand.
Next, from Citigroup, we have Mr. Niwa.
My name is Niwa from Citi. I'm looking at Page seven, line number one. I want to know more about the certainty of profit growth, because it's been six months since the year began in May. You said that JPY 500 billion will become a reachable range, but it's only been 6 months. What changed in those 6 months? Is it the internal organic growth? Is it the M&A possibility, or is it the improvement of the macroeconomy? Or was JPY 500 billion a conservative plan to begin with? What happened in those six months for you to say that today?
This is Komiya speaking. About fiscal 2021, we looked at the COVID-19 impact in 2020, how much of that is going to procrastinate this year, etc. We have some extraordinary factors. As I said in the very beginning, we have worked dedicatedly on risk diversification and other efforts. We have taken that strategy. We have been executing on that strategy. Through those efforts, looking at 2017, 2018, 2019, 2020, we had much natural catastrophes. We were hit with COVID-19.
Looking at 2021, those factors are relatively benign. It's easier for you to see the underlying earning capability without those factors this year. Although we had much challenges, as I mentioned earlier, the underwriting capability, the earnings generation power, etc, the underlying capability have been enhanced thanks to all of the initiatives that we have taken and as for group synergy. Sometimes I show you some quantitative results, but there are also some qualitative aspects of synergy. For example, information exchange of comments.
We encourage each other, so there is much more coherence in the group. So management wise, and also emotionally, we have become more resilient as a group. Talking about each of these factors, as I said in the beginning, there are some issues related to auto, improvement of profitability with fire. These are the things that we have worked on, and we are seeing a good result out of those efforts. Also outside of Japan, the rate increase effort, we have materialized the result of such effort as well.
There are some specific factors, but what I have just answered you now is reflected in our underlying earnings capability. That is what we are seeing now on the surface, although it has been six months since the current midterm plan began. That is my understanding of where we are. Of course, we will continue to put an equivalent amount of effort into those efforts, to those initiatives.
Thank you. I do not mean to be so meticulous, but you are already making this change in the statement after six months. Would you be further upside expected in the future?
Thank you for that. The upside, the direction that we are going upward, of course, we have some expectations for going upwards and seeing more upside. However, the era we live in, we have natural catastrophes, we have global economic situations, etc. So we need to be vigilant, and we need to be alert as ever in living through such era. But if everything that we are working on materializes, then that is what I would like to see, and we are doing our best in order to see a favorable result.
Thank you.
Thank you very much for the question. Next question from Mizuho Securities. Mr. Koki, please.
Mr. Koki from Mizuho Securities. Thank you very much for taking my question. Ordinary dividend level has been raised, and I might be missing my point asking this question, but when it comes to additional return to shareholders next fiscal year, you said that you are going to revise the system, but if profit is going to grow as you expected, JPY 100 billion will increase. There will be an incremental increase. Can we expect that? This time the profit outlook has been raised, and the capital level adjustment that you had expected at the time of compiling the midterm plan could be also raised. That is my question.
This is Yuasa speaking. Thank you for the question. Let me take that question. With regards to capital level adjustment, as you know, we use ESR. We have a target range which is the basis of our decision, and if profit level increases, ESR will also increase in line. Then share buyback and other forms of shareholder return will also likely increase. But as you correctly pointed out, and as Komiya-san explained earlier
The budget of JPY 100 billion will no longer be in place. We will discontinue having a budget in place. We will no longer have that, but depending on the ESR situation and also business-related investment or M&A investment, those factors will have impact. We do not have any budget in terms of shareholder return. Those other factors will not have any impact on how much we will be spending on share buyback. As we have been doing, we will continue our disciplined approach towards share buyback.
Thank you very much for that. Flexible shareholder return tool, I thought that was, and that is where I was coming from in asking your question.
Thank you for your question. This is Komiya speaking. Let me supplement. With regards to our shareholder return, our CFO explained it well, but what I wanted to complement is that in terms of shareholder return, the total shareholder return policy, I think this is more or less a global standard. We do not take that approach, but the DPS, we want to increase DPS for social basis is a dividend. This is our policy.
For the stock level, it is not to say that we are going to automatically link it to ESR, but we will be eyeing ESR level and implement shareholder return in a flexible manner. For this fiscal year, what we did at the beginning of the year, we adopted the JPY 100 billion minus alpha approach, and we have an outstanding balance of JPY 40 billion. We would execute that for sure, but when it comes to timing of execution, we will be looking at the market and decide in a flexible manner. Having said that, of course, we will be eyeing on the situation and execute in a flexible manner.
Thank you very much, Komiya CEO, for responding to my question.
From Mitsubishi UFJ Morgan Stanley, we have Ms. Tsujino. Please ask your question.
Thank you for this opportunity. Capital adjustment and change to your shareholder return policy. What you disappoint the market is that in the international forecast, it is very conservative. Your projections are too conservative. The performance of the international business, I think you set the standards too low. Do you have anything more realistic? Do you have any plans to make anything more realistic on that point? Are you thinking of any ways to revise how you project your international business?
This is Komiya speaking. As it was asked previously, we made an upward revision. The key drivers, we have some from domestic, some from overseas. For the overseas businesses, we have some key drivers there, which led to upward revision. I am sure international business will be leading the profit growth going forward. That is our basic stance. Also for the international businesses, at each group company level, it is sum-of-the-parts. Each of them contribute and accumulate, and they take time, and they discuss and make up the numbers one by one. It is a certain number. It is a highly probable number that we announce as projections for the international business because of how we announce those numbers and meet the long-term target, which was JPY 500 billion, 12% ROE.
From the international point of view, they have a responsibility that they need to bear. Top of the international business is well aware of what is expected of the international business at Tokio Marine Group. Therefore, we want to give you some highly accurate plans. At the same time, while we look at the group entirely, we need to understand the roles and responsibilities given to different parts of the group. By doing those two, we want to be setting the projections for international business. Tokio Marine Holdings will be involved in setting the projections for the international business.
Thank you. The way you create those numbers will not change, I guess.
Looking at the international business, your peer companies, they are in their third quarter. The premium growth, it slowed down in the second quarter, but in the third quarter, it started to grow again. Looking at their nine-month performance compared to the first quarter, there is a pickup in the growth of premium by the international companies. What you have announced this time is April to June, and premium growth, HCC, etc, we are seeing growth as well. PURE also grew their premium. July to September, I am sure it is going to accelerate.
You said that you went over at the end of October, so did you get any feelings on whether their growth has accelerated in the most recent months? Any colors on what you witness in the U.S.?
Thank you for the question. As you have pointed out, for the international business, the July and after quarters, they are very disciplined with underwriting. They are bottom-line-oriented, and they should, of course, not relax. That kind of culture is well penetrated throughout the international companies. Looking at the major North American companies, that culture is well penetrated, and so they know the important points that they need to keep. In each line of business, there are some areas where they need to be careful.
We are setting the guideline for those international companies and where they can be more aggressive. The top-line growth, if they see any strength in that area from July and after in the international business, looking at the situation, it looks like momentum is picking up. Top-line growth, it will be subdued in some necessary areas, but will grow in other areas, and that is what we expect of the international business.
Thank you.
Thank you for the question. JP Morgan Securities, Otsuka-san, over to you.
This is Otsuka from JP Morgan. Thank you very much. I am on Page seven. This is again about shareholder return. I am looking at the bottom of the chart. After 2023, 2024, there is more or less flat growth. You are saying that it is sort of suggesting that you will flatten out around 50%. This 50% is looking at the global peer level that you announced in May this year, I think. It is partly comment and partly question, but 50% stable, you said? What do you mean by that?
We are not suggesting, or I am not suggesting that this should grow to 60% or 70%, but finally, you are able to exceed JPY 500 billion, and you are very confident on that. This profit level is approaching the global peer levels. Since you are approaching that level, and you are confident about that, you do not necessarily have to stick to using the same level of payout ratio as global peers. Maybe you can differentiate yourselves compared to global peers.
Thank you very much for the question. This is Yuasa speaking. The 50% in dividend payout ratio could be a question. We do not have a clear target per se, whether 55% or 56%, but the point is that we will pay to shareholders 50%, and the remaining 50% will be used for growth and so forth. If there is any excess capital, we will repay in the form of share buyback. Generally speaking, I think the global peers are adopting that kind of approach. It is not that we are emulating our global peers, but this is something that will enable us to invest into new business areas. That is all from me.
Which means, so in fiscal 2023, which ends in 2024, your way of thinking will not change unless others will change?
Again, this is Yuasa speaking. It is not to say that we are eyeing our peers. What we want to do is to pay out 50%, and the remaining 50% will be, first of all, used for investment in growth, and we will be eyeing on ESR. As long as we are within the target range, or if we are to exceed target range, we will take a disciplined approach and conduct a share buyback. It would depend on the growth stage that the company will be in. Maybe we will revise our approach and policy, but the ultimate goal for now is that we think 50% dividend payout ratio is an appropriate level.
Understood. Thank you very much.
Next from Nomura Securities, we have Sasaki-san, please. Excuse me. We have Sasaki-san from Bank of America.
My name is Sasaki from Bank of America. I have one question. M&A business investment, I have some questions. This time, over the medium to longer term, your profit growth, you have a strong confidence over that. Compared to the past, the organic growth, are you less reliant on organic growth in order to achieve profit growth? Are you still considering some proactive M&A or business investment? For a while, I know that you will be doing both types of M&A, which you are not considering any specifics right now.
I know that you always have a short list and long list, and maybe the execution of the list, the probability is low. Does it mean that you have a difficulty finding companies that meet your standard? Is it that you do not really have the necessity to buy those companies? What is the reason that you are not considering any specific cases now?
This is Komiya speaking. I would like to answer your question. M&A, whether it is large scale or both types of M&A, doing M&A is not the purpose itself. It is only a means to do our business. It is partner dependent as well, whether if we can find a good partner or not, and also can we find such a good partner at the right timing or not is another factor. We have been doing risk diversification and reduce volatility and achieve profit growth at the same time. There is no change to that stance to business at all. The first step that we take in doing M&A is to list candidates.
From that stage, we go through a process, think process. We have the three principles in doing M&A. After acquiring them, we need to do a post-merger integration, and we will be disciplined throughout the process. The long list and short list management, we still have those lists. We do have discussions over those lists. Right now, as we speak today, compared to some of the large positions we have done in the past, we wonder if we can find a good candidate to fit under that large acquisition category, because we have gone through COVID-19, we are post COVID-19. We have to look at the intrinsic value of each company now that everybody has lived through COVID-19. That is what we are looking at for both types of M&A. As it was mentioned earlier, there are some companies who will be responsible between both types of M&A.
They are leading the process. We are learning from them. Holdings will be involved in the process. As for what exactly is happening now, that's what we are doing. The second point I want to emphasize is how we look at the M&A market. Looking at the global M&A market, I do believe it's still active. Augmenting competitiveness and sell-off of the non-core business, etc, are all happening. Including North America and Europe in this industry, there will be some busy movements in the M&A market. I'm expecting such activities to come. Of course, apart from that, we will keep our own strategy. We will continue to execute on our strategy. While we are sitting in that market, we have to look at the various chemical reactions happening in the market.
I'm sure we will come up with some good candidates, including both types of M&A candidates. Going forward, the conventional type of M&A is not the only type of M&A that we will do, but the new candidate, the new appetite, the new aspect, the new search process, we will try these new methodologies. The purpose is to diversify risk and reduce volatility and to have a firm base for growing profit. If there is a good M&A candidate contribute to that, we will consider such cases. But the way we stand is as I have explained.
I got it. Thank you for a detailed answer.
Thank you very much for the question.
With this, we would like to conclude part one, and we'd like to move to part two. I'm afraid we do not have much time left, so I think we'll be limited to a couple of questions. When we go into part two, we will have the responsible persons responding to performance of the business. Once again, I would like to ask you to please stick to one question per person. We would like to take questions for part two. Any questions? Mitsubishi UFJ Morgan Stanley. Correction. Tokai Tokyo, Majima-san, over to you.
I'm on Page 24. Page 42. Full year revised forecast. Towards the back, you have revised projections for this year. JPY 30 billion revised up against the original forecast and adjusted income plus of JPY 66 billion, and this difference represents domestic, especially the changes in underwriting results of the first year. My first question is the reason why you've made changes for the underwriting results for the first year and for international insurance, there's also a difference as well. For the Adjusted Net Income, why is there a difference for international business and also for underwriting results for the first year?
This is Nakai from TMNF. With regards to the reason why we revised the underwriting results for the first year. In terms of our basis, auto insurance, we revised the loss. Loss rate has been revised down. In relation to that, we have seen an increase in the pressure for underwriting results for the first year and therefore for financial accounting basis, we have made revisions.
Okay, thank you very much. How about for international business?
For international business, this is Tazoe from Tokio Marine Holdings, corporate accounting department. Page 26, in international business, JPY +35 billion. On Page 42, in accounting basis, JPY +21.4 billion. So there is a difference of about JPY 10 billion between the two. With regards to the difference in the financial accounting, there is goodwill appreciation, which has increased because of weak yen and also TMNF, the overseas business. Overseas liability division is included in the overseas business. Adjusted investment income is shown here. On Page 26, this is January to December basis.
Page 42, for net income basis, it is April to March figure, and the timing is different. The difference in timing is reflected in the difference in the figures. So it was a bit of a technical matter.
Thank you very much for that.
From Nomura Securities, Mr. Sakamaki, please.
My name is Sakamaki. Thank you for this opportunity. If I look at Page 26, the revised projections of Adjusted Net Income compared to the original projection within the others, we have other factors within the others. So there is JPY 50 billion for domestic and international put together. Of this, what are the one-off factors? Can you give me the breakdown of this difference of JPY 50 billion within the others?
From Tokio Marine Holdings, my name is Tazoe from the accounting department. If I look at Page 26, if you look at the others, for TMNF and international, what are the one-off factors within those numbers? Looking at the TMNF numbers, as it was mentioned, there was a COVID-19 impact where loss ratio improved. So that is a major one-off factor. So it is Mr. Komiya said earlier. For the international business, it was mentioned in other pages, centering around North America, we had some capital gain. In this material, we mentioned the number to be JPY 12 billion. So out of this JPY 46 billion, part of that is JPY 12 billion coming from capital gains. That concludes my answer.
For the international business, one factor is that we reduced the natural catastrophe underwriting reserve in Tokio Marine Asia. I believe you will not have this next year. Then the underlying earnings out of this JPY 46 billion, can I understand that to be about JPY 47 billion actually?
This is Tazoe speaking again from the accounting department of Tokio Marine Holdings. Of the JPY 47 billion, the Tokio Marine Asia impact is not included, but for the Tokio Marine Asia, interest rate is rising. The liability is being reduced. Although we were not including in the JPY 47 billion, this is not actually a big factor.
I understand. Thank you very much.
Thank you very much for that. Next question will be the last question. Tsujino-san from Mitsubishi UFJ Morgan Stanley.
Upside revision for North America. Investment income was quite positive. How much did that contribute to the upward revision for the North American performance? Or if you could give a breakdown by entity.
This is Nakano from International Business Development Department. I do not have a breakdown by entity that I can share at this moment. But realized investment income gains from investment is increasing, and also JPY 28 billion year-over-year. That's an upside. Sorry, correction. Compared to the guidance at the beginning of the year, JPY 28 billion upside.
JPY 28 billion. This is against plan?
Yes, against the original guidance. We are seeing an upside of JPY 28 billion.
Thank you very much. We are approaching the time to conclude this conference. We would now like to conclude this telephone conference. If you have any further questions or any clarifications, please contact us separately. Thank you very much for your participation today. Thank you.