Tokio Marine Holdings has reduced its earnings outlook by 9.5% for the year to March 31 following a sharp decline in half-year net profit.

The Japanese insurer expects a full-year net profit of ¥296 billion ($3.36 billion) amid higher claims stemming from natural disasters in its domestic non-life underwriting business.

It says weak economic conditions in Japan and China, which negated improvements in the US and Europe, are to blame for a 40.1% decline in half-year net profit to ¥85.6 billion ($968.83 million).

Underwriting income grew to ¥1.95 trillion ($22.07 billion) in the six months from ¥1.81 trillion ($20.47 billion) in the corresponding period last year.

Underwriting expenses increased to ¥1.7 trillion ($19.24 billion) from ¥1.64 trillion ($18.56 billion).

Tokio Marine is the parent of Tokio Marine & Nichido Fire Insurance, Nisshin Fire & Marine, E.design insurance and Tokio Marine & Nichido Life Insurance.

Last month the company completed the $US7.5 billion ($10.44 billion) acquisition of US-based insurer HCC Holdings.