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Long-Duration Insurance Contracts Relating to Life Insurance Operations | 6 Months Ended
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Sep. 30, 2025
Insurance [Abstract] |
Long-Duration Insurance Contracts Relating to Life Insurance Operations |
18. | Long-Duration Insurance Contracts Relating to Life Insurance Operations
The following tables present balances of and changes in the liability for future policy benefits as of and for the fiscal year ended March 31, 2025 and for the six months ended September 30, 2025.
|  | Millions of yen |
|  | March 31, 2025 |  |  | September 30, 2025 |
Present value of expected net premiums |  | Yen-denominated insurance (First Sector) |  |  | Yen-denominated insurance (Third Sector) |  |  | Foreign currency denominated insurance |  |  | Yen-denominated insurance (First Sector) |  |  | Yen-denominated insurance (Third Sector) |  |  | Foreign currency denominated insurance |
Beginning balance |  | ¥ | 873,038 |  |  | ¥ | 1,306,719 |  |  | ¥ | 389,664 |  |  | ¥ | 855,431 |  |  | ¥ | 1,162,214 |  |  | ¥ | 345,932 |
Beginning balance at original discount rate |  |  | 858,959 |  |  |  | 1,289,145 |  |  |  | 424,186 |  |  |  | 877,300 |  |  |  | 1,216,705 |  |  |  | 368,846 |
Effect of changes in cash flow assumptions |  |  | (9,660 | ) |  |  | (7,648 | ) |  |  | 66 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Effect of actual variances from expected experience |  |  | 984 |  |  |  | 812 |  |  |  | (3,193 | ) |  |  | 300 |  |  |  | 699 |  |  |  | (579 | )
Adjusted beginning balance |  |  | 850,283 |  |  |  | 1,282,309 |  |  |  | 421,059 |  |  |  | 877,600 |  |  |  | 1,217,404 |  |  |  | 368,267 |
Issuances |  |  | 130,605 |  |  |  | 34,189 |  |  |  | 31,717 |  |  |  | 47,401 |  |  |  | 12,013 |  |  |  | 15,370 |
Interests |  |  | 10,568 |  |  |  | 17,489 |  |  |  | 12,323 |  |  |  | 5,278 |  |  |  | 8,423 |  |  |  | 5,480 |
Net premium earned |  |  | (116,850 | ) |  |  | (116,049 | ) |  |  | (62,788 | ) |  |  | (55,184 | ) |  |  | (56,025 | ) |  |  | (33,271 | )
Actual variances from cash flow assumptions |  |  | (437 | ) |  |  | (770 | ) |  |  | (1,231 | ) |  |  | (28 | ) |  |  | (332 | ) |  |  | (273 | )
Derecognition |  |  | 3,131 |  |  |  | (463 | ) |  |  | (27,567 | ) |  |  | 4,541 |  |  |  | 2,746 |  |  |  | (5,544 | )
Effect of changes in foreign exchange rate |  |  | 0 |  |  |  | 0 |  |  |  | (4,667 | ) |  |  | 0 |  |  |  | 0 |  |  |  | (1,903 | )
Ending balance at original discount rate |  |  | 877,300 |  |  |  | 1,216,705 |  |  |  | 368,846 |  |  |  | 879,608 |  |  |  | 1,184,229 |  |  |  | 348,126 |
Effect of changes in discount rates |  |  | (21,869 | ) |  |  | (54,491 | ) |  |  | (22,914 | ) |  |  | (50,761 | ) |  |  | (130,409 | ) |  |  | (15,559 | )
Ending balance |  | ¥ | 855,431 |  |  | ¥ | 1,162,214 |  |  | ¥ | 345,932 |  |  | ¥ | 828,847 |  |  | ¥ | 1,053,820 |  |  | ¥ | 332,567 |
|  | Millions of yen |
|  | March 31, 2025 |  |  | September 30, 2025 |
Present value of expected future policy benefits |  | Yen-denominated insurance (First Sector) |  |  | Yen-denominated insurance (Third Sector) |  |  | Foreign currency denominated insurance |  |  | Yen-denominated insurance (First Sector) |  |  | Yen-denominated insurance (Third Sector) |  |  | Foreign currency denominated insurance |
Beginning balance |  | ¥ | 1,565,877 |  |  | ¥ | 1,844,599 |  |  | ¥ | 447,081 |  |  | ¥ | 1,511,436 |  |  | ¥ | 1,659,960 |  |  | ¥ | 442,939 |
Beginning balance at original discount rate |  |  | 1,658,143 |  |  |  | 1,895,730 |  |  |  | 659,217 |  |  |  | 1,750,912 |  |  |  | 1,878,075 |  |  |  | 650,005 |
Effect of changes in cash flow assumptions |  |  | (10,284 | ) |  |  | (8,470 | ) |  |  | 81 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Adjusted beginning balance |  |  | 1,647,859 |  |  |  | 1,887,260 |  |  |  | 659,298 |  |  |  | 1,750,912 |  |  |  | 1,878,075 |  |  |  | 650,005 |
Issuances |  |  | 130,605 |  |  |  | 34,189 |  |  |  | 31,717 |  |  |  | 47,401 |  |  |  | 12,013 |  |  |  | 15,370 |
Interests |  |  | 24,463 |  |  |  | 27,997 |  |  |  | 19,385 |  |  |  | 12,567 |  |  |  | 13,967 |  |  |  | 9,471 |
Insurance claims paid |  |  | (57,099 | ) |  |  | (72,044 | ) |  |  | (18,634 | ) |  |  | (28,419 | ) |  |  | (38,033 | ) |  |  | (6,179 | )
Actual variances from cash flow assumptions |  |  | (9,571 | ) |  |  | (8,287 | ) |  |  | 13,086 |  |  |  | (6,523 | ) |  |  | (2,953 | ) |  |  | 3,180 |
Derecognition |  |  | 14,655 |  |  |  | 8,960 |  |  |  | (46,693 | ) |  |  | 11,387 |  |  |  | 8,007 |  |  |  | (10,108 | )
Effect of changes in foreign exchange rate |  |  | 0 |  |  |  | 0 |  |  |  | (8,154 | ) |  |  | 0 |  |  |  | 0 |  |  |  | (2,571 | )
Ending balance at original discount rate |  |  | 1,750,912 |  |  |  | 1,878,075 |  |  |  | 650,005 |  |  |  | 1,787,325 |  |  |  | 1,871,076 |  |  |  | 659,168 |
Effect of changes in discount rates |  |  | (239,476 | ) |  |  | (218,115 | ) |  |  | (207,066 | ) |  |  | (503,309 | ) |  |  | (490,118 | ) |  |  | (188,604 | )
Ending balance |  | ¥ | 1,511,436 |  |  | ¥ | 1,659,960 |  |  | ¥ | 442,939 |  |  | ¥ | 1,284,016 |  |  | ¥ | 1,380,958 |  |  | ¥ | 470,564 |
Net liability for future policy benefits |  | ¥ | 656,005 |  |  | ¥ | 497,746 |  |  | ¥ | 97,007 |  |  | ¥ | 455,169 |  |  | ¥ | 327,138 |  |  | ¥ | 137,997 |
Deferred profit liabilities |  |  | 61,448 |  |  |  | 74,962 |  |  |  | 37,340 |  |  |  | 69,235 |  |  |  | 77,943 |  |  |  | 43,995 |
Subtotal |  |  | 717,453 |  |  |  | 572,708 |  |  |  | 134,347 |  |  |  | 524,404 |  |  |  | 405,081 |  |  |  | 181,992 |
Less: Reinsurance recoverable |  |  | 196 |  |  |  | 0 |  |  |  | 0 |  |  |  | 128 |  |  |  | 0 |  |  |  | 0 |
The liability for future policy benefits, after reinsurance recoverable |  | ¥ | 717,257 |  |  | ¥ | 572,708 |  |  | ¥ | 134,347 |  |  | ¥ | 524,276 |  |  | ¥ | 405,081 |  |  | ¥ | 181,992 |
The following tables provide the breakdown of the policy liabilities and policy account balances recorded in the consolidated balance sheets as of March 31, 2025 and September 30, 2025:
|  | Millions of yen |
|  | March 31, 2025 |  |  | September 30, 2025 |
Yen-denominated insurance (First Sector) |  | ¥ | 717,257 |  |  | ¥ | 524,276 |
Yen-denominated insurance (Third Sector) |  |  | 572,708 |  |  |  | 405,081 |
Foreign currency denominated insurance |  |  | 134,347 |  |  |  | 181,992 |
Subtotal |  |  | 1,424,312 |  |  |  | 1,111,349 |
Policy account balances for single-payment whole life insurance |  |  | 134,572 |  |  |  | 238,337 |
Fixed annuities and annuitization benefits |  |  | 119,093 |  |  |  | 110,259 |
Policy account balances for variable annuity and variable life insurance contracts and market risk benefits |  |  | 136,257 |  |  |  | 142,700 |
Others* |  |  | 133,813 |  |  |  | 122,183 |
Total |  | ¥ | 1,948,047 |  |  | ¥ | 1,724,828 |
* | Others include unearned premiums and liabilities for unpaid claims.
The amount of undiscounted and discounted expected future gross premiums and expected future policy benefits and expenses as of March 31, 2025 and September 30, 2025 are as follows:
|  | Millions of yen |
|  | March 31, 2025 |  |  | September 30, 2025 |
|  | Undiscounted |  |  | Discounted |  |  | Undiscounted |  |  | Discounted |
Yen-denominated insurance (First Sector) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Expected future gross premiums |  | ¥ | 1,551,749 |  |  | ¥ | 1,362,111 |  |  | ¥ | 1,574,161 |  |  | ¥ | 1,330,807 |
Expected future policy benefits and expenses |  |  | 2,532,638 |  |  |  | 1,511,436 |  |  |  | 2,614,139 |  |  |  | 1,284,016 |
Yen-denominated insurance (Third Sector) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Expected future gross premiums |  |  | 2,456,942 |  |  |  | 2,003,392 |  |  |  | 2,398,826 |  |  |  | 1,819,478 |
Expected future policy benefits and expenses |  |  | 2,552,133 |  |  |  | 1,659,960 |  |  |  | 2,544,303 |  |  |  | 1,380,958 |
Foreign currency denominated insurance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Expected future gross premiums |  |  | 617,771 |  |  |  | 493,328 |  |  |  | 594,234 |  |  |  | 483,039 |
Expected future policy benefits and expenses |  |  | 1,288,727 |  |  |  | 442,939 |  |  |  | 1,309,972 |  |  |  | 470,564 |
For the fiscal year ended March 31, 2025 and the six months ended September 30, 2025, the effects of net premium exceeding gross premiums in certain cohorts are immaterial in earnings for the respective periods. The amounts of gross premiums and interest expense recognized in the consolidated statement of income for the six months ended September 30, 2024 and 2025 are as follows:
|  | Millions of yen |
|  | Six months ended September 30, 2024 |  |  | Six months ended September 30, 2025 |
|  | Gross premiums |  |  | Interest expense |  |  | Gross premiums |  |  | Interest expense |
Yen-denominated insurance (First Sector) |  | ¥ | 81,607 |  |  | ¥ | 6,856 |  |  | ¥ | 89,337 |  |  | ¥ | 7,289 |
Yen-denominated insurance (Third Sector) |  |  | 99,898 |  |  |  | 5,163 |  |  |  | 96,721 |  |  |  | 5,543 |
Foreign currency denominated insurance |  |  | 47,059 |  |  |  | 3,329 |  |  |  | 47,078 |  |  |  | 3,992 |
Total |  | ¥ | 228,564 |  |  | ¥ | 15,348 |  |  | ¥ | 233,136 |  |  | ¥ | 16,824 |
The weighted average discount rates for the liability for future policy benefits as of March 31, 2025 and September 30, 2025 are as follows:
|  | Weighted average rate |
|  | March 31, 2025 |  |  | September 30, 2025 |
Yen-denominated insurance (First Sector) |  |  |  |  |  |  |  |
Weighted average of the original discount rates |  |  | 1.8 | % |  |  | 1.8 | %
Weighted average of the current discount rates |  |  | 2.7 |  |  |  | 4.5 |
Yen-denominated insurance (Third Sector) |  |  |  |  |  |  |  |
Weighted average of the original discount rates |  |  | 1.7 |  |  |  | 1.7 |
Weighted average of the current discount rates |  |  | 2.7 |  |  |  | 4.5 |
Foreign currency denominated insurance |  |  |  |  |  |  |  |
Weighted average of the original discount rates |  |  | 3.3 |  |  |  | 3.4 |
Weighted average of the current discount rates |  |  | 5.9 |  |  |  | 5.7 |
The weighted average duration of the liability for future policy benefit as of March 31, 2025 and September 30, 2025 are as follows:
|  | Years |
|  | March 31, 2025 |  |  | September 30, 2025 |
Yen-denominated insurance (First Sector) |  |  | 35.1 |  |  |  | 34.5 |
Yen-denominated insurance (Third Sector) |  |  | 32.5 |  |  |  | 31.6 |
Foreign currency denominated insurance |  |  | 33.5 |  |  |  | 31.9 |
Assumptions for calculating the liability for future policy benefits include assumptions related to mortality, morbidity, lapse rates and discount rates. The Company and its subsidiaries recognized actual variances from expected experience and updated the assumptions during the fiscal year ended March 31, 2025 as follows. For the six months ended September 30, 2025, the Company and its subsidiaries continued to use the same assumptions.
| • |  | Yen-denominated insurance (First Sector)
During fiscal 2025 the Company and its subsidiaries updated expected mortality and lapse rates due to the higher-than-expected mortality and lapse rates.
| • |  | Yen-denominated insurance (Third Sector)
During fiscal 2025 the Company and its subsidiaries updated expected mortality and lapse rates due to a higher-than-expected mortality and lapse rates. The actual morbidity excluding deemed hospitalization was lower-than-expected even after reclassification of the legal category of COVID-19 by Japanese government. However, the relevant morbidity assumptions were not updated because the Company and its subsidiaries believe further observations are needed to determine whether such phenomenon is temporary or permanent.
| • |  | Foreign currency denominated insurance
During fiscal 2025 the Company and its subsidiaries updated expected mortality rates due to the difference from expected mortality rates. In addition, similarly to the fiscal year ended March 31, 2024, the lapse rate was higher-than-expected due to the impact of rapid exchange rate fluctuations. However, the relevant lapse rates were not updated because the Company and its subsidiaries believe further observations are needed to determine whether such an assumption is temporary or permanent. The market data underlying the discount rate was updated quarterly for both the fiscal year ended March 31, 2025 and for the six months ended September 30, 2025. For the effect of the changes in assumptions on expected net premiums and expected future policy benefits, see “Effect of changes in cash flow assumptions” and “Effect of changes in discount rates” in the tables that represent balances of and changes in the liability for future policy benefits. The following tables present balances of and changes in the deferred policy acquisition costs as of and for the fiscal year ended March 31, 2025 and for the six months ended September 30, 2025:
|  | Millions of yen |
|  | March 31, 2025 |
|  | Yen-denominated insurance (First Sector) |  |  | Yen-denominated insurance (Third Sector) |  |  | Foreign currency denominated insurance |  |  | Single- payment whole life insurance |  |  | Total |
Beginning balance |  | ¥ | 82,341 |  |  | ¥ | 169,581 |  |  | ¥ | 53,812 |  |  | ¥ | 0 |  |  | ¥ | 305,734 |
Capitalization |  |  | 13,431 |  |  |  | 9,180 |  |  |  | 6,633 |  |  |  | 6,627 |  |  |  | 35,871 |
Amortization |  |  | (6,411 | ) |  |  | (10,072 | ) |  |  | (2,689 | ) |  |  | (43 | ) |  |  | (19,215 | )
Effect of changes in foreign exchange rate |  |  | 0 |  |  |  | 0 |  |  |  | (605 | ) |  |  | (137 | ) |  |  | (742 | )
Others* |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (5,808 | ) |  |  | (5,808 | )
Ending balance |  | ¥ | 89,361 |  |  | ¥ | 168,689 |  |  | ¥ | 57,151 |  |  | ¥ | 639 |  |  | ¥ | 315,840 |
|  | Millions of yen |
|  | September 30, 2025 |
|  | Yen-denominated insurance (First Sector) |  |  | Yen-denominated insurance (Third Sector) |  |  | Foreign currency denominated insurance |  |  | Single- payment whole life insurance |  |  | Total |
Beginning balance |  | ¥ | 89,361 |  |  | ¥ | 168,689 |  |  | ¥ | 57,151 |  |  | ¥ | 639 |  |  | ¥ | 315,840 |
Capitalization |  |  | 7,085 |  |  |  | 3,923 |  |  |  | 3,206 |  |  |  | 4,793 |  |  |  | 19,007 |
Amortization |  |  | (3,421 | ) |  |  | (5,040 | ) |  |  | (1,371 | ) |  |  | (217 | ) |  |  | (10,049 | )
Effect of changes in foreign exchange rate |  |  | 0 |  |  |  | 0 |  |  |  | (203 | ) |  |  | 5,853 |  |  |  | 5,650 |
Others* |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (9,943 | ) |  |  | (9,943 | )
Ending balance |  | ¥ | 93,025 |  |  | ¥ | 167,572 |  |  | ¥ | 58,783 |  |  | ¥ | 1,125 |  |  | ¥ | 320,505 |
* | Others include adjustments of reinsurance.
Deferred policy acquisition costs are amortized over the expected term of the policies on a constant-level basis. The assumptions used for the amortization of deferred policy acquisition costs are consistent with the assumptions for the liability for future policy benefits. The underlying assumptions for deferred policy acquisition costs and the liability for future policy benefits are updated at the same time. In addition, deferred policy acquisition costs are included in other assets in the consolidated balance sheets. The following table presents policy account balances for single-payment whole life insurance and fixed annuity and annuitization benefits by range of minimum guaranteed interest rates as of March 31, 2025 and September 30, 2025.
|  | Millions of yen |
|  | March 31, 2025 |
|  |  |  |  | Above minimum guarantees |
Range of minimum guaranteed interest rates |  | Minimum guarantees |  |  | 50-150bp |  |  | 150bp or more |
0.00 % - less than 1.50 % |  | ¥ | 111,626 |  |  | ¥ | 7,421 |  |  | ¥ | 127,151 |
1.50 % or more |  |  | 7,467 |  |  |  | 0 |  |  |  | 0 |
Total |  | ¥ | 119,093 |  |  | ¥ | 7,421 |  |  | ¥ | 127,151 |
|  | Millions of yen |
|  | September 30, 2025 |
|  |  |  |  | Above minimum guarantees |
Range of minimum guaranteed interest rates |  | Minimum guarantees |  |  | 50-150bp |  |  | 150bp or more |
0.00 % - less than 1.50 % |  | ¥ | 102,794 |  |  | ¥ | 15,861 |  |  | ¥ | 222,476 |
1.50 % or more |  |  | 7,465 |  |  |  | 0 |  |  |  | 0 |
Total |  | ¥ | 110,259 |  |  | ¥ | 15,861 |  |  | ¥ | 222,476 |
The following table provides information about single-payment whole life insurance for the fiscal year ended March 31, 2025 and for the six months ended September 30, 2025.
|  | Millions of yen |
|  | March 31, 2025 |  |  | September 30, 2025 |
Beginning balance |  | ¥ | 0 |  |  | ¥ | 134,572 |
New contract |  |  | 136,863 |  |  |  | 99,129 |
Surrenders and partial surrenders |  |  | (66 | ) |  |  | (284 | )
Benefit payments and lump sum payments, etc. |  |  | (49 | ) |  |  | (332 | )
Policy charges |  |  | (188 | ) |  |  | (832 | )
Interests |  |  | 1,072 |  |  |  | 4,705 |
Effect of changes in foreign exchange rate |  |  | (3,060 | ) |  |  | 1,379 |
Ending balance |  | ¥ | 134,572 |  |  | ¥ | 238,337 |
|  | March 31, 2025 |  |  | September 30, 2025 |
Weighted average guaranteed interest rate (%) |  |  | 3.9 |  |  |  | 5.1 |
Benefits in excess of policy account balances (Millions of yen) |  | ¥ | 0 |  |  | ¥ | 0 |
Cash surrender value (Millions of yen) |  |  | 127,659 |  |  |  | 230,259 |
The following table provides information about fixed annuity and annuitization benefits for the fiscal year ended March 31, 2025 and for the six months ended September 30, 2025.
|  | Millions of yen |
|  | March 31, 2025 |  |  | September 30, 2025 |
Beginning balance |  | ¥ | 138,419 |  |  | ¥ | 119,093 |
Transfer in |  |  | 9,381 |  |  |  | 4,657 |
Surrenders and partial surrenders |  |  | (85 | ) |  |  | (24 | )
Benefit payments and lump sum payments, etc. |  |  | (28,912 | ) |  |  | (13,521 | )
Policy charges |  |  | (214 | ) |  |  | (103 | )
Transfer out |  |  | (373 | ) |  |  | (239 | )
Interests |  |  | 895 |  |  |  | 406 |
Others |  |  | (18 | ) |  |  | (10 | )
Ending balance |  | ¥ | 119,093 |  |  | ¥ | 110,259 |
|  | March 31, 2025 |  |  | September 30, 2025 |
Weighted average guaranteed interest rate (%) |  |  | 0.7 |  |  |  | 0.7 |
Benefits in excess of policy account balances (Millions of yen) |  | ¥ | 0 |  |  | ¥ | 0 |
Cash surrender value (Millions of yen) |  |  | 113,492 |  |  |  | 104,798 |
The following table provides information about policy account balances for variable annuity and variable life insurance contracts and market risk benefits as of and for the fiscal year ended March 31, 2025, and for the six months ended September 30, 2025:
|  | Millions of yen |
|  | March 31, 2025 |  |  | September 30, 2025 |
Beginning balance |  | ¥ | 167,207 |  |  | ¥ | 136,257 |
Effect of changes other than through net income and other comprehensive income |  |  | (23,706 | ) |  |  | (10,571 | )
Surrenders and withdrawals |  |  | (4,924 | ) |  |  | (2,366 | )
Transfer in |  |  | (6,902 | ) |  |  | (3,163 | )
Benefit payments |  |  | (11,851 | ) |  |  | (4,957 | )
Others |  |  | (29 | ) |  |  | (85 | )
Changes through net income |  |  | (7,292 | ) |  |  | 17,278 |
Effect of changes in fair value of corresponding investment assets |  |  | (3,538 | ) |  |  | 21,719 |
Fee income |  |  | (3,590 | ) |  |  | (1,636 | )
Effect of changes in fair value of market risk benefits |  |  | (164 | ) |  |  | (2,805 | )
Changes through other comprehensive income |  |  | 48 |  |  |  | (264 | )
Effect of changes in the instrument-specific credit risk |  |  | 48 |  |  |  | (264 | )
Ending balance |  | ¥ | 136,257 |  |  | ¥ | 142,700 |
|  | Millions of yen |
|  | March 31, 2025 |  |  | September 30, 2025 |
Policy account balances |  | ¥ | 136,662 |  |  | ¥ | 146,174 |
Market risk benefits |  |  | (405 | ) |  |  | (3,474 | )
Total |  | ¥ | 136,257 |  |  | ¥ | 142,700 |

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- Definition Long duration insurance contracts relating to life insurance operations. + References No definition available. + Details
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- References No definition available. + Details
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Namespace Prefix: | us-gaap_
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Balance Type: | na
Period Type: | duration