MS&AD Insurance Lags Tokio Marine in Efficiency, but Its Valuation Is Less Stretched Than Peers

We think Japan’s nonlife insurance sector has more appeal as a long-term investment than most other areas of Japanese finance because industrywide return on assets, or ROA, has roughly doubled after the last round of industry consolidation in 2010. Three firms—Tokio Marine, MS&AD, and Sompo—control around 88% of the market, and only three others (AIG, the nonlife unit of an agricultural cooperative insurer, and Sony Assurance) have even 1% shares.