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0:00:00.0 Tokio Group TokioMarine Marine Group Business Strategy Business Strategy May 27, 2019 May 27, 2019 (Blank Page) Copyright (c) 2019 Tokio Marine Holdings, Inc. 1 0:00:44.9 Table of Contents I. Business & Capital Strategy............... P. 3 II. Key Business Highlights...................... P. 9 III. M&A Strategy......................................... P. 17 IV. Shareholder Return.............................. P.23 Reference....................................................... P.26 Copyright (c) 2019 Tokio Marine Holdings, Inc. 2 0:01:00.1 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Our Goal and Strategy Our Goal Leading global insurer delivering significant value to all our stakeholders Stable double-digit ROE High level shareholder return Capital instruments Organic growth Sustain stable profit base in Japan Focus on Specialty in developed countries Capture growth potential in emerging countries Generate capital Business investment Disciplined strategic M&A & Additional risk-taking Shareholder return Increase dividend Flexible capital level adjustment Review our business portfolio Strategic capital release Appropriate risk control + Copyright (c) 2019 Tokio Marine Holdings, Inc. 3 0:02:22.4 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Portfolio Diversification Trends of premiums and risk* Risk diversification \4.6Trillion Sustainable growth FY2018 Diversification effects 47% Risk after diversification 10% 23% \2.6Trillion 22% Before \4.9Trillion 26% 20% ■ Domestic non-life \3.3Trillion (underwriting) Control of nat-cat risk Net premiums written +Life insurance premiums ■ Domestic non-life (investment) Reduction of businessrelated equities risk Risk FY2014 Diversification effects 44% ■ Domestic life \2.8Trillion Control of interest rate risks Shift to protection?type products \2.6Trillion 2014 2015 2016 2017 2018 Disciplined control 14% 10% 21% ■ International insurance Before \5.0Trillion 33% Diversification improvement with business expansion 21% Risk after diversification *: ESR risk (99.95%VaR, after tax basis). Copyright (c) 2019 Tokio Marine Holdings, Inc. \2.8Trillion ■ `Others` includes Financial and General businesses, and FX risk derived from net capital investment, etc. 4 0:03:06.9 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Strong Track Records EPS*1 growth (JPY) Comparison among global peers EPS*1CAGR (2014-2018) Peers*2 Med. Max. +6.2% CAGR +4.3% Min. CAGR +5.7% 382 363 383 +4.3% 337 323 -0.7% -20.2% 2014 2015 2016 2017 2018 *1: Financial accounting basis. *2: Allianz, AXA, Chubb, and Zurich. Source: Bloomberg. Copyright (c) 2019 Tokio Marine Holdings, Inc. 5 0:03:48.5 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Strong Track Records Our TSR*1 outperforms the market Performance 400 Tokio Marine Peers*2 MSCI World Insurance TOPIX (Insurance business) TOPIX 300 1Y 118 110 101 100 95 3Y 164 149 138 142 131 5Y 203 168 142 158 147 As of Mar. 31, 2019 369 Peers 266 226 220 205 TOPIX(Insurance) MSCI World Insurance 200 TOPIX 100 0 2002.04 2004.04 2006.04 2008.04 2010.04 2012.04 2014.04 2016.04 2018.04 Copyright (c) 2019 Tokio Marine Holdings, Inc. Source: Bloomberg. *1: Total Shareholder Return (TSR): Capital return after reinvesting dividends. Stock price indexed at 100 on Apr. 1, 2002. *2: Allianz, AXA, Chubb, and Zurich. 6 0:04:27.4 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Our Target KPIs FY2020 target Adjusted net income Mid-Term goal JPY400 - 450bn (CAGR 3 - 7%)*1 >JPY500bn Adjusted ROE ≧10% Around 12% Shareholder Return Payout ratio*2 ≧35% Gradual increase to the same level as global peers*3 Capital adjustments Flexible execution Flexible execution Copyright (c) 2019 Tokio Marine Holdings, Inc. *1: CAGR is calculated based on a normalized basis of \372.0bn in FY2017. See P.27 for a definition of a normalized basis. *2: Payout ratio is based on 5-year average of adjusted net income. *3: Payout ratio of global peers is currently approx. 50%. 7 0:05:25.1 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Progress of Mid-Term Business Plan Main KPIs are on track Adjusted net income Adjusted ROE Shareholder return ? Dividends (billions of JPY) Payout Ratio*1 DPS (JPY) +119.0 400.0 280.9 7.2% +3.2pt 10.4% 36% 38% 190 180 2018 (Plans) 2019 (Projections) Total dividends \128.0bn \134.2bn 2018 2019 (Projections) 2018 2019 (Projections) ? Capital level adjustment*2 (FY2018) Share repurchase : \75.0bn One-time dividend : \50.0bn *1: On an original projection basis. Payout ratio is based on 5-year average of adjusted net income . *2: Total amount approved by the announcement date of financial results of respective year. Copyright (c) 2019 Tokio Marine Holdings, Inc. 8 0:05:52.8 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Robust Business Model Realize further growth through well diversified business model with a stable profit base in Japan as well as a strong specialty franchise in developed countries and a business footprint capturing high market growth in emerging countries Area Profit Contribution* Role Generate sustainable and stable profits Strategy Stable market Japan 53% + Competitive position Developed countries Sustainable profit growth unaffected by market conditions Focus on specialty insurance + Emphasize profitability 47% Emerging countries Copyright (c) 2019 Tokio Marine Holdings, Inc. Strategic regional expansion Capture high market growth + Business platform to capture growth *: Ratio of business unit profit in FY2019 projections. 9 0:06:28.3 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Stable Business Platform ? We have increased ROE by enhancing profitability and risk diversification through large-scale M&As in the U.S. and Europe ? Aim for higher ROE toward our goal Low Low TMNF (2004-2008) Capital efficiency TMNF (2014-2018) High 0.0% Peer 1 Japanese P&C 1 Peer 2 1.5% ROE Standard Deviation High 2% Copyright (c) 2019 Tokio Marine Holdings, Inc. Volatility 4% Japanese P&C 2 Peer 4 TMNF (2009-2013) 6% 8% 10% 12% Peer 3 3.0% 5-year average ROE ROE: Financial accounting basis. Other companies: Average of 2014-2018. Peers: Allianz, AXA, Chubb, and Zurich. Source: Bloomberg. 10 0:08:41.3 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Domestic Non-Life Continue to beat the market with competitive business efficiency Growth outperforming the market Direct net premiums written ■ TMNF ■ Market*1 (billions of JPY) Competitive business efficiency Expense ratio (all lines) TMNF Market*2 CAGR + 3.5% 35.0% CAGR +2.7% 33.5% 33.3% 2,357.0 1,851.4 Reduce workloads on a long-term basis 26.4% Market share -20-30% 30.7% 25.0% 2010 2011 2012 2013 2014 2015 2016 2017 *1: Total of the members of The General Insurance Association of Japan. Source: Insurance Statistics (Sonpo Toukeigo). *2: Total of the members of The General Insurance Association of Japan (excluding TMNF). Source: Website of the General Insurance Association of Japan. Copyright (c) 2019 Tokio Marine Holdings, Inc. 2010 2017 11 0:09:29.4 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Profitability of Automobile Insurance Maintain solid profitability through keeping or increasing number of policies and unit premiums while number of owned automobiles is expected to decrease over the long-term Automobile insurance growth & profitability (TMNF) Top-line (billions of JPY) Number of policies outperform the market ※ Growth rate, FY2010 is set at index value of 100 TMNF number of insured automobile*1 1,065.1 110 112.3 CAGR -0.4%*2 towards 2025 Number of owned automobiles in Japan*2 105 103.7 850.8 100 2010 2017 2025 2010 2011 2012 2013 2014 2015 2016 2017 2018 Solid unit premiums growth ※ Growth rate, non-fleet unit premiums in FY2010 is set at index value of 100 Rate Cut -2.8% Jan. 2018 Bottom-line (combined ratio (E/I basis) ) 103.2% 102.9% 100.2% 95.7% 91.6% 91.4% 91.0% 91.8% 93.1% 110 112.4 2010 2011 2012 2013 2014 2015 2016 2017 2018 105 *1: On a managerial accounting basis. *2: Source: Automobile Dealer Vision (FY2018). Copyright (c) 2019 Tokio Marine Holdings, Inc. 100 2010 2018 12 0:11:03.5 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Expansion of Specialty and Profitability Improvement of Fire Realize sustainable profit growth through leveraging large potential of specialty insurance business and improving profitability of fire insurance Expansion of Specialty insurance Penetration rate of liability and workers’ compensation*1 (FY2016) US Profitability improvement of fire insurance Our measures ? +\15.0bn profitability improvement effect through rate increase (Oct. 2019), etc.*3 (Effect: 10% in FY2019, 50% in FY2020, and 80% in FY2023) ? Aim to improve RoR continuously in the future Major wind and flood, etc. payouts (industry total)*4 0.49% 0.35% 0.14% 0.14% \720.0bn UK Japan Potential market (billions of JPY) 1,400.0 (billions of JPY) Specialty/P.A. insurance growth (TMNF)*2 CAGR 1,000.0 +4.3% 629.8 448.7 2010 2018 600.0 Our Plan Gradually raise premium over time to improve profitability 2004 2018 200.0 1991 *1: Direct premiums written of liability/workers’ compensation insurance /GDP. Source: Created by Tokio Marine from Swiss Re: Japan’s commercial insurance market 2018. *2: Direct net premiums written. (image) Copyright (c) 2019 Tokio Marine Holdings, Inc. *3: On a pre-tax basis. *4: Source: The website of The General Insurance Association of Japan. 13 0:12:00.2 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Domestic Life Enhance new business margin by shifting to protection-type products while achieving growth greatly exceeding the markets through innovative products Growth greatly exceeding the market Number of in-force policies*1 CAGR (1996-2017) +22.1% +11.7% TMNL*2 New Entrants*3 (Ave.) (Ten thousands of policy) Shift to protection-type products Composition of protection-type products*4 and new business margin*5 2015 2018 Oct. 2016 530 555 570 585 8 23 41 57 87 106 134 160 187 219 256 283 317 349 378 405 438 470 500 Composition of protection-type products in products for individuals Sales suspension of long-term saving-type products 6% Others 13% Market Link (Installment variable annuities) 43% 57% Keep focusing on protection- 81% type products NBM JGB 30Y*6 (Ave.) 4.5% 1.28% 7.2% 0.75% 1996 *1: Total of individual insurance and individual annuities. *2: After merger basis between TMNL and former FL. *3: Sony, Sompo Japan Nipponkoa Himawari, ORIX, Mitsui Sumitomo Aioi, and FWD Fuji. Source: Insurance Statistics (Seiho Toukeigo). 2018 *4: New policies ANP basis, excluding business insurance. *5: New Business Margin (NBM): Value of new business / present value of new business premiums. *6: Source: Bloomberg. Copyright (c) 2019 Tokio Marine Holdings, Inc. 14 0:12:49.8 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Successful Growth in Developed Market Achieve high growth exceeding the market by establishing profitable specialty franchises Established business platform in the U.S. Top specialty insurance player in the U.S. in commercial lines *: The U.S. commercial P&C direct premiums written in FY2018. Source: S&P Global. Top 10 Excess workers’ compensation #1 Medical stop-loss insurance #4 D&O liability insurance #4 Multi-peril crop Insurance #7 *: Excess workers’ compensation: direct premiums written in FY2018 (Source: S&P Global). Medical stop-loss insurance: direct premiums written in FY2017 (Source: NAIC). D&O liability insurance: direct premiums written in FY2018 (Source: S&P Global). Multi-peril crop insurance: Gross premiums written in FY2018 of FY2018 MPCI (Multi-Peril Crop Insurance) (Source: USDA Risk management Agency). Growth / profitability outperform the U.S. market ■ Top-line CAGR Comparison with market ■ Combined ratio 6.1% +0.4pt FY2018 Comparison with market 96.1% 3.2pt Favorable 15 Copyright (c) 2019 Tokio Marine Holdings, Inc. *: CAGR: Net premiums written on a local currency basis between FY2015-FY2018. Source: S&P Global. 0:13:38.4 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Broad range of business expansion in emerging countries Strategic expansion mainly in large markets with high growth potential Our major P&C business network in emerging countries India ? IFFCO-TOKIO General Insurance Thailand ? Tokio Marine Insurance (Thailand) ? Safety Insurance Philippines ? Malayan Insurance Indonesia ? PT Asuransi Tokio Marine Indonesia M/S 4% No. 9 M/S 8% No. 3 M/S 11% No. 1 No. 15 M/S 2% $25bn $8bn $2bn $5bn $5bn $10bn South Africa ? Hollard Holdings $36bn Malaysia ? Tokio Marine Insurans (Malaysia) Brazil ? Tokio Marine Seguradora M/S 10% No. 2 M/S 6% Source: AXCO, SUSEP, SWISS Re, FSCA Financial Sector Conduct Authority. Note: The figures in circles are P&C insurance premiums in each country in FY2017, the size of circles is market size. No. 6 M/S 5% No. 5 Copyright (c) 2019 Tokio Marine Holdings, Inc. 16 0:14:16.6 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Our M&A up to the Present Established strong growth and profit diversification led by key cross-border M&A 2000 2000 Business unit profit 2002 2019 Projections 2007 2007 2012 2012 2015 2015 2018 2018 3% 47% Capture emerging market growth and further geographical diversification ■ Int’l Business ■ Others Established material presence in Lloyd's (UK) and the U.S. Developed footholds in non-Japanese business Reinsurance Business P&C Emerging markets Life Emerging markets Acquired in 2008.3 Acquired in 2008.12 Further growth, diversification and capital efficiency Acquired in 2018.8 Invested in 2018.12 Strategic review of our business portfolio Divestment of reinsurance subsidiaries Acquired in 2012.5 Acquired in 2015.10 (-2000) Business development focused on Japanese clients Copyright (c) 2019 Tokio Marine Holdings, Inc. 17 0:15:35.6 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Bolt-on M&A Execute strategic bolt-on M&A by leveraging our international Group companies’ insights and expertise 2015(Crop) January 2015 In Pro Ag International Ag (Crop) April 2017 (Excess W/C) December 2018 Midlands High success rate Long-term business relationships and deep understandings of the companies (P.A.) June 2015 AJF (Medical stop-loss) October 2017 AIG business acquisition (Crop) April 2019 AAIS (Assistance service) January 2016 On Call International (Property/flood) January 2018 WNC (Surety/credit) April 2019 BCC Accumulated Know-how TMHCC executed over 50 bolt-on M&As (Surety) February 2016 Bail USA (Liability) October 2018 Qdos (Cyber/liability) April 2019 NAS Disciplined M&A Strategic portfolio adjustment forecasting the future business environment Bail USA Divestment in April 2019 (Surety) Out Copyright (c) 2019 Tokio Marine Holdings, Inc. Above colors represent the acquiring companies. TMHCC PHLY TMK DFG TMMA (Australia) 18 0:16:49.9 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Strong Track Records The U.S. 3 companies realized strong growth exceeding the market after joining Tokio Marine Group Top-line*1 (billions of USD) Bottom-line*2 Philadelphia 7.1% U.S. P&C Market 3.4 Philadelphia + 1.7 3.6% 2018 2008-2018 CAGR 6.6% Joined in 2008.12 1.0 2008 (billions of USD) 2008-2019 (Projections) CAGR 2.4 Delphi 6.8% U.S. P&C Market 1.5 5.1% + 15.0% Delphi Joined in 2012.5 1.0 2011 (billions of USD) 2018 2011-2018 CAGR 2011-2019 (Projections) CAGR 3.5 TMHCC 7.3% U.S. P&C Market 2.8 5.8% TMHCC + 9.9% Joined in 2015.10 2.5 2015 2018 2015-2018 CAGR 2015-2019 (Projections) CAGR *1: Net premiums written on a local accounting basis. *2: After tax profits on a local accounting basis. Copyright (c) 2019 Tokio Marine Holdings, Inc. 19 0:17:23.0 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Our M&A Strategy and Criteria Execute strategic M&A targeting emerging countries such as Asia as well as developed countries while maintaining discipline M&A strategy Developed markets M&A including Bolt-on M&A (Pursuing growth opportunities & risk diversification) Target Target Company Criteria Definite criteria for self-discipline Cultural fit Profitability Solid business model Emerging markets M&A (Capturing high market growth & risk diversification) Cost of Equity Hurdle rate + risk premium + country interest rate spread Copyright (c) 2019 Tokio Marine Holdings, Inc. 20 0:18:36.6 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Our Aligned Group Management Globally leverage excellent personnel and expertise of the Group Appointment as Co-Head Donald Sherman Senior Managing Executive Officer Co-CIO (Group Co-Chief Investment Officer) (Ref.) Global Committees ERM Committee Christopher Williams Senior Managing Executive Officer Co-Head of International Business Co-CRSO ERM Delphi Financial Group CEO (Group Co-Chief Retention Strategy Officer) Expertise across the Group Internal Audit Gary Oliver Chairperson of International Internal Audit Committee Reserving Daniel Thomas International Executive Committee International Insurance Chairperson of International P&C Reserving Actuary Committee Global Retention Strategy Committee Underwriting HR Caryn Angelson TMNAS(U.S.)CHRO&CLO (additional post: HD) Risk Management Thomas Weist Tokio Marine Technologies CEO (additional post: HD, TMHCC) Global Investment Strategy Committee Investment Specialty Philippe Vezio TM Asia Deputy CEO & Chief U/W Officer (Transferred form TMHCC Barcelona) Cyber Insurance Daljitt Barn Cyber Centre of Excellence Global Head of Cyber Risk Global Information Technology Committee IT Copyright (c) 2019 Tokio Marine Holdings, Inc. 21 0:19:33.3 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Our Group Synergies Maximizing Group synergies by leveraging global network and Group-wide expertise, etc. Group synergies Impact on profits from expanding Group synergies (millions of USD) Revenue Leverage Global Network Investment Leverage Delphi’s Asset Management Capabilities 310 Group Synergies Annual results: USD 310mn Cost Leverage Group Resources Economies of Scale 170 Capital Optimize Retention/Reinsurance on a Group basis 2016 2018 22 Copyright (c) 2019 Tokio Marine Holdings, Inc. 0:20:05.1 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Disciplined Capital Policy Capital policy based on ESR grid ESR*1 Implementation of ; ? Business investment, and/or ? Additional risk-taking, and/or ? Shareholder return ESR (trillions of JPY) 201% 5.1 2.5 2.6 174% 4.6 210% Strategic consideration of ; Target Range ? Business investment, and/or ? Additional risk-taking, and/or ? Shareholder return 2017 Risk Net asse value 2018 ESR Risk is calculated using capital model based on 99.95%VaR. (equivalent to AA credit rating) 150% ? Aiming to recover the capital level through accumulation of profits ? Control of risk level by reducing risk taking activities Level of investment & shareholder return (billions of JPY) 100% ? De-risking ? Consideration of capital increase ? Review of shareholder return policy 80.0 284.1 150.0 117.6 2017 ? Net income (financial accounting) ? Dividends total 100.0 274.5 125.0 128.0 2018 ? Capital level adjustment ? Business investment*2 *1: Economic Solvency Ratio Copyright (c) 2019 Tokio Marine Holdings, Inc. *2: Aggregated major business investments. 23 0:21:19.7 I. Business & Capital Strategy II. Highlights III. M&A Strategy IV. Shareholder Return Shareholder Return Policy Dividend ? Payout ratio is above 35% of 5-year average of adjusted net income ? Payout ratio*1 will be raised gradually toward our mid-term goal, the same level as global peers Capital level adjustment ? Adjustment of capital level will be executed with flexibility through share repurchases and other means based on comprehensive consideration of market conditions, business investment opportunities, and other relevant factors 180 160 DPS (yen) 190 High level shareholder return 140 Global Peer Level*4 38% 35% Payout Ratio*1 35% 36% 2016 2017 2018 (Plans) 2019 (Projections) Our Goal Dividends total*2 (billions of JPY) 105.3 50.0 117.6 150.0 128.0 125.0 134.2 TBD *1: Payout ratio is on an original projections basis. *2: 2019 (Projections) is before reflecting share repurchases. *3: Total amount approved by the announcement date of financial results of respective years. 2018 (Plans) includes one-time dividend of \50.0bn. *4: Payout ratio of global peers is currently approx. 50%. Capital adjustment*3 (share repurchases, etc.) (billions of JPY) Copyright (c) 2019 Tokio Marine Holdings, Inc. 24 (Blank Page) Copyright (c) 2019 Tokio Marine Holdings, Inc. 25 Reference ? Progress of Mid-Term Business Plan ? Tokio Marine Holdings Key Statistics ? Return to Shareholders ? Business Unit Profits ? Reconciliation of Business Unit Profits and Adjusted Net Income ? Adjusted Net Income and Business Unit Profits ? Definition of Terms ? Reconciliation of Adjusted Net Income / Adjusted Net Assets ? Reconciliation of Business Unit Profits ? Mid-Term Business Plan Group Management Framework ? ESR and Sensitivity ? Basic Information (Domestic Non-Life) ? Basic Information (Domestic Life) ? Basic Information (International Insurance) ? Group Asset Management ? Initiatives of Digital Strategy ? ESG (Sustainably Enhancing Corporate Value) ? Impact of FX Rate Change on the Group’s Financial Results ◆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. TMHCC : Tokio Marine HCC TMK : Tokio Marine Kiln TMR : Tokio Millennium Re Copyright (c) 2019 Tokio Marine Holdings, Inc. 26 Progress of Mid-Term Business Plan:Group total Favorable progress of adjusted net income and adjusted ROE Adjusted net income Adjusted ROE 2020 Plan JPY400 - 450bn (CAGR 3 - 7%)*1 (billions of JPY) 2020 Plan ≧10% 400.0 341.4 280.9 8.6% 7.2% 10.4% 2017 Domestic non-life Net incurred losses relating to natural catastrophes*2 (billions of JPY) 2018 2019 Projections 2017 2018 2019 Projections 76.3 87.2 163.5 251.3 45.8 297.1 52.5 46.0 98.5 *1: CAGR is calculated based on a normalized basis of \372.0bn in FY2017. Nat-cat losses are normalized to an average annual level and FX effects and one time impact of U.S. Tax Reform are excluded. *2: Before-tax, business unit profits basis. International insurance Total Copyright (c) 2019 Tokio Marine Holdings, Inc. 27 Progress of TMNF Mid-Term Business Plan: TMNF Net premiums written 2020 Plan CAGR+1% or more Business unit profits 2020 Plan CAGR+1% or more* Combined ratio approx. 92-93%* ? Progress is in line with our plan through growth of specialty insurance and fire insurance (billions of JPY) ? Projecting improvement in profitability in FY2019 despite a significant decline in FY2018 due to the record largest natural catastrophes (billions of JPY) 2,217.0 2,144.7 2,166.6 137.1 135.0 18.7 2017 2018 2019 Projections C/R 2017 2018 2019 Projections (Private Insurance E/I basis) 93.9% 102.2% 92.1% Copyright (c) 2019 Tokio Marine Holdings, Inc. *: After-tax profit decreases by approx. \28.0bn and C/R worsens by approx. 2pt due to the impact of consumption tax increase and revision of law of obligation. 28 Progress of Mid-Term Business Plan: TMNL New policies ANP 2020 Plan CAGR +1% or more Business unit profits 2020 Plan MCEV growth rate CAGR +4% or more ? Continuously promote sales of protection-type products despite sales decrease of products for corporations (billions of JPY) ? Aim to achieve mid-term plan through steady accumulation of new businesses while 2018 year-end MCEVs decreased due to economic environment change such as decline of interest rate (billions of JPY) 102.1 74.6 45.0 1,248.7 1,076.0 1,125.0 2017 2018 2019 Projections 45.0 834.0 Year-end MCEV *1 Business unit profits*2 New business value + Existing business contribution 2017 2018 * Impact of changes in economic environment : -184.6 2019 Projections 1,125.0 49.0 70.0 New Policies ANP In-force policies ANP 102.1 852.7 74.6 857.7 1,248.7 99.0 78.0 1,076.0 -158.6 78.3 *1: Figures of FY2017 and FY2018 are after payment of shareholder’s dividends. FY2019 projections are before payment of shareholder’s dividends. *2: Before payment of shareholder’s dividends. Copyright (c) 2019 Tokio Marine Holdings, Inc. 29 Progress of the Mid-Term Business Plan:International Insurance Business Net premiums written CAGR + approx. Business unit profits CAGR + approx. 2020 Plan 5% 2020 Plan 11% ? Steadily growing despite the negative impact of the reinsurance businesses divestment (billions of JPY) ? The progress is in line with our plan (billions of JPY) 1,766.3 1,741.0 1,754.0 176.2 144.1 177.0 2017 FX Rate (USD/JPY) Excluding reins. biz. 2018 18.12E JPY 111.0 1,636.6 2019 Projections 19.3E JPY 110.9 1,754.0 FX Rate (USD/JPY) Excluding reins. biz. 2017 17.12E JPY 113.0 160.2 2018 18.12E JPY 111.0 163.2 2019 Projections 19.3E JPY 110.9 177.0 17.12E JPY 113.0 1,594.8 Copyright (c) 2019 Tokio Marine Holdings, Inc. 30 Tokio Marine Holdings Key Statistics FY2008 Net income (billions of yen)*1 Shareholders' equity after tax (billions of yen) FY2009 128.4 2,169.0 163 2,754 6.8% 0.96 46.2 52.0 76.5 -9.4 95 FY2010 71.9 1,886.5 92 2,460 3.5% 0.90 20.4 27.5 24.8 -0.7 187 FY2011 6.0 1,839.6 7 2,399 0.3% 0.95 30.7 2,301.6 40 3,001 1.3% 0.76 -26.1 15.9 -11.9 2.6 206 FY2012 129.5 2,340.7 168 3,052 6.2% 0.87 163.1 2,746.5 212 3,580 6.5% 0.74 48.3 110.3 69.2 -18.7 115 FY2013 184.1 2,712.7 239 3,536 7.3% 0.88 243.7 3,172.5 317 4,135 8.2% 0.75 34.0 104.5 136.9 2.5 109 FY2014 247.4 3,578.7 323 4,742 7.9% 0.96 323.3 4,103.4 423 5,437 8.9% 0.83 122.5 139.8 145.5 4.0 112 FY2015 254.5 3,484.7 337 4,617 7.2% 0.82 351.9 3,599.3 466 4,769 9.1% 0.80 126.0 -188.1 131.8 7.3 122 FY2016 273.8 3,542.1 363 4,722 7.8% 0.99 406.7 3,812.4 539 5,082 11.0% 0.92 167.6 373.5 169.5 6.6 117 FY2017 284.1 3,805.1 382 5,245 7.7% 0.90 341.4 4,086.4 459 5,633 8.6% 0.84 144.3 98.4 144.1 7.2 108 FY2018 274.5 3,574.2 383 5,058 7.4% 1.06 280.9 3,763.1 391 5,325 7.2% 1.01 18.9 -158.6 176.2 6.8 107 23.1 1,627.8 29 2,067 1.1% 1.16 5.1 -57.2 20.8 -21.1 50 Financial accounting basis EPS (yen) BPS (yen) ROE PBR Adjusted net income (billions of yen) Adjusted net assets (billions of yen) KPI Adjusted EPS (yen) Adjusted BPS (yen) Adjusted ROE Adjusted PBR Domestic non-life insurance business Business Unit Profits *2 Domestic life insurance business International insurance business Financial and general businesses (billions of yen) Sales of business-related equity holdings (billons of yen) 2009/3E Adjusted number of issued and outstanding shares *3 (thousands of shares) Market capitalization (billions of yen) Share price (yen) Percentage change (Reference) TOPIX Percentage change 2010/3E 787,605 2,118.3 2,633 9.9% 978.81 26.5% 2011/3E 766,820 1,789.3 2,224 - 15.5% 869.38 - 11.2% 2012/3E 766,928 1,827.1 2,271 2.1% 854.35 - 1.7% 2013/3E 767,034 2,039.2 2,650 16.7% 1,034.71 21.1% 2014/3E 767,218 2,383.9 3,098 16.9% 1,202.89 16.3% 2015/3E 754,599 3,438.0 4,538.5 46.5% 1,543.11 28.3% 2016/3E 754,685 2,878.6 3,800.0 - 16.3% 1,347.20 - 12.7% 2017/3E 750,112 3,536.2 4,696.0 23.6% 1,512.60 12.3% 2018/3E 725,433 3,541.9 4,735.0 0.8% 1,716.30 13.5% 2019/3E 706,557 3,807.0 5,362.0 13.2% 1,591.64 - 7.3% 787,562 1,926.8 2,395 - 34.9% 773.66 - 36.2% *1: From FY2015: The figure is "Net income attributable to owners of the parent" *2: Until FY2014: The figures are "Adjusted earnings" (Former KPI), domestic life insurance business is presented on TEV (Traditional Embedded Value) basis *3: All figures exclude the number of treasury shares held from the total number of the shares issued Copyright (c) 2019 Tokio Marine Holdings, Inc. 31 Return to Shareholders FY2007 Dividends per share Dividends total 48yen 38.7bn yen FY2008 48yen 38.0bn yen FY2009 50yen 39.4bn yen FY2010 50yen 38.6bn yen FY2011 50yen 38.3bn yen FY2012 55yen 42.2bn yen FY2013 70yen 53.7bn yen FY2014 95yen 72.2bn yen FY2015 110yen 83.0bn yen FY2016 140yen 105.3bn yen FY2017 160yen 117.6bn yen FY2018 180yen (Plan) 128.0bn yen FY2019 Projections 190yen 134.2bn yen *3 Adjustment of capital level (share repurchases, etc.) *1 90.0bn yen 128.7bn yen 50.0bn yen 88.0bn yen 39.4bn yen 50.0bn yen 88.6bn yen 38.3bn yen 42.2bn yen 53.7bn yen 50.0bn yen 122.2bn yen 83.0bn yen 50.0bn yen 155.3bn yen 150.0bn yen 267.6bn yen 125.0bn (Plan) 253.0bn (Plan) TBD TBD Total distributions to shareholders Adjusted net income Average adjusted net income Payout ratio *2 30.7bn yen 163.1bn yen 243.7bn yen 323.3bn yen 351.9bn yen 220.0bn yen 38% 406.7bn yen 295.0bn yen 36% 341.4bn yen 330.0bn yen 36% 280.9bn yen 340.0bn yen 38% 400.0bn yen 355.0bn yen 38% Adjusted net income was adopted as a new KPI in FY2015. (Figures from FY2011 to FY2014 were calculated as a reference) <Reference : Financial accounting basis> Net income (Consolidated) Payout ratio Total shareholder return ratio 108.7bn yen 36% 118% 23.1bn yen 165% 381% 128.4bn yen 31% 31% 71.9bn yen 54% 123% 6.0bn yen 639% 639% 129.5bn yen 33% 33% 184.1bn yen 29% 29% 247.4bn yen 29% 49% 254.5bn yen 33% 33% 273.8bn yen 39% 57% 284.1bn yen 42% 94% 274.5bn yen 47% 92% 325.0bn yen 41% TBD *1: Total amount approved by the announcement date of financial results of respective years. FY2018 includes one-time dividend of 50bn yen *2: Payout ratio to average adjusted net income *3: Before reflecting the share repurchses basis Copyright (c) 2019 Tokio Marine Holdings, Inc. 32 Business Unit Profits (billions of yen) Business Domain FY2017 Results FY2018 Results FY2019 Projections Reconciliation of Business Unit Profits and Adjusted Net Income Gains on sales of business-related equites (billions of JPY) International insurance 177.0 (47%) Domestic non-life 142.0 (38%) International Financial /general insurance +55.5 400.0 Domestic life Other difference adjustments, etc between MCEV and financial accounting 177.0 5.0 -18.0 -10.5 Domestic life Business unit profits (FY2019 projections) Total \373.0bn* Domestic non-life 49.0 142.0 Domestic life (13%) 49.0 Business unit profits Adjusted net income *: Total of business profits of domestic non-life, domestic life, international insurance, financial/general businesses Copyright (c) 2019 Tokio Marine Holdings, Inc. 34 Adjusted Net Income and Business Unit Profit Adjusted Net Income (Group total) Enhancing transparency and comparability / Linking with shareholder returns ? Business Unit Profits Creating long-term corporate value ? 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 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 Use MCEV (market-consistent embedded value) for domestic life, which reflects the economic value of the business more accurately ? ? Main differences Adjusted Net Income Domestic non-life Gains or losses on sales of business-related equities Provision for reserves of capital nature, etc. Domestic life Other than the above Amortization of goodwill and other intangible fixed assets Included Excluded Adjust the financial accounting basis net income Business Unit Profits Excluded Excluded Increase in MCEV during the current fiscal year Excluded Excluded Copyright (c) 2019 Tokio Marine Holdings, Inc. 35 Definition of Terms Definition of Adjusted Net Income / Adjusted Net Assets / Adjusted ROE Adjusted Net Income*1 = 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 and business investment equities Other extraordinary gains/losses, valuation allowances, etc. Adjusted Net Assets *1 = 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 (average balance basis) *1: Each adjustment is on an after-tax basis *2: Net income attributable to owners of the parent in the consolidated financial statements *3: In case of reversal, it is subtracted from the equation *4: ALM: Asset Liability Management. Excluded since it is counter balance of ALM related liabilities *5: For some of the life insurance companies, Business Unit Profits is calculated by using the definition in Other businesses (head office expenses, etc. are deducted from profits) *6: EV: Embedded Value. An index that shows the sum of the net present value of profits to be gained from policies in-force and the net asset value Definition of Business Unit Profits ? Non-life insurance business Business Unit Profits*1 = Net income Provision for + catastrophe loss reserves*3 + Provision for price fluctuation reserves*3 Gains or losses on sales or valuation of ALM*4 bonds and interest rate swaps ? Life insurance business*5 Business Unit Profits*1 Increase in EV*6 = during the current fiscal year Capital transactions such as capital increase - Gains or losses on sales or valuation of fixed assets, business-related equities and business investment equities Other extraordinary gains/losses, valuation allowances, etc. ? Other businesses Net income determined in accordance with financial accounting principles Definition of Net Asset Value Net Asset Value *1 = Net assets (consolidated) Catastrophe loss reserves Contingency reserves Price fluctuation reserves Goodwill and other intangible fixed assets Planned distribution to shareholders Value of life insurance policies in-force + + + - - + + Others Copyright (c) 2019 Tokio Marine Holdings, Inc. 36 Reconciliation of Adjusted Net Income / Adjusted Net Assets (billions of JPY) ? Adjusted Net Income*1 ? Adjusted Net Assets*1 ? Adjusted ROE FY2018 Results FY2019 Projections YoY Change FY2018 Results FY2019 Projections YoY Change FY2018 Results FY2019 Projections YoY Change Net income attributable to owners of the parent (consolidated) Provision for catastrophe loss reserves *2 274.5 -97.6 +1.0 325.0 -9.0 +1.0 +6.0 +0.0 50.4 88.6 -0.0 Net assets(consolidated) Catastrophe loss reserves 3,574.2 3,688.0 113.7 Net income(consolidated) 274.5 325.0 50.4 +741.1 +732.0 -9.1 Net assets(consolidated)* Financial acccounting basis ROE * average balance basis 3,689.7 3,631.0 -58.7 Provision for contingency reserves *2 Contingency reserves Provision for price fluctuation reserves *2 +40.8 +42.0 1.1 7.4% 9.0% 1.6pt +5.7 *3 0.2 -1.2 Gains or losses on sales or valuation of ALM bonds and interest rate swaps Gains or losses on sales or valuation of fixed assets and business investment equities Amortization of goodwill and other intangible fixed assets Other extraordinary gains/losses, valuation allowances, etc. +1.2 Price fluctuation reserves Goodwill and other intangible fixed assets +78.1 +84.0 5.8 FY2018 Results FY2019 Projections YoY Change +25.4 +0.0 -25.4 -671.3 -595.0 76.3 Adjusted Net Income +69.7 +0.7 280.9 +77.0 +0.0 400.0 7.2 -0.7 119.0 Adjusted Net Assets 3,763.1 3,951.0 187.8 280.9 400.0 119.0 Adjusted Net Assets* 3,924.7 3,857.0 -67.7 Adjusted Net Income Adjusted ROE * average balance basis 7.2% 10.4% 3.2pt *1: Each adjustment is on an after-tax basis *2: In case of reversal, it is subtracted from the equation *3: ALM: Asset Liability Management. Excluded since it is counter balance of ALM related liabilities Copyright (c) 2019 Tokio Marine Holdings, Inc. 37 Reconciliation of Business Unit Profits (billions of yen) ? Domestic Non-Life*1 (TMNF) ? International Insurance*1 FY2018 Results FY2019 Projections YoY FY2018 Results FY2019 Projections Net income for accounting purposes 261.3 250.0 -11.3 Overseas subsidiaries Net income for accounting purposes Difference with EV (Life) Adjustment of non-controlling interests 155.1 150.0 Provision for catastrophe loss reserves *2 -93.8 -11.5 82.3 -1.2 -1.5 -1.4 +25.4 176.2 177.0 Provision for price fluctuation reserves *2 +3.9 +4.0 0.0 Difference of subsidiaries covered Gains or losses on sales or valuation of ALM*3 bonds and interest rate swaps Gains or losses on sales or valuation of fixed assets, business-related equities, and business investment equities Intra-group dividends +0.7 +0.2 -0.5 Other adjustments Business Unit Profits *4 -66.0 -55.5 10.5 -96.8 -62.2 34.6 Other extraordinary gains/losses, valuation allowances, etc +9.5 +10.0 0.4 Business Unit Profits 18.7 135.0 116.2 *1: Each adjustment is on an after-tax basis *2: In case of reversal, it is subtracted from the equation *3: ALM: Asset Liability Management. Excluded since it is counter balance of ALM related liabilities *4: Amortization of other intangible fixed assets, head office expenses, etc. Copyright (c) 2019 Tokio Marine Holdings, Inc. 38 Mid-Term Business Plan Group Management Framework Based on ERM (Enterprise Risk Management), realize profit growth while maintaining financial soundness and strategically allocating capital Generate profits Sustainable profit growth Domestic non-life insurance business ? Sustainable growth as the Group core business ? Change our portfolio by sales expansion of specialty insurance Domestic life insurance business ? Expand corporate value based on the economic value as a growth driver contributing to the long-term profit for the Group ? Increase in protection-type products International insurance business ? Realize high organic growth and implement new business investment as a growth driver of the Group The Group total ? Generate further synergy effect ? Appropriate control of business expenses Efficient deployment of capital Invest for growth ? Invest in new business with diversification effects ? Prior investment to establish future profit base(new products/new technology) Enterprise Risk Management (ERM) Risk reduction/control ? Continuing sales of business-related equities, control of the risk of nat-cat losses and interest rates Shareholder return ? Raise level of shareholder dividend ? Adjustment to the appropriate level of capital via flexible share repurchase, etc. Strategic capital allocation Profit growth Copyright (c) 2019 Tokio Marine Holdings, Inc. Enhancement of shareholder return Maintain financial soundness 39 ESR and Sensitivity ? ESR as of Mar. 31, 2019 declined to 174% (within target range) due to a decrease in net asset value and an increase in risk amount owing to decline in Yen interest rates, etc. offsetting positive impact associated with the profit contribution ESR ESR sensitivity 197% Factors of change in net asset value ? Contribution of 2H FY18 adjusted net income ? Decrease in unrealized gains of business related equities ? Decrease in MCEV relating to a decline of interest rates ? Shareholder return etc. 174% Mar. 31, 2019 174% 179% 168% 189% 158% 174% 174% Stock price +30% -30% Net asset value Risk 2.6 Trillion yen Trillion yen 5.1 Factors of change in risk ? Sales of business-related equities ? Decrease in equity risk due to decline in stock price ? Increase in equity risk relating to a decline of interest rates etc. Net asset value Risk Interest rate +50bp -50bp FX rate 10% 2.6 Trillion yen Trillion yen 4.6 appreciation depreciation 10% Sep. 30, 2018 Mar. 31, 2019 \24,120 Nikkei Stock Average \21,205 Stock price: Continue to sell business-related equities Interest rate: Control the impact of interest rate fluctuation through ALM FX rate: Limited impact on ESR (Ref.) Definition of Net Asset Value Net Asset Value = Consolidated net asset on financial accounting basis + Liability of capital nature (catastrophe loss reserves, price fluctuation reserves, etc.) (after-tax basis) - Goodwill, etc. - Planned distribution to shareholders + Value of life insurance policies in-force + Others Copyright (c) 2019 Tokio Marine Holdings, Inc. 40 Basic Information (Domestic Non-Life) - TMNF ? Trend of net premiums written and combined ratio C/R (Private Insurance W/P Basis) Net Premiums Written (All lines, billions of JPY) ? Premium composition by line (FY2018 net premiums written basis) Marine 2.9% 99.0% 103.3% 99.4% 97.9% 97.2% 97.4% 91.2% 92.0% 89.8% 89.2% 89.6% 2,217.0 CALI 12.5% Auto 49.2% *2: Categorized as “Others” in Summary of Financial Statements Fire 13.0% 93.6% Specialty *2 + P.A. 22.4% 1,813.4 1,736.0 1,742.7 1,783.0 1,869.6 1,966.3 2,036.7 2,128.3 2,116.1 2,144.7 2,166.6 ? Premium composition by sales channel (FY2018 managerial accounting basis) Financial institutions 3.6% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (Projections) Others 14.5% Auto repair shop 8.9% Full-time agents 27.3% ? Statistics of combined ratio and loss ratio (private insurance E/I Basis) FY2012 Net E/I C/R*1 E/I loss ratio (Excluding natural catastrophes) Expense ratio 99.6% 66.8% 62.8% 32.8% FY2013 97.2% 65.0% 60.1% 32.2% FY2014 90.6% 58.5% 56.9% 32.2% FY2015 92.7% 60.1% 56.0% 32.6% FY2016 90.4% 57.7% 54.8% 32.7% FY2017 93.9% 61.4% 57.0% 32.5% FY2018 102.2% 70.0% 57.3% 32.3% FY2019 Projections Auto dealership Corporate 20.3% 25.5% 92.1% 59.2% 56.6% 32.9% ? Market share Direct insurer*3 4.5%*4 (excluding reinsurance companies) (FY2017 net premiums written basis) TMNF 26.8% NF 1.8% *1: Net E/I C/R=E/I loss ratio + W/P expense ratio Copyright (c) 2019 Tokio Marine Holdings, Inc. *3: Sony, American home, AXA, Mitsui Direct, Saison, SBI, E.design, Sonpo 24 Source Insurance Statistics (Sonpo Toukeigo) *4: Market share of auto insurance: 7.0% 41 Basic Information (Domestic Non-Life) - TMNF ? Trend of underwriting results in auto insurance (W/P basis combined ratio) Factors of profitability deterioration ? 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 103.6% 102.9% 103.8% 102.6% 98.5% 94.0% 91.5% 90.1% 89.4% 2016 90.3% 94.3% Measures to improve profitability ? Efforts to decrease business expenses such as operational streamlining ? ? ? ? Product and rate revisions Introduction of age-bracket rate plans Revisions of the Grade Rating System Other measures to improve underwriting result ? 92.8% 2008 2009 2010 2011 2012 2013 2014 2015 2017 2018 Projections 2019 ? Trend of auto insurance policy renewal ratio, E/I basis combined ratio and loss ratio FY2011 Policy renewal ratio FY2012 95.3% 100.2% 69.4% FY2013 95.6% 95.7% 65.3% FY2014 95.6% 91.6% 61.1% FY2015 95.7% 91.4% 60.5% FY2016 95.9% 91.0% 60.2% FY2017 95.8% 91.8% 60.8% FY2018 95.6% 93.1% 62.3% FY2019 Projections - 94.6% 62.8% 95.1% 102.9% 70.7% Net E/I C/R* E/I L/R *: Net E/I C/R =E/I loss ratio + W/P expense ratio Copyright (c) 2019 Tokio Marine Holdings, Inc. 42 Basic Information (Domestic Life) - TMNL Major Products (Products lineup as of May 2019) (whole life insurance/ term insurance/ variable insurance) Receive benefits as if receiving monthly salary in times of needs Enhance coverage for inability to work (Premium Series) Death insurance Variable annuities for future asset accumulation while securing coverage in time of needs Whole life insurance for longevity in case of death and nursing care (Premium Series) ? Household Income Term Insurance NEO (Disability Plan) Plus ? Market Link Death, severe disability, and maturity insurance amount fluctuate based on the performance results. Ensure security of minimum coverage for death and severe disability insurance amount ? Long-life Support Whole Life Insurance In addition to severe disability and death, this product offers monthly benefits in the event of the inability to work or the need for nursing care due to certain illness In addition to severe disability and death, this product benefits in case the policyholder becomes second degree nursing care or above, etc. under the public nursing care insurance system Medical insurance with lifelong coverage for disease and injury Insurance to secure coverage in case of cancer (Premium Series) Medical insurance that supports health enhancement which refunds a portion of insurance premiums by walking (Premium Series) cancer insurance (Premium Series) Medical and ? Medical Kit NEO ? Medical Kit R A medical insurance product, which covers hospitalization, surgery and radiation therapy due to illness or injury ? Cancer Treatment Support Insurance NEO ? Cancer Insurance R ・ Aruku Hoken Refund a portion of insurance premiums in response to health enhancement activities using sensing technology (wearable device) This product offers diagnosis benefit, etc. to the policyholder Product series with “R” function Product series with “R” function *: Features of product series with “R” function: R (return) function = We return the balance of premiums paid excluding benefits, etc. (refund benefits to health) R (reserve) function= We continue to provide lifelong coverage with same premiums at the time of enrollment after paying refund benefits for health *: Premium series are living protection products that are unique and include extensive coverage Copyright (c) 2019 Tokio Marine Holdings, Inc. 43 Basic Information (International Insurance 1) ? FY2019 Projections by regions FY2017 Net Premiums Written (billions of JPY) FY2018 FY2019 Projections YOY FY2019 vs FY2018 Actual Actual Original FY2017 Basic Information (International Insurance 2-Ⅰ) ? Strategies of Major Subsidiaries Business unit profits CAGR + approx. Strategies Results ? High renewal ratio and rate increases Renewal ratio Human services 32% 2020 Plan 5% ? Focus on niche markets Others 11% 88.7% 89.0% 89.3% (billions of JPY) Auto 7% Public services 8% Market composition (FY2018) 43.9 39.2 46.0 Sports & Rec. 11% Rate increases Real estate 19% Philadelphia Market average*2 2016 1.8% approx.0% 2017 1.5% approx.1% 2018 3.2% approx.2% Non profit organization D&O E&O 12% *2: Source: Willis Towers Watson ? Strong customer loyalty Net Promoter Score*1 61 68 ? Combined ratio 110% 105% 2017 FX rate (USD/JPY) 2018 18.12E JPY 111.0 2019 Projections 19.3E JPY 110.9 50 55 68 36 U.S. P&C market average 100% 17.12E JPY 113.0 95% 90% Philadelphia*3 2014 2015 2016 2017 2018 Recent (2017) Average of insurance industry 85% Philadelphia Also translated as `customer satisfaction.` 80% *1: Customer Loyalty: Indicator for knowing customer's intention of continuous use. 2014 2015 2016 2017 2018 *3: Local management accounting basis. Copyright (c) 2019 Tokio Marine Holdings, Inc. 45 Basic Information (International Insurance 2-Ⅱ) ? Strategies of Major Subsidiaries Business unit profits 2020 Plan CAGR + approx. Strategies ? Strength in employee benefits and retirement products/services Life insurance 55% Other life insurance 6.4% Non-life insurance 45% Excess workers’ compensation 20.8% Other non-life 23.7% Results ? High Investment Returns Average Investment Return 11% (billions of JPY) 7.08% 4.48% 6.51% 73.0 58.5 Including the one time positive impact of U.S. tax reform (+26.8) 61.0 Group life insurance 18.5% Disability 30.5% Products composition (FY2018) 2.52% 2001-2018 The recent 5years ? Delphi ? Benchmark (Barclays Aggregate Index) ? Diversified investment portfolio Others 7% Corporate bonds 12% Investment composition \2.3 Trillion (FY2018) ? Combined ratio 110% 105% 100% 2017 FX rate (USD/JPY) 2018 18.12E JPY 111.0 2019 Projections 19.3E JPY 110.9 Municipal bonds 33% Delphi* 17.12E JPY 113.0 Securitized bonds 24% Loans 24% 95% 90% 85% 80% 2014 2015 2016 U.S. P&C market average ? Abilities of gathering and analyzing information, leveraging its extensive networks such as external investment managers ? Cautiously balance the investment portfolio, reflecting changes in financial environments Copyright (c) 2019 Tokio Marine Holdings, Inc. 2017 2018 *: Local management accounting basis. Temporarily increase due to reserve provision in 2018. C/R for Jan-Mar in 2019 has improved to 98.5% 46 Basic Information (International Insurance 2-Ⅲ) ? Strategies of Major Subsidiaries Business unit profits CAGR + approx. Strategies Results ? Stable profitability Highest Lowest ProAssurance PartnerRe AXIS Everest Re Aspen Protective Argo Group 2020 Plan 7% ? Bolt-on M&A to reinforce our strengths ? A UK-based insurance agency holdings company ? Provide Professional Indemnity and Employers and Public Liability insurance via online platform (Oct. 2018) ? A US-based Managing General Agent, which mainly offers cyber and professional Indemnity insurance ? Wholly owned in order to capture high profitability and growth potential ? A US-based Crop Managing General Agent of AmTrust Group ? Aim to improve profitability through the business expansion C/R Volatility RLI Alleghany Arch Lowest TMHCC Chubb W.R. Berkley (billions of JPY) C/R decade average American Financial Travelers 48.0 45.1 45.3 (Apr. 2019) Markel Navigators CNA Hartford Highest Global Indemnity Source: Created by Tokio Marine from Company Reports, Dowling & Partners Analysis ( based on data through Dec. 31, 2018 ) (Apr. 2019) ? Combined ratio 110% 105% 100% 95% 2017 FX rate (USD/JPY) 2018 18.12E JPY 111.0 2019 Projections 19.3E JPY 110.9 ? Specialty insurance that are less dependent on the P&C market cycles approx. 62% Product composition (FY2018) U.S. P&C market average 17.12E JPY 113.0 ■Medical stop-loss ■Crop ■Surety, etc. 90% 85% 80% 2014 2015 2016 2017 TMHCC* 2018 Copyright (c) 2019 Tokio Marine Holdings, Inc. *: Local management accounting basis. 47 Basic Information (International Insurance 2-Ⅳ) ? Strategies of Major Subsidiaries Business unit profits Strategies ? Product portfolio to enhance stable profitability Growth field Results ? Improving Loss ratio 2020 Plan CAGR -% (billions of JPY) Including 2.0 from ‘Hollard’ 7.0 ? Profitable U.S. cover holder business ? Our distinctive specialty insurance products such as cyber and intellectual property coverages Shrinkage field 72.2% 62.3% 55.2% -0.1 ? Review and reduce underwriting of product lines/regions which are difficult to ensure profit in the mid-to-long term 2017 2018 2019 Projections -17.3 2017 FX rate (GBP/JPY) ? Underwriting products in Lloyd's 2018 18.12E JPY140.4 2019 Projections 19.3E JPY144.9 Others 11% Aviation 5% Reinsurance 9% A&H 7% Property 44% Products composition (FY2018) ? Combined ratio 115% 110% 105% 100% 95% 90% 85% 80% Lloyd’s market average 17.12E JPY151.9 TMK* ※ Figures above are a total of Europe & Middle East & Africa. Marine 15% Liability 11% Copyright (c) 2019 Tokio Marine Holdings, Inc. 2014 2015 2016 2017 2018 *: Local management accounting basis 48 Basic Information (International Insurance 2-Ⅴ) ? Strategies of Major Subsidiaries Business unit profits 2020 Plan CAGR + approx. Strategies Results ? Growth exceeding the market 175 8% ? Expanding the number of brokers Approx. 24 thou. Approx. 15 thou. Growth rate of Gross Premium ( 2014 is set at index value of 100 ) (billions of JPY) TMSR* 150 +12.4% CAGR +5.7% CAGR 9.2 6.0 Brazil market average 2014 2018 125 5.0 ? Provide systems and contact centers to support sales activities of brokers 100 2014 2015 2016 2017 2018 ? Product & Service strategies 2017 FX rate (BRL/JPY) ? Stable performance of Auto Loss Ratio 70% 2018 18.12E JPY 28.5 2019 Projections 19.3E JPY 28.3 ? Realize growth with profitability by flexibly adjusting premium rates ? Utilize wireless technology to reduce theft risk and develop specialized products ? Enhance service quality by providing inhouse contact center of road assistance service Brazil market average 60% 17.12E JPY 34.1 ※Some figures above include Mexico’s results. TMSR* 50% 2014 2015 2016 2017 2018 *: Local management accounting basis. Copyright (c) 2019 Tokio Marine Holdings, Inc. 49 Basic Information (International Insurance 3) ? Net Premiums Written ? Net premiums written in international insurance business 2,000 (billions of JPY) 1,800 1,741.0 1,654.4 1,766.3 1,754.0 Life (2019.3 Divestment) 1,600 Reinsurance 1,400 1,302.6 1,074.5 1,304.0 1,200 1,000 North America 800 734.3 544.0 413.9 362.6 526.5 600 499.7 400 Europe & Middle East & Africa South & Central America Asia & Oceania 319.5 240.2 118.7 200 0 FX* USD/JPY 2004 104.2 2005 118.1 2006 119.1 2007 114.1 2008 91.0 2009 92.1 2010 81.4 2011 77.7 2012 86.5 2013 105.3 2014 120.5 2015 120.6 2016 116.4 2017 113.00 2018 111.0 2019 (Projections) 110.9 Copyright (c) 2019 Tokio Marine Holdings, Inc. *: FX rates are as of Dec. 31 of each year. (FX rate for FY2019 Projections is as of end-Mar, 2019) 50 Group Asset Management ? Secure long term and stable investment income under the policy based on the characteristics of insurance liabilities with ALM at the core as well as strengthen investment structure across the Group Steady accumulation of overseas assets based on the policy reflecting the characteristics of insurance liabilities Investment synergy with Delphi AUM in Delphi (excluding Delphi’s own AUM) (billions of USD) Domestic bonds 39% Maintain stable yield Group income yield 4.0% 2.1% 1.6% 4.3% 2.3% 4.4% 4.5% 4.6% 4.7% Asset composition of TMHD (Consolidated) Others 18% Loans 4% 17.0 7.7 4.0 3.7 2018.3E Total Assets \22.5T (2019.3E) 10.7 4.3 6.4 2019.3E 5.0 12.0 2.2% 2.3% 2.3% 2.4% 1.6% 1.5% Balance of foreign securities, etc.* (trillions of yen) 10.0 1.4% 1.5% 1.5% 6.04 6.26 Foreign securities, etc.* 28% Domestic equities 11% 2021.3E (Plans) 2013 2014 Domestic 2015 2016 Overseas 2017 5.0 0.0 2018.3E 2019.3E *: Including international backed securities and beneficiary securities, etc. which are recorded except for foreign securities on financial accounting basis ■ Domestic subsidiaries: TMNF, TMNL, NF ■ Overseas subsidiaries: Philadelphia, Tokio Millennium Re, TMHCC, TMAIC Domestic & グループ overseas total 2018 (Ref.) Open market rate 4.0 3.0 Decision-making across the Group and strengthening of corporate functions Aligned Group operating structure under the Group Co-CIOs ? Prompt and effective decision making on issues across the Group and domestic/overseas challenges ? Discussion on asset management strategy and market analysis, etc. at the global investment strategy committee Copyright (c) 2019 Tokio Marine Holdings, Inc. Hirokazu Fujita Donald Sherman 2.0 1.0 0.0 ▲1.0 10y US Treasury 米国債 10年 日本国債 10年 10y JGB 2012/12 2013/12 2014/12 2015/12 2016/12 2017/12 2018/12 51 Group Asset Management Ongoing efforts to reduce business-related equities ? Book value of business-related equities declined to 39% from Mar. 31, 2002 through steady action ? Sold total amount of approx. \2.1 trillion yen*1 since FY2002 ? In this mid-term business plan, we will also plan to sell \100 billion or more a year *1: Market price at the time of sale Book value of business-related equities*2 Sales amount ? Previous mid-term business plan (2015-2017) 100 82 82 57 42 39 Plan : Sell \100.0bn or more every year Results: Sold \100.0bn or more every year FY 2015 2016 2017 3 years total Sales amount \122.0bn \117.0bn \108.0bn \347.0bn 2002.3E 2007.3E 2012.3E 2017.3E 2019.3E ? Mid-term business plan (2018-2020) Plan: Continue to sell \100.0bn or more every year Results: Sold \107.0bn in FY2018 52 *2: Figure at 2002.3E is set at index value of 100 Copyright (c) 2019 Tokio Marine Holdings, Inc. Initiatives of Digital Strategy Based on 3 concepts which are “Mission Driven”, “Fusion of people’s power and technologies” and “Global Digital Synergies”, pursue new values through collaboration with our diverse partners Partners Expand Customer Touch Points Major Initiatives ? AI based insurance recommendation ? Explore full digitization of insurance process ? Provide high CX insurance purchase system on EC websites ? Make quick judges of claims payment and automatize claims response by using data analysis and AI technology ? Realize prompt claims payment by using AI and satellites to specify the flooded area ? Consider to use big data analytics and AI technologies for claims service ? Consider to develop next generation products and services for autonomous driving age ? Predict employee absenteeism risks by using data analytics technologies ? Expand services to support company’s health & productivity management ? Develop a new products/services for diabetic patients that accounts for 10% of the population in India Copyright (c) 2019 Tokio Marine Holdings, Inc. Enhance Claims Service Drive R&D 53 ESG (Sustainably Enhancing Corporate Value) ~External Evaluation~ ? Tokio Marine Group has promoted ESG (Environment, Social, and Governance) through business activities, etc. and acquired high recognitions and got commendations in Japan and overseas SRI/ESG indices including Tokio Marine Group Japan ? Overseas Overseas Group companies were awarded : - “Best Places to Work in Insurance” in the U.S. - “Best Workplaces for Women” in Brazil ? Five Group companies and we received recognition under the 2019 Certified Health and Productivity Management Outstanding Organizations Recognition Program in the large enterprise category (white 500)“, and also we are selected as a “2019 Health & Productivity Stock” ? Selected as a "Nadeshiko Brand" in FY2018, following FY2013, FY2015 and FY2017 Disclosure ? Received “Best Resilience Award” and “Excellent Resilience Award” at the Japan Resilience Award 2019 ? Copyright (c) 2019 Tokio Marine Holdings, Inc. Received Ministerial Commendation as Model Example of Financial Institution Initiatives for Revitalizing Regional Economies for 3 consecutive years ? “Sustainability Report 2018” won “Excellent Sustainability Report Award of the 22nd Environmental Communication awards” as a excellent environmental report ? Our IR site received high evaluations from external institutions 54 ESG (Sustainably Enhancing Corporate Value) ~Promoting ESG~ ? ? Participate in international initiatives and conduct surveys, researches, and proposal making activities in order to contribute to a safe, secure and sustainable future Also, actively work on SDGs and contribute to the resolution of social issues by taking advantage of the expertise of insurance and risk consulting Our Group’s Initiatives UN Global Compact ? ? Signed and expressed support for the UNGC in 2005 Participated in "Training for Tomorrow’s Management", "SDGs Working Group", and "Disaster Risk Reduction Working Group“ in FY2018 United Nations Environment Programme(UNEP)/ Finance Initiative ? ? Principle for Responsible Investment ? Participated in the insurance committee as a representative director of Asia region In Dec. 2017, UNEP FI Asia Pacific Roundtable was held in Tokyo. Participated in the conference focusing on task force on Climaterelated Financial Disclosures (TCFD) and insurance Our Group companies, Tokio Marine & Nichido, Tokio Marine Asset Management and Tokio Marine Capital agreed with PRI and signed the principles UNISDR Private Sector Alliance for Disaster Resilient Societies Principles for Sustainable Insurance ? ? Signed in 2012 as a drafting committee member Joined in PSI TCFD Insurer Pilot Working Group from FY2018 Principles For Financial Action for the 21st century ClimateWise CDP IDF Eco First Japan Sustainable Investment Forum The Geneva Association Asia-Pacific Financial Forum Task Force on Climaterelated Financial Disclosure Forum for Integrated Corporate Disclosure and ESG Dialogue COOL CHOICE Copyright (c) 2019 Tokio Marine Holdings, Inc. 55 ESG (Sustainably Enhancing Corporate Value) ~Environment~ ? Actively contribute to environmental protection, biodiversity preservation, and creation of environmental values through our business ■ Creating a green society through insurance business ? Provide drone insurance to encourage broad use of drone that are environmental friendly Copyright (c) 2019 Tokio Marine Holdings, Inc. Examples of our approaches to environment ? Provide special insurance and services for solar power / Contribution to sustainable environment geothermal power generation companies to contribute to the broader adoption of clean energy Environmental liability Insurance of issuing insurance policies ? Contribute to the protection of natural environment by offering ? Promote web-based insurance contracts (clauses) and omission ■ Creating a green society through financial business Performance of the renewable energy fund* (as of the end of Mar. 2019) ? Provide funds* that invest in renewable energy generation facilities to facilitate the introduction of clean energy The amount of commitment: approx. ? Offer “Low-carbon Japanese Equity Fund” comprising \52.0 bn shares of corporations, actively reducing CO2 emissions Constructions: 42 Plants *: TM Japan solar energy fund 2012, 2013, 2014, TM Japan renewable energy fund 2017 ■ Initiatives to reduce environmental footprint “Carbon neutral” for 5 consecutive years” 163 115 2013 2014 2015 2016 2017 (Thousand tons) ? Achieve “carbon neutral” through planting mangroves and utilizing natural energy as well as working proactively to reduce CO2 emissions CO2 emissions CO2 fixation/reduction effects 56 ESG (Sustainably Enhancing Corporate Value) ~Social~ ? Contribute to solve social issues by providing safety and security to customers and society through our business ■ Response to large natural disasters ? Stay close to our customers in times of need and support the reconstruction of disaster areas and livelihoods victims in order to provide the earliest possible claims payment as “safety” Contribute to solve social issues through business ? Build a structure to concentrate on responding to Copyright (c) 2019 Tokio Marine Holdings, Inc. Examples of our approaches to society <Claims service structure set up after large natural disasters> Nationwide claims service offices Claims service system foundation Head office of disaster management task force Real time, paper less information provision Accident assessment Head office of disaster management task force Backup office Local response headquarters Establishment and operation of satellite offices Loading relief supplies onto a truck Check on the damage situation of customers ■ Providing insurance products for tackling social issues ? Developed the industry's first cover that responds to the improvement of autonomous driving system device aiming for a safe and secure car life ? Offer services utilizing our original drive recorder ? Contribute to the development of agriculture and ? Support customer health improvement by Aruku Hoken resolution of poverty problems by providing a lowcost product for farmers in India 57 ESG (Sustainably Enhancing Corporate Value) ~Social~ ■ Promoting health & productivity management ? Implement PDCA steadily in the aim of employees’ health promotion, revitalizing organization, and enhancing corporate value. Health & productivity management supporting companies Contribute to solve social issues through business ? Support our customers’ health & productivity ■ Support regional revitalization FY2018 approx. *: Based on our survey 1,000 companies management by leveraging the know-how accumulated in the Group Copyright (c) 2019 Tokio Marine Holdings, Inc. Examples of our approaches to society Companies TMNF assisted the formulation of BCPs ? Support to stabilize SME businesses through local governments, chambers of commerce, commerce and industry association, etc. expansion of local companies A cumulative total of approx. ? Active support to both inbound business and overseas ■ Promotion of active and equal participation 1,500 companies 258 people *: FY2016-FY2017 (Based on our survey) Trend of female managers (TMNF) ? Develop various systems that will promote active and equal participation and provide chances for female employees candidates ? Appoint female managers and develop management people 43 2007 ■ Realization of an inclusive society / Development of future generations For 2019, as of April 1 2019 ? Conduct Disaster Prevention Lessons and seminars to enhance disaster mitigation awareness ? Hold Dementia Supporters Training Programs and provide covers that support people with dementia ? Support the Japanese Para-Sports Association, the Japan Inclusive Football Federation, and the Special Olympics Nippon TMNF Support Tokyo 2020 as a Gold Partner (non-life insurance) of Olympic and Paralympic Games Tokyo 2020 58 ESG (Sustainably Enhancing Corporate Value) ~Governance~ ? ? ? In April 2016, globalized and strengthened Group management system by establishing Group Chief Officer positions and committees as well as strengthening those functions Involvement of top management at overseas subsidiaries in solving Group management issues with their expertise More focus by the Group CEO on Group management and promote initiatives for spreading Group culture Globalize and Strengthen Maximize the Group’s comprehensive capabilities Group CEO / CCO Group chief officers Chief Culture Officer Dept. in charge ? Focus on the Group management ? Initiatives for spreading our Group culture Domestic Non-life Domestic Life International Insurance Financial and General CFO Risk Financial Corporate Planning Risk Management Strategy and Synergy Strategy and Synergy Global Retention Strategy Financial Planning Human Resources Human Resources IT Planning IT Planning Committees Top management both in Japan and overseas discuss various Group management issues CRO CSSO CDO Digital Retention Strategy Investment Human Resources Strategy and Synergy ? Create synergies across the group and roll out best practice ? Converge knowledge of the Group to solve issues across the Group ? Involvement in the Group management by overseas talent ERM Committee International Executive Committee(IEC) Global Retention Strategy Committee(GRSC) Global Investment Strategy Committee(GISC) Global Information Technology Committee(GITC) CRSO CIO CHRO CWO CITO CISO Wellness Information Technology Information Security Copyright (c) 2019 Tokio Marine Holdings, Inc. 59 ESG (Sustainably Enhancing Corporate Value) ~Governance~ ? Strengthen global governance through promoting diversity and spreading core identity ■ Globalized and strengthened Group Chief Officer positions ? ■ Enhancement of committees Realize optimal decision-making while considering from multiple perspectives by utilizing experts in Tokio Marine Group International top management has taken the posts of Group Co-CRSO and Group Co-CIO since April 2016 Established Group CCO, CSSO, CDO, CISO, and CWO ? Copyright (c) 2019 Tokio Marine Holdings, Inc. Diversity Core identity ? Establish a strong governance CRSO and Co-CRSO lead underwriting/retention strategy CIO and Co-CIO lead asset management ■ Spreading “To Be a Good Company” ? ? Group CEO conducted townhall meetings with Group employees in Japan and overseas Further strengthen the Group governance by promoting the penetration of our Group culture through the meetings The culture & value survey (75% of approx. 40,000 employees answered) Passion toward the Group 4.1 points out of 5 (Being proud of working for Tokio Marine Group) Townhall meeting in Malaysia 60 Impact of FX Rate Change on the Group’s Financial Results ? Impact of 1 yen appreciation*1 (compared with the original projections) Impact on net income on financial accounting basis*2 ? Decrease in profit from overseas Impact on adjusted net income*2 ? Decrease in profit from overseas subsidiaries: approx. - \ 1.0bn subsidiaries: approx. - \1.7bn ? Decrease in profit from local subsidiaries ? Decrease in amortization of intangible fixed assets and goodwill (Of factors stated in the left column, amortization of intangible fixed assets and goodwill has no impact because it is added back to adjusted net income) ? Change in foreign currency denominated outstanding claims reserves and derivatives at TMNF: Total: approx. + \1.2bn ? Change in foreign currency denominated approx. + \1.2bn outstanding claims reserves and derivatives at TMNF: Total: approx. + \0.2bn approx. - \0.5bn *1 : Assuming that the FX rate for each currency changes by the same ratio as USD *2 : Impact on the FY2019 projections, after tax basis ? Reference: applied FX rate (USD/JPY) Mar. 31, 2019 Dec. 31, 2019 Mar. 31, 2020 JPY 110.99 Overseas subsidiaries FY2019 Projections Change from the original projections FY2019 Results TMNF Copyright (c) 2019 Tokio Marine Holdings, Inc. FY2019 Projections Change from the original projections FY2019 Results 61 MEMO Copyright (c) 2019 Tokio Marine Holdings, Inc. 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. URL : www.tokiomarinehd.com/en/inquiry/ TEL : +81-3-3285-0350 0:23:04.8 False 0:23:46.3 0:40:48.2 0:50:37.2 0:56:56.8 1:03:32.3 1:09:20.1 1:18:56.9 Tsuyoshi Nagano President and Group CEO