Nippon Insure（5843 TSE Standard）
＋English Summary on This Page
Engaged in Guarantee Business Centered on Rent Debt Guarantee Services
Nippon Insure specializes in the guarantee business and is a member of a franchise that operates coin-operated laundries and fitness clubs. The guarantee business accounted for 92.5% of net sales in fiscal year ended September 2022, while other businesses accounted for 7.5%.
The guarantee business provides debt guarantee services for rental housing, nursing care expense debt guarantee services, and hospitalization fee debt guarantee services. About 90% of revenue from this business segment comes from rent debt guarantee services.
The rent debt guarantee service provides a service that also serves as a joint guarantor for tenants in rental housing lease agreements. The company receives applications from potential tenants who wish to move into a property through a real estate management company and conducts an evaluation to determine whether a contract is possible with the tenants. When a tenant is delinquent on rent, the company performs subrogated payments to the real estate management company and collects the rent that was subrogated from the delinquent tenant.
The rent debt guarantee service plan is based on three types of guarantees: residential use, business use and parking lot/container use. The estimate is that residential use accounts for the majority of revenue, while business use accounts for about 30%. In addition, about two-thirds of revenue is spot-type revenue which is the initial guarantee fee, and about one-third is stock-type revenue such as renewal guarantee fees. Since stock-type revenue increases over time and initial guarantee fees and renewal guarantee fees are prorated to net sales over the contracted period rather than when they were received, it is easy to forecast the company’s business performance.
In its nursing expense debt guarantee service, a nursing facility user and Nippon Insure conclude a guarantee consignment agreement. Since the company becomes a joint guarantor for the facility user, it assumes the risk of delinquency, such as for nursing facility usage fees. In the hospitalization expense debt guarantee service, the company undertakes the risk of unpaid hospitalization expenses by becoming a joint guarantor of a hospitalized person.