Income and Expenses Relating to Life Insurance Operations

6 Months Ended

Sep. 30, 2023

Income and Expenses Relating to Life Insurance Operations

17.	Income and Expenses Relating to Life Insurance Operations

Life insurance premiums and related investment income for the six and three months ended September 30, 2022 and 2023 consist of the following:


	Millions of yen
	Six months ended September 30, 2022		Six months ended September 30, 2023
Life insurance premiums	¥	220,762	¥	222,783
Life insurance related investment income*		42,449		62,955

	¥	263,211	¥	285,738

*	Life insurance related investment income for the six months ended September 30, 2022 and 2023 include net unrealized holding a loss of ¥9,465 million and a gain of ¥18,115 million on equity securities held as of September 30, 2022 and 2023, respectively.


	Millions of yen
	Three months ended September 30, 2022		Three months ended September 30, 2023
Life insurance premiums	¥	117,752	¥	117,474
Life insurance related investment income*		19,182		15,746

	¥	136,934	¥	133,220

*	Life insurance related investment income for the three months ended September 30, 2022 and 2023 include net unrealized holding a loss of ¥1,222 million and a gain of ¥55 million on equity securities held as of September 30, 2022 and 2023, respectively.

Life insurance premiums include reinsurance benefits, net of reinsurance premiums. For the six and three months ended September 30, 2022 and 2023, reinsurance benefits and reinsurance premiums included in life insurance premiums are as follows:


	Millions of yen
	Six months ended September 30, 2022			Six months ended September 30, 2023
Reinsurance benefits	¥	657		¥	1,277
Reinsurance premiums		(2,390	)		(2,373	)

	Millions of yen
	Three months ended September 30, 2022			Three months ended September 30, 2023
Reinsurance benefits	¥	344		¥	666
Reinsurance premiums		(1,199	)		(1,203	)

Life insurance premiums and related investment income include net realized and unrealized gains or losses from investment assets under management on behalf of variable annuity and variable life policyholders, and net gains or losses from derivative contracts, which consist of gains or losses from futures and foreign exchange contracts, entered to economically hedge a portion of the minimum guarantee risk relating to variable annuity and variable life insurance contracts. In addition, the fair value option was elected for the entire variable annuity and variable life insurance contracts to offset earnings recognized for gains or losses from the investment assets managed on behalf of variable annuity and variable life policyholders, derivative contracts and the changes in the fair value of reinsurance contracts. Life insurance costs include the net amount of the changes in fair value of the variable annuity and variable life insurance contracts for which the fair value option was elected and insurance costs recognized for insurance and annuity payouts as a result of insured events. Certain subsidiaries have elected the fair value option for certain reinsurance contracts to partially offset the changes in fair value recognized in earnings of the policy liabilities and policy account balances attributable to the changes in the minimum guarantee risks of the variable annuity and variable life insurance contracts, and the changes in the fair value of the reinsurance contracts were recorded in life insurance costs.

The portion of the total change in the fair value of variable annuity and variable life insurance contracts that results from a change in the instrument-specific credit risk is recognized in other comprehensive income (loss), net of applicable income taxes.

The above mentioned gains or losses relating to variable annuity and variable life insurance contracts for the six and three months ended September 30, 2022 and 2023 are mainly as follows:


	Millions of yen
	Six months ended September 30, 2022			Six months ended September 30, 2023
Life insurance premiums and related investment income :
Net realized and unrealized gains or losses from investment assets	¥	(11,820	)	¥	15,512
Net gains or losses from derivative contracts :		252			(1,971	)
Futures		852			(1,557	)
Foreign exchange contracts		(600	)		(414	)

Life insurance costs :
Changes in the fair value of the policy liabilities and policy account balances	¥	(28,645	)	¥	(3,727	)
Insurance costs recognized for insurance and annuity payouts as a result of insured events		16,966			13,848
Changes in the fair value of the reinsurance contracts		(488	)		1,006

	Millions of yen
	Three months ended September 30, 2022			Three months ended September 30, 2023
Life insurance premiums and related investment income :
Net realized and unrealized gains or losses from investment assets	¥	(1,259	)	¥	(1,590	)
Net gains or losses from derivative contracts :		(1	)		(242	)
Futures		173			(150	)
Foreign exchange contracts		(174	)		(92	)

Life insurance costs :
Changes in the fair value of the policy liabilities and policy account balances	¥	(10,508	)	¥	(10,501	)
Insurance costs recognized for insurance and annuity payouts as a result of insured events		8,304			7,473
Changes in the fair value of the reinsurance contracts		30			206