Insurance/non-bank sector investment stance: June 2026

Research evidence excerpt

Insurance/non-bank sector investment stance: June 2026

11 June 2026

Mizuho Securities Equity Research Insurance

Industry Overview

Long-term ambition important, but near-term focus on stability

Senior Analyst: Summary

Naruhiko Sakamaki In light of recent earnings results and current economic trends, we rank

+81 3 6202 8476 the industry’s subsectors in the following order: non-life insurance ≥ life

naruhiko.sakamaki@mizuho-sc.com insurance > Orix > nonbanks. As the non-life insurance sector is still in a

phase of generating surplus capital, we think it has an advantage from the

standpoint of investment acceleration and shareholder returns. In the life

insurance sector, we see reduced upside potential for shareholder returns.

We think investors should take a positive view of the sector in the short

term given its attractive valuations stemming from the dividend yield spread

with the banking sector, and in the medium to long term given its stable

profit improvement. While Orix’s total payout ratio remains attractive, we

believe investors are also mindful of its high valuations. Among nonbanks,

consumer finance companies in particular have become less attractive from

an earnings perspective due to rising interest costs and a slowdown in new

customer acquisitions.

Investment rating changes: Upgrading MS&AD to Buy

While the companies have outlined their long-term goals, we think the first

step should be to evaluate changes expected in the near term. In the non-

life insurance sector, we expect differences in the direction of ROE among

the three companies to emerge due to variations in capital strategies. We

upgrade MS&AD to Buy as its investments are winding down and we expect

capital efficiency to improve. We downgrade Sompo Holdings to Neutral as