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0:00:00.0 May 2015 Tokio Marine Holdings, Inc. Tokio Marine Group New Mid-Term Business Plan “To Be a Good Company 2017” 0:00:30.5 1 Review of the Previous Mid-Term Business Plan : “Innovation and Execution 2014” b Business Strategy for Sustainable Profit Growth   - Domestic Non-Life / Domestic Life / International Insurance / Financial and General a Corporate Strategy to Create Value  - Objectives of the New Mid-Term Business Plan   Enhance capital efficiency / Sustainable profit growth / Enhance shareholder returns - Promote strong ERM / Group asset management strategy Table of Contents 1 New Mid-Term Business Plan : “To Be a Good Company 2017” 2 1 2 ◆Abbreviations used in this material TMNF : Tokio Marine & Nichido Fire Insurance Co., Ltd. NF : Nisshin Fire & Marine Insurance Co., Ltd. TMNL : Tokio Marine & Nichido Life Insurance Co., Ltd. FL : Former Tokio Marine & Nichido Financial Life Insurance Co., Ltd. Summary of the New Mid-Term Business Plan 3 0:01:02.8 1 Review of the Previous Mid-Term Business Plan ”Innovation and Execution 2014” 2 0:01:18.5 Accomplished our objectives of “expanding profit” and “enhancing capital efficiency” Enhancing capital efficiency Expanding shareholder returns + + Expanding profit Adjusted ROE Adjusted earnings DPS (Dividends per share) Share repurchases Executed share repurchases of \50B in 2H FY2014 3 1-1. Review of the Previous Mid-Term Business Plan +431.5 2011 2012 2013 2014 -19.5 278.1 209.1 412.0 billion yen 34% 28% Domestic non-life International insurance Domestic life 412.0 billion yen +10.0pt 9.3% 6.7% 7.6% - 0.7% 50 70 55 +45 yen 95 yen Initial target 230 -260 2011 2012 2013 2014 Plan 2011 2012 2013 2014 0:03:00.5 4 1-2. Review of the Previous Mid-Term Business Plan Domestic non-life Domestic life International insurance Adjusted ROE C/R 95% Industry-leading premium growth Aggregate EV increase of \180B (3 year total) Adjusted earnings of \100B ≧7% Improve profitability mainly in auto Sustainable profit growth Sustainable profit growth Exceed our cost of capital Achieved all quantitative targets in both Group total and each business domain Targets Achievement Result - 0.7% 7.6% 6.7% 103.8% 97.2% 99.6% 357.5** 537.3 642.8 736.2 \869.3B - 11.9 69.2 136.9 * TMNF E/I basis C/R ** Excluding capital transactions 9.3% 90.6%* \145.5B 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 2013 2014 Improve combined ratio of domestic non-life Realize industry-leading premium growth by strengthening customer contact Achieve sustainable growth in domestic life and international insurance businesses Pursue new growth opportunities by investing in new businesses Continuously reduce the risks associated with business-related equities Invest in new businesses with high capital efficiency Enhance global risk diversification Adjust to an appropriate level of capital through dividends and flexible share repurchases 5 1-3. Review of the Previous Mid-Term Business Plan Expanding profit Enhancing capital efficiency Improved profitability of domestic non-life which was the priority issue, mainly in auto insurance. In addition, achieved industry-leading premium growth through effective implementation of growth strategies Domestic life realized stable profit growth by focusing on living-protection products International insurance also achieved significant profit growth by promoting growth strategies both in developed and emerging markets As a result, we constructed a well-balanced business portfolio which contributed to the stability and growth of profit Executed sales of business-related equities as planned (\336B in three years total) Advanced our business and geographical diversification of underwriting risks on a Group basis through steady growth of domestic life and international insurance businesses Significantly increased dividends level in line with profit growth. Executed adjustment of capital through share repurchases As a result, ROE reached to a level exceeding our cost of capital Key strategies Review / Achievements 0:06:08.7 2 New Mid-Term Business Plan “To Be a Good Company 2017” 6 0:06:26.3 7 Changes in domestic market due to demographic changes in Japan Changes of customer needs and risks due to various technological innovations Changes in global economy and financial environment Reached ROE level exceeding our cost of capital Recovery of profit base in the home market Constructed a well-balanced business portfolio which contributed to the stability and growth of profit Business environment - External - Shifting to the stage of sustainable profit growth and higher ROE while maintaining financial soundness Refining business strategies to prepare for changing environments Advancing our business platform which sustains continuous value creation 2-1. Business Environment and Issues Acknowledged From “profit recovery” to “sustainable profit growth” Business environment - Internal - Climate change and more frequent natural disasters Strengthening of global regulation and supervision 0:07:50.2 2020~ Profit recovery stage Sustainable profit growth stage Long-term Vision and New Mid-Term Business Plan "To Be a Good Company 2017" 2012 2015 2017 2014 "Innovation and Execution 2014" ~Achieve an ROE exceeding our cost of capital~ Unlocking our potential Capitalizing on changes Pursuing growth opportunities Advancing our business platform Structural reform to profitable business Innovative changes for well-balanced business portfolio Long-term vision “To Be a Good Company 2017” ~Evolve business structure to realize sustainable profit growth and higher ROE~ New Mid-Term Business Plan 8 A global insurance group that delivers sustainable growth by providing safety and security to customers worldwide - Our timeless endeavor to be a Good Company - Aiming for globally competitive-level earnings growth and capital efficiency  ~Drive ROE towards double-digit sphere~ 2-2. 0:08:59.9 2-3. Initiatives for “Sustainable Profit Growth” 9 Advancing ERM and improving risk portfolio to sustainably and comprehensively enhance profit growth, capital efficiency, and financial soundness Strengthening our business platform to further reinforce our globalized business Developing a diverse workforce with a strong customer orientation to drive sustainable growth Domestic insurance: Enhancing the integrated business model for life and non-life, strengthening claims-service capabilities, and further utilizing our risk consulting service International insurance: Enhancing organic growth Effectively forecasting and proactively meeting the emerging and evolving needs of the market and our customers Strengthening R&D to convert new risks into our business opportunities Unlocking our potential Capitalizing on changes Pursuing growth opportunities Excellence Advancing our business platform Enhancement Expansion Promoting disciplined business investment to capture growth opportunities globally Enhancing our diversified business portfolio based on risk appetite Unlocking our potential Capitalizing on changes Pursuing growth opportunities Unlocking our potential Capitalizing on changes Unlocking our potential Capitalizing on changes Pursuing growth opportunities Unlocking our potential Capitalizing on changes Advancing our business platform Pursuing growth opportunities Unlocking our potential Capitalizing on changes Evolution 0:10:13.4 Generate capital and cash Enterprise Risk Management (ERM) Efficient deployment of capital and cash Improve capital efficiency by diversifying our business portfolio Framework of the New Mid-Term Business Plan and Group Management Improve the risk portfolio Reduce the risks associated with business-related equities Strengthen control of natural catastrophe risks Sustainable profit growth Enhance ROE Maintain financial soundness Invest for growth Invest in new businesses with high capital efficiency Invest today to build foundations for our growth tomorrow Return to shareholders Increase dividends through profit growth Achieve an appropriate level of capital via flexible repurchases of shares Enhancing Enterprise Risk Management (ERM) to realize sustainable profit growth and higher capital efficiency even in a changing environment, while maintaining financial soundness Achieve sustainable profit growth and improve the risk portfolio in each business domain Achieve sustainable profit growth in each business domain Domestic non-life : Profit growth as the core business of the Group Domestic life : Profit growth while maintaining financial soundness as a growth driver of the Group International insurance: Profit growth while globally diversifying risks as a growth driver of the Group + + 10 2-4. 11 (blank page) 0:10:38.7 a 12 Corporate Strategy to Create Value 0:10:51.2 13 a-1. Objectives of the New Mid-Term Business Plan Enhance capital efficiency Adjusted ROE : approx. 9% 7.6% (Normalized basis*2) Enhance shareholder returns Steady growth of dividends in line with profit growth FY2015 projections : \105 per share (YoY +10 yen) Dividends per share \95 Sustainable profit growth Adjusted net income : \350B ~ \400B \298.1B (Normalized basis*2) *1 : Based on market environment as of the end of Mar. 2015 *2 : Natural catastrophes losses in adjusted net income is normalized to an average annual level. In addition, adjusted net assets is normalized based on market environment (share price, FX rate) as of the end of Mar. 2015 FY2017 Target*1 FY2014 Results 0:12:04.0 14 a-2. KPI in the New Mid-Term Business Plan Adjusted Net Income (Group total) Enhancing transparency and comparability / Linking with shareholder returns Business Unit Profits Creating long-term corporate value *Please refer to P.45, 47 for details regarding the definition For each business domain, “Business Unit Profits” is used from the perspective of accurately assessing corporate value including economic value, etc. for the purpose of long-term expansion Introduce MCEV (market-consistent embedded value) for domestic life, which reflects the economic value of the business more accurately For the Group total, “Adjusted Net Income” based on financial accounting is used from the perspective of enhancing transparency and comparability as well as linking with shareholder returns Profit indicator for the Group total as the base for calculating capital efficiency (adjusted ROE) and source of dividends 0:13:42.7 Enhancing Capital Efficiency (Roadmap to achieve ROE target) 15 Adjusted ROE 2011 2012 2013 2014 2015 Projections 2017 Target New Mid-Term Business Plan Previous Mid-Term Business Plan Cost of capital Sustainable profit growth Disciplined capital management * Natural catastrophes losses in adjusted net income is normalized to an average annual level. In addition, adjusted net assets is normalized based on market environment (share price, FX rate) as of end of Mar. 2015 Adjusted Net Income \350B~\400B (CAGR approx. 6%) Investment in new businesses to enhance/improve capital efficiency Adjusted Net Income \350B~\400B (CAGR approx. 6%) Investment in new businesses to enhance/improve capital efficiency Promote initiatives for sustainable profit growth Investment in new businesses to enhance/improve capital efficiency Continue to sell more than \100B per year Invest in new businesses to enhance capital efficiency Conduct share repurchases in a flexible manner based on a comprehensive assessment of market conditions, our capital levels, business investment opportunities, etc. approx. 9% 1.3% 6.5% 8.2% 8.9% 7.8% 5.1% 3.2% 7.6% 6.7% Adjusted ROE approx. 9% 0:15:46.2 Adjusted net income Business unit profits 16 \350B ~ \400B Net income (Financial accounting) Previous Mid-Term Business Plan New Mid-Term Business Plan Sustainable Profit Growth (Profit growth of each business domain) * Natural catastrophe losses is normalized to an average annual level 323.3 327.0 114.5 194.3 243.7 163.1 30.7 298.1 255.2 2011 2012 2013 2014 2015 Projections 2017 Target Normalized basis* Domestic non-life (TMNF) Domestic life (TMNL) International insurance 2014 2017 Plan 113.7 2014 2017 Plan 145.5 2017 Plan 2014 CAGR approx. +8% CAGR* approx. +8% approx. 125 * FX rate is as of end of Mar. 2015, and natural catastrophe losses is normalized to an average annual level Normalized basis* Normalized basis* approx. 120 CAGR approx. +3% * FX effects are excluded and natural catastrophe losses is normalized to an average annual level * CAGR of MCEV balance MCEV increase of approx. \260B (billions of yen) (billions of yen) (billions of yen) 0:17:48.1 17 Enhancing Shareholder Returns Steady growth of dividends Our primary means of shareholder return is dividends, which we plan to increase in line with profit growth We pursue steady growth of dividends, and payout ratio as a guide is above 35% of average adjusted net income* *Profit contribution from domestic life business and gains on sales of business-related equities will be newly included into the source of dividends Flexible share repurchases We intend to conduct share repurchases in a flexible manner based on a comprehensive assessment of market conditions, our capital levels, business investment opportunities, and other relevant factors + New Mid-Term Business Plan Previous Mid-Term Business Plan ■ : Dividends per share \105(Projections) \36 \48 \48 \50 \70 \50 \50 \55 \95(Plan) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2017 0:18:56.3 18 a-3. Promoting Strong ERM (Disciplined capital management ) Economic Solvency Ratio (ESR) Invest in businesses for growth and additional risk-taking Share repurchases Prepare for regulation changes and significant changes in business environment Utilization of capital buffer Maintain financial soundness Enhance profitability × * ESR(99.5%VaR) : 171% ** Guideline for comfortable level is approx. +30% at present Guideline for comfortable level of capital buffer ** Capital level which can maintain AA credit ratings withstanding once-in-a-decade risks Capital level which allows business continuity under stress scenario Mar. 31, 2015 +30% -30% 145% 140% 135% Capital buffer Mar. 31, 2015 Capital management framework 140%*1 Capital equivalent for AA ratings Capital equivalent for BBB ratings Guideline for comfortable level ** Balance capital and risk to maintain AA credit ratings Advance natural catastrophe risk management Ensure our financial base can withstand catastrophic risks Sustainable profit growth and enhance capital efficiency Invest in businesses which enhance capital efficiency Improve the profitability of existing businesses Continue to sell business-related equities Share price : Interest rates: Limited impact under ALM FX rates: Limited impact, as depreciation of the yen increases net asset value of overseas subsidiaries, whereas increases FX risks Share price: Impact on ESR due to the market value fluctuation of business-related equities Impact of market changes on ESR While maintaining AA credit rating standard (99.95%VaR), we sophisticated and advanced our capital model referring to the method in European Solvency Ⅱ, etc. (See p.44 for details) Risk capital 2.8 trillion Yen Net asset value 3.9 trillion Yen 0:21:39.2 With asset and liability management (ALM) at the core, we aim to secure sufficient liquidity and profit Further promote global portfolio diversification, as the Group expands globally a-4. Group Asset Management Strategy Total assets \20.8T ■ Domestic bonds \7.3T ■ Monetary receivables bought \1.3T ■ Domestic equities  \2.8T ■ Other securities \1.4T 35.1% ■ Cash and deposits \0.5T 2.6% ■ Others \2.7T 13.3% 7.2% 13.7% 3.3% 18.2% ■ Loans \0.6T ※as of end of FY2014 ■ Foreign securities \3.8T Aim to enhance profitability within the range of risk tolerance while taking the characteristics of insurance liabilities, etc. into consideration and continuously ensuring liquidity and risk controls through ALM Further strengthen investment capability by enhancing coordination among the Group companies both domestic and overseas Continue the sales of business-related equities from the perspective of enhancing capital efficiency Investment policy for each asset 6.6% 19 Group asset management concept Domestic government bonds (JGB): Approx. \6.6T Mainly bonds for the purpose of ALM by Domestic Life and Non-Life Mainly local country bonds held by overseas subsidiaries mainly in the U.S. and Europe Mainly business-related equities held by Domestic Non-Life (TMNF) Mainly assets in separate accounts held by Domestic Life Mainly tangible fixed assets and intangible fixed assets, etc. Mainly absolute return investment & lending by Domestic Non-Life (TMNF) and overseas subsidiaries 20 (blank page) 0:22:37.8 b 21 Business Strategy for Sustainable Profit Growth 0:22:42.7 22 Business Strategy for Sustainable Profit Growth 1. Domestic Non-Life 2. Domestic Life 3. International Insurance 4. Financial and General b 0:22:50.8 1-1. Domestic Non-Life Insurance - Summary Aiming for sustainable profit growth as the core business of the Group 23 113.7 Net premiums written 2,036.7 2014 2017 Plan 2014 2017 Plan CAGR approx. +2% Business unit profits 130.0 2015 Projections 2,100.0 2015 Projections CAGR approx. +3% Enhancement (Establish a solid business platform) Proactive measures (Strengthen R&D to meet future changes) Continuous enhancement of profit growth (Strengthen underwriting discipline and pursue business efficiency) Tokio Marine & Nichido Accelerate selection and concentration of business by focusing on personal and small-sized corporate market while maximizing Group synergy Enhance competitiveness (profit growth potential) through unique products and channel strategies in the personal insurance market Maintain top-line growth by enhancing customer experience and services in the growing direct market Key strategies Normalized* 2014 *: Effect of FX rate is excluded and natural catastrophes losses is normalized to an average annual level Nisshin Fire E.design approx. 120.0 0:24:24.9 1-2. Tokio Marine & Nichido - Continuous enhancement of profit growth Maintain combined ratio below 95% by continuously enhancing profit growth despite expected changes in the external business environment and investment for future growth FY2014 Results C/R* 90.6% Changes in business environment + Increase in unit-repair cost approx. 92~93% Plan for FY2017 Outlook for expense ratio Investment for future growth Strengthening R&D for future growth etc. Initiatives for improvement Controlling business expenses + Product and rate revisions in fire, etc. Measures to improve underwriting results Strengthening underwriting discipline Reduction of IT and   administrative costs Plan for combined ratio (private insurance basis*) C/R after normalizing natural catastrophes to average annual basis ⇒ 91.4% 24 *: Loss ratio (private insurance E/I basis) + expense ratio (private insurance W/P basis) Strengthening business platform Consumption tax hike in FY2017  etc. + + 32.2% 32.2% 2013 2017 Plan 32.8% 2015 Projections 32% level 2014 31% level 2013 2015 Projections 2014 2017 Plan 97.2% 90.6% approx. 92~93% ■ C/R after normalizing natural catastrophes to average annual basis 92.4% Consumption tax hike 91.4% 94.4% 95% Consumption tax hike 0:26:11.4 25 1-3. Tokio Marine & Nichido - Measures to achieve sustainable growth (1) Achieved industry-leading growth by strengthening customer contacts Net premiums written CAGR+4.5% Offering competitive products and services Enhancing quality and quantity of sales channels Innovation in sales force through "Business Renovation Project" Increase sustainable growth potential by establishing a solid business platform as well as strengthening R&D for "Enhancement " and changes Sustainable growth Enhance- ment Enhancing integrated business model for life and non-life Strengthening claims-service capabilities Innovation in work style Enhancing productivity through utilizing IT and business process reform Proactive measures Strengthen R&D by capitalizing on changes of business environment Offering products and services that meet future business environment and customer needs + Advancing our risk consulting service + New Mid-Term Business Plan Previous Mid-Term Business Plan 0:26:58.3 Enhancing our claims-services Innovation in work style (Increasing productivity) ? Agents ? Employees Significantly enhance the value delivered to customers through every opportunity to become "the best choice" by the customers Advancing risk consulting ability Strengthening claims-service capability of agents Accelerating / advancing service offerings by utilizing smart phone applications Strengthening capability for wide-area disasters Providing solutions to fields with high demand(Expanding service fields) 1-4. Tokio Marine & Nichido - Measures to achieve sustainable growth (2) 26 ? Strengthening integrated multi line sales approach with enhanced consultation capability of agents by thoroughly utilizing "next-generation business model (tablets PCs)" Customer satisfaction of product offering process 94% Before Tablets 61% ? Further increase the attractiveness of our strategic product "Super Insurance" and deliver life and non-life coverage to our customers Ratio of Life-third sector attachments in "Super Insurance" FY2014 FY2020 Target approx. 16% approx. 20% +4% Further integration of the business model for life and non-life Providing consulting service on business strategy, HR・welfare, and overseas risk management by utilizing the Group’s comprehensive capability Generate time to service customers and agents through office work process innovation and promoting usage of mobile devices such as tablet PCs, etc. Strengthen customer contact through business process innovation mainly by utilizing our “Next Generation Model” (tablet PCs) 0:28:56.3 27 Business Strategy for Sustainable Growth 1. Domestic Non-Life 2. Domestic Life 3. International Insurance 4. Financial and General b 0:29:04.5 2-1.  Domestic Life Insurance - Summary New policies annualized premiums Business unit profits Renovate our new-policy management IT-system which will enable flexible product development as well as establish infrastructure to support the advancement of our insurance business Establish infrastructure for future growth Promote ”Life Insurance Revolution to Protect One’s Living” Aiming for profit growth as a growth driver while controlling risks Strengthen growth potential Promote multi-channel strategies with the main focus of unlocking the potential of the integrated business model for life and non-life Strengthen sales channel support by substantially enhancing our sales force Expand our unique product line-up (“Premium Series”) which is a source of stable profit, mainly focusing on the increasing demand in the living-protection market Develop highly competitive products that accurately meet the customer needs and thus contribute to the increase in the number of customers Promote sales shift from saving-type products to protection-type products in low interest rate environment Number of new policies - Individual insurance - * Individual annuity and “whole life with long-term discount” Aiming for \100B in FY2017 (ten thousands of policies) (billions of yen) 114.1 2014 2017 Plan 2014 2015 Projections 2017 Plan 53 2014 2017 Plan CAGR approx. +10% CAGR approx. +8% 2015 Projections 84.9 2015 Projections 62 113.9 96.6 CAGR approx. +5% 28 MCEV increase of approx. \260B (billions of yen) 0:30:51.8 Changes of market needs 2-2. TMNL - “Life Insurance Revolution to Protect One’s Living” ”Household Income Term” with inability-to-work benefit ”Medical Kit R” “Medical Kit Love R” 29 July 2015 : release new cancer insurance product (“Cancer Treatment Support Insurance NEO”, “Cancer Insurance R”) Continuously release highly unique products onwards Promote living-protection insurance and “Premium Series” Strengthen and enhance consulting skills of agents Business environment Intensifying price competition Revision of Insurance Business Act (Obligation to provide information when recommending products in comparison with others) Product strategy (Expanding proactively into the living-protection market) Continue product offering to satisfy diverse customer needs 1 Increase the sales proportion of protection-type products 2 Accelerate product development by renovating our IT system to achieve future growth 3 “Life Insurance Revolution to Protect One’s Living” Death <conventional life insurance> Inability to work (home care) Outpatient treatment (after discharge) Nursing care requirement (permanent disability) Cultivate potential market (Life insurance to protect one’s living) Hospitalization / Surgery <medical insurance> FY15-17 New Mid-Term Business Plan FY12-14 Before FY11 ”Long-life Support Whole Life” “Medical Kit” with inability-to-work support (billion yen) <“Premium Series”, New policy annualized premiums> Decline of interest rate Improvement of medical technology (Shorter hospital stay / decline in mortality) Progress of aging society Expand and strengthen our unique product line-up which meets the diverse customer needs and   serves as a source of stable profit 2017 Plan 2011 2.6 2014 CAGR approx. +12% 17.8 0:32:54.9 2-3. TMNL - Strengthening Growth Potential 30 Promote multi-channel strategies with the main focus of unlocking the potential of the integrated business model for life and non-life Strengthen support for channels by integrated approach of life and non-life Substantial increase of sales force at TMNL Generate +30% of sales personnel time for sales support activities by shifting administrative work and inquiries, etc to back office Utilize the extra time generated to strengthen support for agents by TMNL personnel Establish infrastructure to support the advancement of our insurance business Utilize tablet PCs, etc. to grasp potential customer needs, complete a series of contract procedures including proposals, and promote training for sales agent Sales support to non-life agents through integrated approach of life and non-life Clarify role of sales personnel of life and non- life and provide all-in-one support Nationwide roll-out of cultivating non-life agent market by life partners (Full-time support by life partners at non-life insurance branches ) Business tie-up of life professionals with consultation expertise and non-life agents with a large customer base Promote sales channel mix Achieve growth in the 4 major channels Channel composition (FY2014 life insurance premiums on managerial accounting basis) Life professionals Life partner Bancassurance Non-life agents Strengthen sales force of life insurance   Strengthen training for salespersons Develop products compatible with integrated sales approach of life and non-life Enhance partnership Strengthen sales of Life and Non-Life Further support including governance Expand the channel with quality Increase the sales of protection-type products Life partner approx. 10% Life professionals Non-life agent Life partner Non-life agent X X Bancassurance approx. 10% Non-life agents approx. 55% Life professionals approx. 25% Strengthen sales force of life insurance   Strengthen training for salespersons Develop products compatible with integrated sales approach of life and non-life Enhance partnership Strengthen sales of Life and Non-Life Further support including governance Expand the channel with quality Strengthen sales force of life insurance   Strengthen training for salespersons Develop products compatible with integrated sales approach of life and non-life Enhance partnership Strengthen sales of Life and Non-Life Further support including governance Increase the sales of protection-type products Channel expansion while ensuring quality Strengthen sales ability of life insurance products  Strengthen training of sales agent Develop products compatible with integrated sales approach of life and non-life Strengthen partnership Strengthen parallel sales of life and non-life insurance products Support governance within the agent (Credit card and mail order companies, etc.) 31 (blank page) 0:34:49.3 32 Business Strategy for Sustainable Profit Growth 1. Domestic Non-Life 2. Domestic Life 3. International Insurance 4. Financial and General b 0:35:01.5 2014 145.5 Business unit profits 1,269.0 Pursue growth opportunities globally and build geographically diversified business portfolio as the driver of the Tokio Marine Group’s growth 3-1. International Insurance Business - Overview 127.0 2014 2015 Projections 2017 Plan Net premiums written Business and geographical portfolio breakdown 1,302.6 approx. 125 Normalized*1 2014 2015 Projections 2017 Plan Normalized*2 2014 CAGR approx. +8% CAGR approx. +7% *1: Applying foreign exchange rates as of the end of Mar. 2015 and assuming an average level of natural catastrophe losses *2: Applying foreign exchange rates as of the end of Mar. 2015 (billions of yen) (billions of yen) approx. 1,250 JPY120.1 Mar. 31, 2015 Mar. 31, 2015 JPY120.1 JPY 120.5 Dec. 31, 2014 Mar. 31, 2015 JPY120.1 Applied FX rate (USD/JPY) JPY120.5 JPY120.1 JPY120.1 Dec. 31, 2014 Mar. 31, 2015 Mar. 31, 2015 Applied FX rate (USD/JPY) 2017 Net Premiums Written (plan) North America Europe, Middle East Reinsurance approx. 8% South & Central America approx. 10% Asia (Non-life) approx. 10% Asia (Life) approx. 50% approx.12% approx. 10% 33 0:36:08.3 Pursue growth opportunities globally and build geographically diversified business portfolio as the driver of the Tokio Marine Group’s growth Pursue balanced growth in both developed and emerging markets through “organic growth” and “M&A” 3-2. International Insurance Business - Strategy Continue to consider new business investment opportunities in both developed and emerging markets while maintaining discipline Growth Strategy 1 : Organic Growth Developed markets: Strengthen competitive advantage mainly in the commercial market to achieve continuous profit growth Emerging markets: Capture market growth mainly in personal market by expanding distribution and product base Further utilize collective strength of the Group 1. Expanding group synergies 2. Best practice sharing 3. Collaboration between domestic and international business ・Governance / Internal Controls ・Internal Audit ・ERM ・Investment ・Business Process / IT    etc. ・Development of global leadership talent  ・Deployment of local talents for global operations Global HR Strategy Further enhance our business platform to support future growth of the International Insurance Business Global Corporate Functions Growth Strategy 2 : M&A 34 0:36:45.3 3-3. International Insurance Business - Developed Counties (North America) 94% level 94% 94% 657.0 900 631.2 87.2 2014 2014 CAGR approx. +5% CAGR approx. +4% 2014 Normalized*1 Business unit profits Net premiums written C/R (billions of yen) (billions of yen) 2015 Projections 2017 Plan 2015 Projections 2017 Plan Maintaining profit growth outperforming the market through underwriting discipline and action Expanding profit growth through profound investment expertise as well as further developing specific products and specific markets Pursue synergy effect in North America Cost efficiency Investment Product development HR development Reinsurance *1: Applying foreign exchange rates as of the end of Mar. 2015 and assuming an average level of natural catastrophe losses 35 90.0 90.0 Highly competitive business model focusing on niche markets Maintaining high retention ratio of in-force policies through strong franchise network Holding fast to underwriting discipline including Dynamic Portfolio Optimization (DPO)*2, etc. Expanding distribution channel and new product sales including strategic bolt-on M&A *2 DPO: Strategy to optimize portfolio by identifying contracts with significant natural catastrophe risks and actively improving pricing terms and conditions Highly competitive business model focusing on market for employee benefits and excess workers compensation Maintaining high retention ratio and improving underwriting conditions in main products Diversifying profit sources including asset accumulation business*3 through profound investment expertise *3: Asset accumulation business: Annuity and Funding Agreement 0:38:03.5 International Insurance Business - Developed Counties (Europe, Reinsurance) Europe Reinsurance 94% 93% 93% level 93% 92% 6,332 2015 Projections 2017 Plan 161.0 2015 Projections 2017 Plan 154.6 2014 Normalized* 2014 2015 Projections 2017 Plan 102.0 2015 Projections 2017 Plan 149.5 2014 9.6 Normalized* 2014 90% level 129.0 2014 2014 *:Applying foreign exchange rates as of the end of Mar. 2015 and assuming the average level of natural catastrophe losses C/R Business unit profits Net premiums written C/R Business unit profits Net premiums written (billions of yen) (billions of yen) (billions of yen) (billions of yen) almost flat Applying foreign exchange rates as of the end of Mar. 2015 and excluding the impact of multi-year contracts CAGR approx. +8% CAGR approx. +9% CAGR approx. +13% Maintaining profitability in the softening market with profound expertise on each region and line, and proper response to customer needs 19.6 3-4. 36 12.0 12.6 11.0 7.6 Achieving profit growth through business platform in the Lloyd’s market and Corporate market under the integrated brand, “Tokio Marine Kiln” Enhancing the quality of business through the integration Focusing on specialty business whilst maintaining underwriting discipline Reinforcing strategic approach to the Corporate market including Japanese enterprises Further expanding US / Europe / Oceania portfolio Promoting geographical and product line diversification (expansion in business without risk of natural catastrophe) Expanding source of profit through solution offering to meet customer needs 0:39:47.2 3-5. International Insurance Business - Emerging countries Asia South & Central America Singapore, Malaysia, Thailand Establishing stable business platform including distribution networks India, Indonesia Brazil Thailand, Malaysia, India etc. China Strengthening main product sales and expanding distribution channels Further strengthen Japanese corporate customer business and auto insurance business Improving profitability through expansion of distribution channels and product revisions Strengthening management control by Tokio Marine Asia (regional headquarter) Further expanding business by benchmarking the best-practice within the Group Accelerating development in personal market through expansion of distribution channels both in non-life and life Maintaining high growth outperforming market and profitability in auto insurance as the main business Establishing a new growth driver in addition to auto insurance business Promoting progress of measures to improve operation efficiency and profitability through business process reform 2015 Projections 2017 Plan 130.0 1,300 117.9 100.0 116.6 2014 2015 Projections 2017 Plan 2014 118.0 132.1 2015 Projections 2017 Plan 2014 CAGR approx. +10% Non-life Net premiums written Life Insurance premiums Net premiums written (billions of yen) (billions of yen) (billions of yen) approx.+10% in local currencies CAGR approx. +5% CAGR approx. +4% 37 0:40:38.5 3-6. International Insurance Business - M&A strategy 2012 2013 2014 Group total adjusted EPS* Trend of adjusted EPS* 2011 40 212 317 \423 10 Significant contribution to the Group’s profit growth through M&A strategy and smooth PMI Mar. 2008 Total adjusted EPS* of 3 companies * Group : adjusted net income per share 3 companies : total of business unit profits per share Dec. 2008 May 2012 Continue to consider new business investment opportunities both in developed and emerging markets while maintaining M&A discipline 38 Acquisition Principles Management soundness   (A good management team sharing our values ) Robust business model High growth potential Smooth PMI (Post Merger Integration) Establishing strong mutual reliable relationship with local management Implementing effective governance structure while respecting local management Expanding group synergies through sharing and transferring competitive advantages of each company Significant contribution to the Group’s profit growth building solid track records 54 119 \133 0:43:11.0 39 Business Strategy for Sustainable Profit Growth 1. Domestic Non-Life 2. Domestic Life 3. International Insurance 4. Financial and General b 0:43:17.9 Financial business General business Maximize the Group’s strengths and synergies through enhanced cooperation among group companies Contribute to improve competitiveness of the Group's insurance companies by improving quality of products and services as well as operational efficiency Tokio Marine & Nichido Facilities Tokio Marine & Nichido Anshin Consulting Tokio Marine & Nichido Career Service Maximize the Group’s strengths and synergies 4. Financial and General businesses Contribute to the improvement of the Group’s business portfolio and profit growth by developing businesses with high capital efficiency, mainly in the asset management (fee-based) business Strategically expand our business in the domestic retail business and overseas businesses, which are the growing markets, by utilizing our asset management expertise proven in the business for domestic institutional investors Comprehensive human resource services Tokio Marine Assistance Tokio Marine & Nichido Medical Service Tokio Marine & Nichido Samuel Tokio Marine & Nichido Better Life Service Tokio Marine Capital Tokio Marine Mezzanine Tokio Marine Asset Management Tokio Marine Property Investment Management Tokio Marine & Nichido Risk Consulting Assistance Healthcare for the elderly Risk consulting Facility management Life planning 40 0:43:37.6 3 Summary of the New Mid-Term Business Plan 41 0:43:48.4 Summary of the New Mid-Term Business Plan <Sustainable profit growth> Adjusted net income \350B~\400B <Steady dividends growth> Payout ratio as a guide is above 35% of average adjusted net income 1 2 <Disciplined capital management> Secure financial soundness and profitability while considering comfortable level* Continue to sell business-related equities (more than \100B per year) Flexible shares repurchases <Investment for future growth> Invest in new businesses with high capital efficiency Invest today to build foundations for our growth tomorrow 4 3 42 1 2 3 4 Adjusted ROE approx. 9% Group Management Framework based on ERM Enhance capital efficiency * Guideline for comfortable level of ESR is approx. +30% at present. Aiming to continuously create value through the circulation of capital Reference 43 ・Revision of Required Capital Model ・Definition of Adjusted Net Income (new) ・Reconciliation of Adjusted Net Income / Adjusted Net Assets ・Definition of Business Unit Profits (new) ・Reconciliation of Business Unit Profits ・Consolidated Results Overview (FY2014 Results) ・Consolidated Projections Overview (FY2015 Projections) ・Business Unit Profits (FY2015 Projections) ・International Insurance Business FY2015 Projections by Region ・Impact of FX Rate Change on the Group's Financial Results ・Asset portfolio ・Tokio Marine Holdings Key Statistics ・Return to Shareholders ・Basic Information (Domestic Non-Life) - TMNF ・Basic Information (Domestic Life) - TMNL ・Basic Information (International Insurance) e a b c d Revision of Required Capital Model <End of Sept. 2014> Risk capital \3.3T 148% Net asset value \4.9T Risk capital \2.8T 140%* Net asset value \3.9T <End of Mar. 2015> change in tax effect consideration excluding restricted capital Introduction of MCEV   etc. change in tax effect consideration Change in asset management risk measurement method   etc. Contribution of 2H FY14 adjusted earnings Increase in unrealized gains of business-related equities Depreciation of the yen   etc. Increase in risk of equities due to the rise in stock price Depreciation of the yen    etc. (*Reference) ESR(99.5%VaR) : 171% 44 Risk capital \2.5T 141% Net asset value \3.5T Impact to net asset value Impact to risk capital Factors causing change in net asset value Factors causing change in risk capital Previous model Model revision New model New model While maintaining AA credit rating standard (99.95%VaR), we revised our capital model referring to the method in European SolvencyⅡ, etc. Revisions include "change in tax effect consideration", "excluding restricted capital", "change in asset management risk measurement method", etc. Adjusted Net Income*1 Adjusted Net Assets*1(average balance basis) Adjusted ROE (new definition) Difference between new definition and former definition Adjusted Net Income Net income (consolidated) *2 Provision for catastrophe loss reserves*3 Provision for contingency reserves*3 Provision for price fluctuation reserves*3 Gains or losses on sales or valuation of ALM*4 bonds and interest rate swaps = + + + - Amortization of goodwill and other intangible fixed assets Gains or losses on sales or valuation of fixed assets Other extraordinary gains/losses, valuation allowances, etc + - - Adjusted Net Assets Net assets (consolidated) Catastrophe loss reserves Contingency reserves Price fluctuation reserves = + + + - Goodwill and other intangible fixed assets Adjusted ROE Adjusted Net Income Adjusted Net Assets = ÷ Definition of Adjusted Net Income (new) *1: Each adjustment is on an after-tax basis *2: Net income is attributable to owners of the parent *3: Reversals are subtracted *4: ALM: Asset Liability Management. Excluded as counter balance items against market value fluctuations of liabilities under ALM 45 Adjusted Net Income*1 Adjusted Net Assets Adjusted ROE (billions of yen) Reconciliation of Adjusted Net Income / Adjusted Net Assets 46 Life insurance business*4 Non-life insurance business Other businesses The indicator for life insurance business will be changed from TEV (Traditional Embedded Value) to MCEV (Market-Consistent Embedded Value), which reflects the economic value more accurately. For detailed information about MCEV, please refer to “Tokio Marine & Nichido Life Introduction of Market Consistent Embedded Value (end of March 2015)”, which is separately disclosed by Tokio Marine Holdings, Inc. Net income determined in accordance with financial accounting principles Business Unit Profits*1 Net income Provision for catastrophe loss reserves*2 Provision for price fluctuation reserves*2 Gains or losses on sales or valuation of ALM*3 bonds and interest rate swaps = + + - Gains or losses on sales or valuation of equity holdings and fixed assets Other extraordinary gains/losses, valuation allowances, etc. - - Increase in EV*5 during the current fiscal year Capital transactions such as capital increase = + Business Unit Profits*1 *1: Each adjustment is on an after-tax basis *2: Reversals are subtracted *3: ALM: Asset Liability Management. Excluded as counter balance items against market value fluctuations of liabilities under ALM *4: For life insurance companies in certain regions, Business Unit Profits is calculated by using the definition in Other businesses (head office expenses, etc. are deducted from profits) *5: EV: Embedded Value. An index that shows the net present value of profits to be gained from policies in-force is added to the net asset value Difference between new definition and former definition Definition of Business Unit Profits (new) 47 Non-life insurance business*1(TMNF) International insurance business Reconciliation of Business Unit Profits 48 Consolidated Results Overview (FY2014 Results) 49 Net premiums written Ordinary profit Net income Life insurance premiums Increased in Group total due to an increase in domestic non-life mainly in auto as well as organic growth and the positive impact from progress of the depreciation of the yen at overseas subsidiaries Decreased mainly due to an increase of surrender of variable annuities in domestic life business (former FL) despite revenue growth at overseas subsidiaries TMNF Increased mainly due to an increase in net premiums earned mainly in auto and a decrease in natural catastrophe losses, etc. despite an increase in net provision for catastrophe loss reserves Overseas Subsidiaries Increased mainly due to the progress of various growth measures and the depreciation of the yen, despite the reversal effect of temporary increase factors in FY2013 Record high net income (Negative effect of the reduction of deferred tax assets owing to the decrease in corporate tax rate was mostly offset by the positive effect of tax reduction) Consolidated Projections Overview (FY2015 Projections) 50 Net premiums written Ordinary profit Net income Life insurance premiums Projected to increase in Group total mainly due to an increase in domestic non-life mainly in auto, despite the reversal effect of temporary increase factors in FY2014, and FX effects at overseas subsidiaries Projected to increase mainly due to a decrease in surrender of variable annuities, etc. in domestic life business (former FL) Domestic Non-Life Projected to decrease mainly due to assuming an average level of natural catastrophe losses as well as an increase in net provision for catastrophe loss reserves Domestic Life Projected to decrease due to an increase in expenses associated with new policies, etc. Overseas Subsidiaries Projected to decrease mainly due to assuming an average level of natural catastrophe losses Projected to decrease due to the same factors in ordinary profit (In FY2014, negative effect of the reduction of deferred tax assets owing to the decrease in corporate tax rate was mostly offset by the positive effect of tax reduction ) Business Unit Profits (FY2015 Projections) Domestic Non-Life TMNF: Projected to increase by \16.3B YoY to \130.0B Assuming an average level of natural catastrophes Increase in net premiums earned mainly in auto and fire Reversal effect of the reduction of deferred tax assets in FY2014 owing to the decrease in corporate tax rate Reversal effect of the negative impact* due to the progress of the depreciation of the yen, etc. in FY2014 *Increase in provision for reserves for foreign currency denominated outstanding claims and decrease in gains on FX derivatives Domestic Life   AL: Projected to decrease by \99.7B YoY to \70.0B mainly due to the reversal effect of temporary increase factors* (\92.8B) in FY2014 and a decrease in new business value owing to the decline in interest rates *Main factors are the recording of deferred tax assets of FL, effect of change in assumptions used due to the decrease in corporate tax rate, and economic variances International Insurance   Projected to decrease by \18.5B YoY to \127.0B mainly due to the reversal effect of temporary effects in FY2014 *FY2014 results is approx. 125 billion yen based on exchange rate as of the end of Mar. 2015 and assuming an average level of natural catastrophe losses 51 International Insurance Business FY2015 Projections by Region 52 (billions of yen, except for %) 2. Change in reserves for foreign currency denominated outstanding claims and derivatives at TMNF 1. Increase in profit from overseas subsidiaries converted into yen : Impact on P/L Impact on B/S Regarding No.2 in the left column, due to the simultaneous change in value of the matching foreign currency denominated assets and hedged assets, impact on the Group's net asset value is basically neutral *1: Assuming that the FX rate for each currency changes by the same ratio as USD *2: After tax basis Increase in yen based net asset value of overseas subsidiaries : Main impact in the event of 1 yen depreciation*1 Reference (applied FX rate) approx. \ +1.0B*2 approx. \ - 1.0B*2 approx. \ +10.0B Impact of FX Rate Change on the Group's Financial Results JPY 120.55 (end-Dec. 2014) Applied FX rate (USD/JPY) FY2014 Results JPY120.17 (end-Mar. 2015) Overseas subsidiaries TMNF FY2013 Results JPY 102.92 (end-Mar. 2014) JPY 105.39 (end-Dec. 2013) Negative impact of the depreciation of the yen decreased due to the reorganization of TMNF U.S. branch as an overseas subsidiary FY2015 Projections (Assumptions) JPY 120.17 (end-Mar. 2015) 53 28% 16% 31% 12% 13% 14% 21% Assets backing long-term insurance liabilities 65% Former FL 54 Asset Portfolio Domestic Non-Life (TMNF) With regard to "long-term insurance liabilities," we aim to maximize the value of surplus by controlling the interest rate risk based on the principle of strict ALM investments With regard to "Absolute return investment and lending," we work toward diversification of investments with appropriate risk control, in order to maximize net asset value and increase investment income TMNF Total Assets \9.0T (as of Mar. 31, 2015) Mainly yen-denominated fixed income assets Business-related equities Investments in subsidiaries and affiliates Absolute return investment and lending Others (Including short-term investments) Real estate for own use and non-investment assets Continue to reduce holdings Appropriately control the yen- denominated interest rate risks of long- term insurance liabilities including deposit-type insurance, with yen- denominated fixed income assets Carefully select investment targets from domestic and foreign bonds, etc. and aim for profit contribution Domestic Life (TMNL) Excluding assets in separate accounts, most assets are assets for backing long-term insurance liabilities. We aim to maximize the value of surplus by controlling the interest rate risk based on the principle of strict ALM investments TMNL Total Assets \7.0T (as of Mar. 31, 2015) Mainly yen-denominated fixed income assets Assets backing long-term insurance liabilities Assets in separate accounts Others Short-term investments, etc. Appropriately control interest rate risks of life insurance liability Tokio Marine Holdings Key Statistics 55 Return to Shareholders 56 NF 1.8% TMNF 25.8% その他 72.1% 1,892.7 1,928.0 1,912.1 1,813.4 1,736.0 1,742.7 1,783.0 1,869.6 1,966.3 2,036.7 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015 Projections 92.0% 90.9% 89.8% 91.2% 97.4% 103.3% 97.9% 99.4% 93.1% 97.2% 57 Auto 48.6% Fire 13.3% P.A. 8.3% Marine 3.2% CALI 13.6% Others 12.9% Others 17.2% Financial institutions 3.4% Auto repair shop 6.0% Auto dealership 20.0% Corporate 25.0% Full-time agents 28.3% 2014 2,100.0 90.9% Basic Information (Domestic Non-Life 1) - TMNF Trend of net premiums written and combined ratio C/R(Private insurance W/P Basis) Net premiums written (billions of yen) Premium composition by line (FY2014 net premiums written basis) Premium composition by sales channel (FY2014 managerial accounting basis) *Japanese non-life market (excluding reinsurance companies) Market share* (FY2013 net premiums written basis) Statistics of combined ratio and loss ratio (private insurance E/I basis) *: Net E/I C/R = E/I loss ratio + W/P expense ratio Efforts to decrease business expenses such as operational streamlining Product and rate revisions Introduction of age-bracket rate plans Revision of the Grade Rating System Other measures to improve underwriting result <Measures to improve profitability> Increase in senior drivers with high accident frequency Decrease in per-policy premiums owing to the progress of the average discount rate under the Grade Rating System Increasing trend in unit repair cost <Factors of profitability deterioration> Trend of auto insurance policy renewal ratio, combined ratio and loss ratio 2014 91.5% 94.0% 98.5% 103.8% 102.9% 103.6% 98.5% 96.0% 94.9% 102.6% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015 Projections 91.4% Basic Information (Domestic Non-Life 2) - TMNF Trend of underwriting results in auto insurance (W/P basis combined ratio) *: Net E/I C/R = E/I loss ratio + W/P expense ratio (excluding revision of the Grade Rating System in non-fleet auto insurance) 58 (billions of yen) Rate revisions and profitability improvements per FY 8 23 41 57 87 106 134 160 187 219 256 283 317 349 378 405 438 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 500 470 Growing "Medical & Cancer" market Growth rate of number of in-force policies at TMNL 【Composition of number of in-force policies】 (Individual insurance basis, total of Japanese life insurance market) Average of Japanese life insurance market*3  +2.7% TMNL*2       +13.9% 【CAGR of in-force policies from FY2000 to FY2013】*1 Number of in-force policies*4 at TMNL (total of individual insurance and individual annuities) (unit: millions of policy) Others Medical & Cancer *1: Total of individual insurance and individual annuities Through development of product strategies focusing on “life insurance to protect one's living” in response to customer needs, TMNL achieved 5 million in-force policies in FY2014, significantly exceeding the market growth Basic Information (Domestic Life) - TMNL Source: The Life Insurance Association of Japan *3 :Source Insurance Statistics (Seiho Toukeigo) (unit: ten thousands of policy) FY2013 FY2000 35.6% 20.2% 0 50 100 150 *4:Total of TMNL and former FL *2: After merger basis 59 60 Further growth, business diversification and increasing capital efficiency (until 2000) Developed by mainly focusing on Japanese corporate customer business Enhanced business expansion into non-Japanese corporate customer business Reinsurance Non-life in emerging countries Full-scale operation in U.S. and European markets Further expansion in the emerging markets Life in India Delphi Philadelphia Kiln *FX rates are as of Dec. 31 of each year (FX rate for FY2015 Projections is as of Mar. 31 2015) Net premiums written in international insurance business (billions of yen) Life in emerging countries 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 118.7 240.2 319.5 413.9 362.6 544.0 526.5 499.7 734.3 1,074.5 2015 Projections 1,269.0 0 200 400 600 800 1,000 1,200 Life Reinsurance North America Europe & Middle East South & Central America Asia 1,302.6 Basic Information (International Insurance) Disclaimer These presentation materials include business projections and forecasts relating to expected financial and operating results of Tokio Marine Holdings and certain of its affiliates in current and future periods. All such forward looking information is based on information and assumptions available to Tokio Marine Holdings when the materials were prepared and is subject to a range of inherent risks and uncertainties. Actual results may vary materially from those estimated, anticipated, expected or projected in the accompanying materials and no assurances can be given that any such forward looking information will prove to have been accurate. Investors are cautioned not to place undue reliance on forward looking statements in these materials. Tokio Marine Holdings undertakes no obligation to update or revise any of this forward looking information, whether as a result of new information, recent or future developments, or otherwise. These presentation materials do not constitute an offering of securities in any jurisdiction. To the extent distribution of these presentation materials or the information included herein is restricted by law, persons receiving these materials must inform themselves of and observe any such restrictions. For further information... Investor Relations Group, Corporate Planning Dept. Tokio Marine Holdings, Inc. E-mail: URL : www.tokiomarinehd.com Tel : +81-3-3285-0350 20150529 0:45:32.4 0:46:11.9 0:57:16.2 1:06:10.9 1:14:05.3 1:18:01.1 1:23:20.2 1:30:36.6 1:41:26.4 1:49:06.3 Tsuyoshi Nagano President