Date post: | 19-Jul-2015 |
Category: |
Business |
Upload: | audiologiks |
View: | 19 times |
Download: | 1 times |
Copyright (c) 2013 Tokio Marine Holdings, Inc.
Tokio Marine GroupFY2013 Business Plan Update
November 2013Tokio Marine Holdings, Inc.
Copyright (c) 2013 Tokio Marine Holdings, Inc. 1
Table of Contents
I. Tokio Marine Group Vision ・・・・・・・・・・ P. 2
II. Progress of the Mid-Term Business Plan ・・・・・・・・・・ P. 6
III. Business Plan and Strategy by Domain
1. Domestic Non-Life ・・・・・・・・・・ P. 13
2. Domestic Life ・・・・・・・・・・ P. 18
3. International Insurance ・・・・・・・・・・ P. 22
4. Asset Management ・・・・・・・・・・ P. 28
5. ERM & Return to Shareholders ・・・・・・・・・・ P. 30
Reference ・・・・・・・・・・ P. 33
◆Abbreviations used in this materialTMNF: Tokio Marine & Nichido Fire Insurance Co., Ltd.
NF : Nisshin Fire & Marine Insurance Co., Ltd.TMNL : Tokio Marine & Nichido Life Insurance Co., Ltd.
FL : Tokio Marine & Nichido Financial Life Insurance Co., Ltd.
Ⅰ
Ⅱ
Ⅲ
Copyright (c) 2013 Tokio Marine Holdings, Inc. 22
Ⅰ. Tokio Marine Group Vision
Copyright (c) 2013 Tokio Marine Holdings, Inc. 3
1. Good CompanyⅠ: Tokio Marine Group Vision
Aim to create sustainable corporate value bypursuing profit which is the outcome of customer trust
Look Beyond Profit We are a company that stands strong advancing towards
the future, as we strive to deliver value for the benefit ofour customers, shareholders, business partners, andsociety based on the principle of "profit will always follow after moral goodness"
Empower Our People Insurance business is a "People's Business" Our human resources and organizations filled with
talented, enthusiastic and self-motivated people are theroot of our competitiveness and the valuable assets thatenable us to achieve sustainable growth
Deliver on Commitments Our results are the barometer of stakeholders' trust We will pursue long-term superior results by focusing on full
commitment and building trust
Copyright (c) 2013 Tokio Marine Holdings, Inc. 4
2. Our Key Value Drivers (Sources of Value Creation)We can consistently enhance corporate value even in a changing environment
through improving the Group's value drivers
Solid franchise and strongbrand in homeland market
Balanced business portfolio ofdomestic and overseas,
life and non-life
Disciplinedunderwriting and ALM
Lineup of overseas subsidiaries with distinctive
strong growth
Sound capital base
Strong ERM
Ⅰ: Tokio Marine Group Vision
"Good Company"
Copyright (c) 2013 Tokio Marine Holdings, Inc. 5
Improving insurance demand due to economic recovery trend Impact of consumption tax hike Expectations of economic growth and new opportunities from "Growth strategy" of
Abenomics including TPP, deregulations, etc.
Market size continues to be predominant U.S. economy:Growth is continuing
EU: Avoided crisis for the moment
Japan
Overseas
Insu
ranc
eM
arke
t
Regulations Possible implementation of economic value based capital requirements (SVII, IFRS) Movements of global based insurance supervision and regulations (G-SIIs, IAIG, etc.)
Risks Trend of natural catastrophe risks Trend of risks due to demographic changes Increase in volatility in global financial markets
Mid-Term
Long-Term
Change in market structure due to demographic changes Impact from change in customer preferences and needs, as well as technological
innovation Possibility of reform of the social security system due to the aging society
Developed Countries
Emerging Countries
Although there is difference in growth rate, overall growth potential is high Issues such as economic vulnerability and restriction on foreign investment
3. Environment Surrounding the Group
Distinguish between risks and opportunities in the changing business environment and convert changes into our growth opportunities
Ⅰ: Tokio Marine Group Vision
Change in market structure due to demographic changes Impact from change in customer preferences and needs, as well as technological
innovation Possibility of reform of the social security system due to the aging society
Copyright (c) 2013 Tokio Marine Holdings, Inc. 6
Ⅱ. Progress of the Mid-Term Business Plan
6
Copyright (c) 2013 Tokio Marine Holdings, Inc. 7
1. Key Message
FY2013 Business Plan is progressing favorably to achieve the Mid-Term Business Plan Targets
Continuously aim to achieve the FY2014 Mid-Term targets by accurately responding to thechanges in business environment and implementing the strategies of each business domain
Although the full-year projection for adjusted earnings is revised downward due to the effect of change in EV risk discount rate (¥ - 44.4B)in accordance with the interest rate changes, excluding this temporary effect, expected growth exceeds the original projection
<Strategies of the Mid-Term Business Plan>
• Aim for improvement in combined ratio through continuous product and rate revisions, etc. to improve profitability• Aim for industry-leading growth by strengthening customer contacts
Domestic Non-Life
• Aim for well-balanced growth in both developed and emerging countries• Continuously aim for further improvement in capital efficiency through business portfolio diversification and
geographical diversification of risks underwritten
• Aim for maintained profit growth by developing unique and value-added products as well as promoting the integrationof life and non-life sales approach
FY2013 annual dividends per share is planned to be raised by 5 yen to 60 yen,an increase for two consecutive fiscal years
Ⅱ: Progress of the Mid-Term Business Plan
Domestic Life
International Insurance
Adjusted Earnings
FY2012Results
FY2013 Projections
209.1 226213
257*
Original(a)
Revised(b) (b) - (a) YoY
(billions of yen, expect for %)
Adjusted ROE 6.7% 6.6%
- 13
+31*
+3.9
+47.9*
6.0%
7.2%*
- 0.7pt
+0.5pt*
- 0.7pt
+0.5pt**Excluding effect of change inEV risk discount rate (¥ - 44.4B)
Copyright (c) 2013 Tokio Marine Holdings, Inc. 8
DomesticNon-Life
73.3108.2
FY20122Q
26.4 33.6
DomesticLife
16.40.6
InternationalInsurance
28.371.0
Group Total
2. Progress of FY2013 Business Plan (2Q Adjusted Earnings Results)
- 15.8
+42.7
+7.1
+34.8
Effect of risk discount rate change¥ - 41.6B
Effect of risk discount rate change¥ - 41.6B
Ⅱ: Progress of the Mid-Term Business Plan
FY20132Q
FY20122Q
FY20132Q
FY20122Q
FY20132Q
FY20122Q
FY20132Q
TMNF: Increased due to a decrease in natural catastrophe lossesand improvement in underwriting results in fire and auto, despite anincrease in provision for reserves for foreign currency denominatedoutstanding claims associated with the depreciation of the yen, etc.
NF: Increased mainly due to improvement in underwriting resultsand reduction of business expenses
TMNL: Although decreased mainly due to the effect of increase inrisk discount rate used for EV calculation in accordance with theinterest rate changes, would have been an increase excluding thiseffect
FL: Increased mainly due to improvement of the investmentenvironment
Increased significantly due to the depreciation of the yen, decreasein natural catastrophe losses, and profit contribution from Delphi'sconsolidation, as well as organic growth of each entity
Increased by ¥34.8B YoY due to growth in domesticnon-life and international insurance businesses,despite the effect of change in risk discount rate*used for EV calculation (¥ - 41.6B) in domestic lifebusiness
(billions of yen)
*Risk discount rate is based on the risk-free rate (20-year JGB interest rate) plus risk premium rate of 6% which is then rounded-off at 1% intervals. Due to the change of the risk-free rate to 1.59% as ofthe end of Sep. 2013, the risk discount rate was increased by 1%(risk-free rate as of the end of Mar. 2013: 1.42%)
Copyright (c) 2013 Tokio Marine Holdings, Inc. 99
¥ - 19.5B
¥ 230B - ¥ 260B¥ 209.1B ¥ 226B
90 - 100
60 -70
80 -90
69.290
63
48.370
- 18.7
(¥ 257B)*1
3. Progress of the Mid-Term Business Plan
¥ 213B
110.3(71.5)*1
115
35 (79)*1
59
(¥ 170.3B)*1
Ⅱ: Progress of the Mid-Term Business Plan
Domestic LifeEffect of risk discount rate change: +38.8
■ Adjusted Earnings & Target of Each Business Domain(billions of yen)
DomesticNon-Life *2
FY2011(Results)
FY2014(Target Level *3)
FY2012(Results)
FY2013(Projections)
Combined ratio95%
No.1 growthin the industry
97.4%
104.9%No.1 growth
in the industry
Combined ratio103.3%
NPW growth rate102.3%
EV increase(3 year total)
¥ 180B
¥ 110.3B(¥ 71.5B)*1
EV increase¥ 15.9B
Adjusted earnings¥ 100B
¥ 69.2BAdjusted earnings¥ -11.9B
DomesticLife
InternationalInsurance
Total
Mid-Term Business Plan "Innovation and Execution 2014"
Adjusted ROE7%~
6.7%Adjusted ROE
- 0.7%
97.2%
102.2%
94.8%
104.1%
¥ 63B
¥ 90B
6.6%
¥ 35B(¥ 79B) *1
¥ 115B
6.0%(7.2%) *1
Original Revised
*1 Excluding effect of change in risk discount rate used for calculation of the Embedded Value in domestic life insurance business*2 Figures of TMNF*3 Applied share price, FX rates, and interest rates are as of end-Mar. 2012. In addition, projected profit level is based on the
assumption that natural catastrophe losses are projected to occur on an average level, etc.
DomesticNon-Life 35%
DomesticLife 25%
InternationalInsurance 40%
Financial andGeneral
Domestic LifeEffect of risk discount rate change: - 44.4
Copyright (c) 2013 Tokio Marine Holdings, Inc. 10
4. FY2013 Adjusted Earnings Projections (Revised)
TMNF Adjusted Earnings
Adjusted Earnings by Business Domain(billions of yen)
Original(a)
Revised(b)
Difference(b) - (a)
Domestic Non-Life 48.3 70.0 59.0 -11.0
TMNF 54.6 72.0 60.0 -12.0
NF -0.9 1.0 3.0 2.0
Other -5.4 -3.0 -4.0 -1.0
Domestic Life*1 110.3 63.0 35.0 -28.0
TMNL 89.7 67.0 30.0 -37.0
FL 20.6 -4.0 6.0 10.0
Other -0.1 0.0 -1.0 -1.0
International Insurance 69.2 90.0 115.0 25.0
PHLY 24.5 28.0 30.0 2.0
Delphi 11.9 23.0 29.0 6.0
North America 7.3 3.0 4.0 1.0
Kiln 5.6 17.0 20.0 3.0
Europe & Middle East 2.2 1.0 0.0 -1.0
South & Central America 2.0 2.0 2.0 0.0
Asia 2.2 6.0 17.0 11.0
Reinsurance 10.2 12.0 13.0 1.0
International Non-Life*2 66.0 92.0 115.0 23.0
International Life 4.7 2.0 1.0 -1.0
Financial & General -18.7 3.0 4.0 1.0
Group Total 209.1 226.0 213.0 -13.0
Adjusted ROE (Group total) 6.7% 6.6% 6.0% -0.7% *1: Excluding capital transactions*2: International Non-Life figures include some life insurance premiums of composite overseas subsidiaries
FY2013 ProjectionsFY2012ResultsBusiness Domain
Group total adjusted earnings revised downward by ¥13B from the originalprojections to ¥213B. Projected Adjusted ROE is 6.0%
Excluding the effect of risk discount rate change used for calculation ofEV (¥ - 44.4B), group total adjusted earnings would increase by ¥31B fromthe original projections to ¥257B
Domestic Non-LifeTMNF:Downward revision by ¥12B to ¥ 60B from the original projections Increase in provision for reserves for foreign currency denominated
outstanding claims due to further depreciation of the yen Impact of consumption tax hike, etc.
Domestic LifeTMNL:Downward revision by ¥37B to ¥30B from the original projections Increase in EV due to a steady increase in new policies Decrease in EV due to changes in risk discount rate, etc.
FL:Upward revision by ¥10B to ¥6B from the original projections Increase in EV due to the improvement of the investment
environment, etc.
International InsuranceUpward revision by ¥25B to ¥115B from the original projections Profit increase due to further depreciation of the yen Decrease in outstanding claims reserves in Asia relating to
Thai Flood occurred in FY2011
Net income ofTMNF for
accountingpurposes
+
Provision ofcatastrophe lossreserves, etc. net
of taxes
+
Provision forprice fluctuationreserves, net of
taxes
-
Gains/losses onsales or evaluationof ALM bonds andinterest rate swaps,
net of taxes
-
Gains/loses onsales or
evaluation ofstocks and
properties held,net of taxes
-Other extraordinaryprofits/losses andvaluation reservesetc., net of taxes
=Adjusted
earnings ofTMNF
¥ 130.0B ¥ 8.5B ¥ 2.5B ¥ 10.9B ¥ 47.3B ¥ 22.8B ¥ 60.0B
Ⅱ: Progress of the Mid-Term Business Plan
Copyright (c) 2013 Tokio Marine Holdings, Inc. 11
5. Impact of Consumption Tax Hike (Estimate)
Although the impact of the consumption tax hike will start to fully appear in FY2014, there isno change in our targets.By implementing timely and appropriate measures on the premise of cost control through management efforts, we aim to achieve the Mid-Term Business Plan targets
Impact onadjusted earnings*2
2
FY2014
2014
April 8%5%
FY2013
Approx. ¥ - 4B Approx. ¥ - 21B
Increase in incurred losses
Increase in business expenses
Increase in business expenses -
ofTMNF
ofTMNL
Approx. ¥ - 4B Approx. ¥ - 22B
Approx. ¥ - 19B(+1.8 pt)*1
Approx. ¥ - 4B
Increase in provision for outstanding claims reserves
Approx. ¥ - 1B
Impact onconsolidated net income
1
Ⅱ: Progress of the Mid-Term Business Plan
*1 Impact on W/P combined ratio(Private insurance basis)
*2 Major impact on domestic life insurance was factored in EV at the end of FY2012. Figures in the above table represent expected impact on domestic non-life
Copyright (c) 2013 Tokio Marine Holdings, Inc. 12
Ⅲ. Business Plan and Strategy by Domain
12
Copyright (c) 2013 Tokio Marine Holdings, Inc. 13
1. Domestic Non-Life2. Domestic Life3. International Insurance4. Asset Management5. ERM & Return to Shareholders
Ⅲ. Business Plan and Strategy by Domain
13
Copyright (c) 2013 Tokio Marine Holdings, Inc. 14
1-1. TMNF FY2013 Projections
Net Premiums Written (billions of yen)
Adjusted Earnings (billions of yen)
Ⅲ: Business Plan and Strategy by Domain
FY2012Results
FY2013Projections(Original)
FY2013Projections(Revised)
1,9111,869.6
1,947
+36
607254.6
-12
FY2012Results
FY2013Projections(Original)
FY2013Projections(Revised)
Net premiums written is revised upward by +1.9% from the original projections, reflectingeconomic recovery and first-half results
Adjusted earnings is revised downward, due to the depreciation of the yen and expected impact ofconsumption tax hike. Excluding these two factors, remains at almost the same level as theoriginal projections
Adjusted EarningsDownward revision by ¥12B from the original projections mainlydue to the following. Excluding these factors, adjusted earningswould have been projected at the similar level as the originalprojections
Net Premiums WrittenUpward revision by ¥36B (+1.9%) from the original projections mainly due to:
Upward revision mainly in auto and fire, factoring in the increasein new vehicle sales and housing starts as well as the first-halfresults
Depreciation of the yen(*): Increase in provision for reserves for foreign currency
denominated outstanding claims Losses on FX forwards and currency swaps etc.
(*)FX rate(USD/JPY)
FY2013: Mar. 31, 2013: 94.05 yen→ Sep. 30, 2013: 97.75 yen (3.7 yen depreciation)
Consumption tax hike: Increase in provision for outstandingclaims reserves
Copyright (c) 2013 Tokio Marine Holdings, Inc. 15
Major factors of change in FY2013 combined ratio (Difference from the original projections)
15(*):Net E/I C/R = E/I loss ratio + W/P expense ratio
1-2. TMNF Combined Ratio Combined ratio is expected to improve in line with the Mid-Term Business Plan Regarding the impact of consumption tax hike, we continue to aim at achieving the Mid-Term
Business Plan targets with additional measures taken into consideration
1. W/P loss ratio: Downward revision by 2.0 points Carry-over of a part of claims payment relating to
natural catastrophes occurred in previous fiscal years, to FY2014
Reflecting the impact from the decrease in claims frequency in auto
2. E/I loss ratio: Upward revision by 1.0 point Increase in provision for reserves for foreign currency
denominated outstanding claims due to thedepreciation of the yen
Increase in provision for outstanding claims reservesdue to consumption tax hike
3. Expense ratio: Downward revision by 0.4 pointsMainly due to an increase in net premiums written
(billions of yen, except for %) FY2011 FY2012FY2013 Projections
(Original) (Revised)
Net premiums written 1,545.6 1,618.5 1,649.6 1,679.4Net claims paid(including loss adjustment expenses)
1,071.5 1,045.1 1,060.3 1,045.8
Natural catastrophe losses 153.6 70.0 75.6 60.5
W/P loss ratio 69.3% 64.6% 64.3% 62.3%Natural catastrophe losses 9.9% 4.3% 4.6% 3.6%
Expense ratio 34.0% 32.8% 32.9% 32.5%
W/P C/R 103.3% 97.4% 97.2% 94.8%E/I loss ratio 69.8% 66.8% 62.8% 63.8%
Net E/I C/R(*) 103.8% 99.6% 95.7% 96.3%
E/I basis
W/P basis
97.4%
103.3% 99.6%
103.8%
FY2011Results
94.8%( - 2.4pt)※
96.3%( + 0.6pt)※
95%
Ⅲ: Business Plan and Strategy by Domain
Combined Ratio (Private insurance basis)
FY2012Results
FY2013Projections(Revised)
FY2014Target
※Figures in parentheses are the difference from the original projections
Copyright (c) 2013 Tokio Marine Holdings, Inc. 16
1-3. TMNF Profitability Improvement in Auto
■ Loss Ratio
16
(billions of yen, except for %) FY2011 FY2012FY2013 Projections
(Original) (Revised)
Net premiums written 865.6 908.1 929.4 943.0
W/P loss ratio 70.4% 67.8% 66.5% 65.5%
W/P C/R 102.6% 98.5% approx. 97% 96.0%
E/I loss ratio 70.7% 69.4% 67.8% 67.1%
Net E/I C/R(*) 102.9% 100.2% approx. 99% 97.6%
1. W/P loss ratio: Downward revision by 0.9 points Reflecting the impact from the decrease in claims
frequency Increase in unit repair cost for vehicle damage and
property damage liability coverage
2. E/I loss ratio: Downward revision by 0.7 points In addition to the above, increase in provision for
outstanding claims reserves due to consumption tax hike
Positive effects of past measures for profitability improvements are steadily appearing We will implement timely and appropriate measures for consumption tax hike and increase in unit
repair cost
Ⅲ: Business Plan and Strategy by Domain
※Figures in parentheses are the difference from the original projections
W/P loss ratio
E/I loss ratio
67.8%
70.4%
69.4%
70.7%
65.5%( - 0.9pt)※
67.1%( - 0.7pt)※
FY2011Results
FY2012Results
FY2013Projections(Revised)
(*):Net E/I C/R = E/I loss ratio + W/P expense ratio
Major factors of change in FY2013 loss ratio (Difference from the original projections)
Rate revisions and profitability improvements per FY(excluding revision of the Grade Rating System in non-fleet auto insurance)
Revision FY09 FY10 FY11 FY12 FY13Projections
FY14Projections
FY15Projections
Jul. 2009 6.0 13.0 1.0
Jul. 2010 6.0 13.0 1.0
Jan. 2012 3.0 18.0 7.0
Oct. 2012 1.0 8.0 1.0
Oct. 2013 4.0 26.0 4.0
Total 6.0 19.0 17.0 20.0 19.0 27.0 4.0
(billions of yen)
— Product and rate revisions already implemented such as the introduction of age-bracket rate plans
— Mitigation effect of structural future decrease in per policy premiums by the revision of the Grade Rating System
(Ref.) Expected effects onwards from past measures
Copyright (c) 2013 Tokio Marine Holdings, Inc. 17
1-4. TMNF Growth Strategy (Achieving No.1 Growth in the Industry)
17
Achieve sustainable growth with profitability bystrengthening customer contacts and offering quality that customers select
Net Premiums Written(billions of yen)
Cultivate new market through alliancewith Meiji Yasuda Life Insurance Companyand expansion of superior agents, etc.
Increase per policy premiumsthrough conducting product andrate revisions and proposing widercoverage to the customers
Improve renewal ratio through sales promotion of Super Insurance and customer oriented sales approach utilizing tablet PCs
Auto Insurance Renewal Ratio
Enha
nce
qual
ity a
nd q
uant
ity
of s
ales
cha
nnel
s Alliance with Meiji Yasuda Life Insurance Company(Premium increase)
‒ FY12 results: ¥12.7B‒ FY13 projections: ¥4.0B
Expansion of new agents
‒ FY13 plan: 1,800 agents
Super Insurance‒ Tremendous improvement in ease of sales
through product and system renewals in Oct. 2010
‒ Renewal ratio as of the end Sep. 2013 :97.3%
Achieve sustained growththrough top line growth and improved profitability
+
+
FY2010 1H FY2013
94.5% 95.6%
Auto
Private insurance total
13年度予想(修正)
AutoPrivate
insurance total
100.0%
101.0%
102.0%
103.0%
104.0%
FY2011 FY2012 1H FY2013
101.2 103.1 103.3
Ⅲ: Business Plan and Strategy by Domain
105%
Auto insurance in-force polices growth rate*
FY10
100
105
FY11 FY12 FY13end-Sep.
Auto Insurance Per Policy Premiums (FY2010 = 100)*
Prov
ide
com
petit
ive
prod
ucts
and
ser
vice
s
700
800
900
1,000
FY10 FY11 FY12 FY13(Projections)
1,300
1,400
1,500
1,600
1,700
Left figures are for non-fleet contracts
*FY2010 financial results (on a managerial accounting basis)is set at index value of 100
Copyright (c) 2013 Tokio Marine Holdings, Inc. 18
Ⅲ. Business Plan and Strategy by Domain
1. Domestic Non-Life2. Domestic Life3. International Insurance4. Asset Management5. ERM & Return to Shareholders
18
Copyright (c) 2013 Tokio Marine Holdings, Inc. 19
Annualized Premiums (ANP) (billions of yen)
New policy In-force policy
FY2012Results
Fiscal Year-end EV (billions of yen)
2-1. TMNL FY2013 Projections (Revised)
FY2013Projections(Original)
*1: Excluding capital transactions*2: Excluding capital transactions and effects of changes in interest rates,
risk discount rate, and underlying assumptions
ANP:– Projected to continue favorable sales of the third-sector line
and individual annuities as in the previous fiscal year– Upward revision in both new and in-force policies from the
original projections
Increase in EV:– Downward revision by ¥37.0B from the original projections
due to the change in risk discount rate– However, EV increase excluding the said impact*2 is revised
upward
FY2013Projections(Revised)
FY2012Results
FY2013Projections(Original)
FY2013Projections(Revised)
Effect of risk discount rate change
Ⅲ: Business Plan and Strategy by Domain
+9.0
80.6 81.0 91.3
470.4518.4 527.5
+10.3
57.3
419.4
FY2011Results
(a) (b) (b) - (a)Fiscal year-end EV 516.3 601.1 656.8 619.2 - 37.0
EV increase*1 76.4 89.7 67.0 30.0 - 37.0
EV increase*2 48.8 61.5 65.0 67.0 + 2.0
601.1
656.8
619.267.030.0
- 44.7
516.3
FY2011Results
Copyright (c) 2013 Tokio Marine Holdings, Inc. 20
Maintain growth with profitability through product development reflecting the growing needs of life insurance that protect one's living
Achieving Steady Growth (ANP of personal insurance new policy )
(billions of yen)
Steady growth mainly through launching new products for living benefits despite the severe competition in the industry
Third sector line**: Medical, accelerated benefit, etc.
First sector line
2-2. TMNL Product Strategy
Conventional life insurance
Death
Outpatient treatment
(after discharge)
Nursing care requirement(permanentdisability)
Medical insurance
Hospitalization and
surgical treatment
Cultivate potential
market(Life insurance
to protect one's living)
Lineup of "Premium Series*"
"Medical Kit R"Released Jan.
2013
Medical + Refund
"Long-life Support Whole Life"
Released Nov. 2010
Whole life +Nursing care
"Medical Kit" with inability-to-work support
Released Aug. 2011
Medical +Inability to work
"Household Income Term"with inability-to-work benefit
Released Oct. 2012
Household income+Inability to work
Refund the difference betweentotal premiums paid until age 70and the total benefit received
No change in premiums for samecoverage even after age 70
Inabilityto work
(home care)
(billions of yen)
Maintain & Improve Profitability (Value of new policies)
10.8
FY122Q
FY132Q
FY112Q
23.4
6.6
20.0
6.3
13.6
FY09
22.2
15.6
7.44.8
FY12FY11FY10
Ⅲ: Business Plan and Strategy by Domain
CumulativeSales (Jan-Sep)
of approx.
160thousandpolicies
*Series of unique products with high added value
Copyright (c) 2013 Tokio Marine Holdings, Inc. 21
Utilization of Multiple Sales Channels Centering on Non-Life Agents
Each Sales Channel Contributes to Growth (Channel weight*1)
Auto
P.A.
Medical
Death
Fire
Nursing Care
Non-Life Policy Holder(Individual & Corporate)
Non-Life Customer Development through Integration of Life and Non-Life Sales
*2: Life Partner is TMNL's life insurance sales staff
BancassuranceApprox. 5%
Life Partner*2
Approx. 10%
Life ProfessionalsApprox. 25%
Non-Life Agents
Approx. 60%
2-3. TMNL Channel Strategy
ChannelYoY
Change*1
(Approx.)
Non-Life Agents • Non-life customer development by furtherpromoting integration of life and non-life sales +20%
Life Partner*2 • Non-life customer development through saleswith consultation expertise +10%
Life Professionals
• Market development centering on sales ofunique products +20%
Bancassurance• Cultivate banks' customer base through sales
of highly unique products centering oninstallment plans
+100%
*1: On a managerial accounting basis as of the end of 2Q FY2013
Super Insurance
Tokio Marine & Nichido Fire
Tokio Marine & Nichido Life
Ⅲ: Business Plan and Strategy by Domain
Non-LifeInsurance
Agents
Copyright (c) 2013 Tokio Marine Holdings, Inc. 22
Ⅲ. Business Plan and Strategy by Domain
1. Domestic Non-Life2. Domestic Life3. International Insurance4. Asset Management5. ERM & Return to Shareholders
22
Copyright (c) 2013 Tokio Marine Holdings, Inc. 23
Achieve sustainable growth and profit expansion as thegrowth drivers of Tokio Marine Group
3-1. International Insurance Business (Overview)
Promoting balanced growth in developed and emerging countries Developed countries: Aim for sustainable profit expansion in Europe and North America, the main global insurance markets,
especially in commercial lines and reinsurance business Emerging countries: Aim for medium to long-term profit growth in both life and non-life as emerging insurance markets expand
Driving steady growth with both organic growth and M&A Organic growth: Aim for sustainable and profitable growth while maintaining underwriting discipline M&A: Smoothly integrate Delphi's business and consider further opportunities for M&A
Diversifying business risks and improving capital efficiency Aim for business diversification among life, non-life, and reinsurance and geographical diversification of underwriting risk Develop a well-balanced portfolio in order to improve capital efficiency
Enhance ERM and implement a global HR strategy Improve controls for natural catastrophe and non-modelled risks Develop a talent pool of global leaders and recruit and train professional human resources
International Insurance Business Strategy in the Mid-Term Business Plan
Growth strategies are progressing on trackWe will continue to implement each strategy
Ⅲ: Business Plan and Strategy by Domain
Copyright (c) 2013 Tokio Marine Holdings, Inc. 24
Net Premiums Written and Adjusted Earnings— International Insurance Business Total
Net Premiums Written Upward revision from the original projections by ¥72B to ¥992B
due to the depreciation of the yen (¥31.5B) and revenuegrowth in Philadelphia, Brazil, and life insurance business
Adjusted Earnings Upward revision from the original projections by ¥25B to ¥115B
mainly due to:i. Depreciation of the yen (¥5.4B)ii. Profit increase in Asia associated with changes in
reserves related to Thai floodiii. Profit contribution from Delphiiv. Progress of growth strategies in each business
Business and Geographical Portfolio Breakdown(FY2013 projections / adjusted earnings basis)
Promote business diversification among life, non-life andreinsurance, and geographical diversification of risksunderwritten
3-2. International Insurance Business FY2013 Projections
Net premiums written
Adjustedearnings
Non-life primary Reinsurance Life
(billions of yen)
992
69.2
90734.3
920115
51.3
604.7781 827
78.3
839867
56
FY2012Results
55.8
10280
13
10.2
124.7
1
2
FY2013Projections(Original)
FY2013Projections(Revised)
South & CentralAmerica
2%
North America3%
Asia15%
Reinsurance11%
Kiln17%
Delphi25%
Philadelphia27%
Ⅲ: Business Plan and Strategy by Domain
FY2012Results
FY2013Projections(Original)
FY2013Projections(Revised)
Copyright (c) 2013 Tokio Marine Holdings, Inc. 25
3-3. International Insurance Business FY2013 Projections
25
Ⅲ: Business Plan and Strategy by Domain
(billions of yen, except for %)
Original (a) Revised (b) Original (a) Revised (b)As of end-Dec. 2012
As of end-Mar. 2013
As of end-Sep. 2013
As of end-Dec. 2012
As of end-Mar. 2013
As of end-Sep. 2013
JPY 86.5 JPY 94.0 JPY 97.8 JPY 86.5 JPY 94.0 JPY 97.8
193.6 226.0 241.0 15.0 47.4 24% 24.5 28.0 30.0 2.0 5.5 22%
Delphi*1 75.2 171.0 180.0 9.0 104.8 139% 11.9 23.0 29.0 6.0 17.1 144%
North America 48.7 56.0 60.0 4.0 11.3 23% 7.3 3.0 4.0 1.0 -3.3 -45%
Kiln 106.8 118.0 123.0 5.0 16.2 15% 5.6 17.0 20.0 3.0 14.4 257%
20.5 22.0 25.0 3.0 4.5 22% 2.2 1.0 0.0 -1.0 -2.2 -
79.7 96.0 105.0 9.0 25.3 32% 2.0 2.0 2.0 0.0 0.0 0%
Asia 79.9 95.0 93.0 -2.0 13.1 16% 2.2 6.0 17.0 11.0 14.8 673%
Reinsurance 78.3 83.0 98.0 15.0 19.7 25% 10.2 12.0 13.0 1.0 2.8 27%
683.0 864.0 925.0 61.0 242.0 35% 66.0 92.0 116.0 24.0 50.0 76%
51.3 56.0 67.0 11.0 15.7 31% 4.7 2.0 1.0 -1.0 -3.7 -79%
734.3 920.0 992.0 72.0 257.7 35% 69.2 90.0 115.0 25.0 45.8 66%
Philadelphia
FY2013 Projections FY2013 Projections
YoY
Change %
YoY
Change %Applied FX rate(USD/JPY)
Difference(b) - (a)
Adjusted Earnings
FY2012Results
Net Premiums Written
Difference(b) - (a)
FY2012Results
*1 Delphi "FY2012 Results" shows the results for six months from July to December 2012 and "FY2013 Projections" shows the full year projection from January to December 2013*2 Total Non-Life figures include some life insurance premiums of composite subsidiaries
Europe &Middle East
South &Central America
Total(After adjustment)
Life
Total Non-Life*2
Copyright (c) 2013 Tokio Marine Holdings, Inc. 26
3-4. Sustainable Profit Expansion in Developed Countries
Maintain strict underwriting discipline and stable profit growth Further increase profits by leveraging strong investment
expertise Generate group synergy by promoting cooperation between
various business companies within the group
Maintain underwriting discipline in the softening market
Stable profits by controlling natural catastrophe risks andportfolio diversification
The re-domestication of head office to Switzerland andexpansion of global strategy in Europe, U.S. and Oceania
Major Entities Adjusted Earnings & C/R(billions of yen, except for %)
Growth Strategy
– High financial rating– Sustainable and stable capacity
Increase profitability and stability of profits by DynamicPortfolio Optimization (DPO*1), continued rate increase andretention of renewal book
Acquire new businesses by marketing new products
*1 DPO: Strategy to optimize portfolio by identifying contracts with significantnatural catastrophe risks and actively replace to improve terms andconditions
Maintain strict underwriting discipline and strong profits Construct well-balanced portfolio through various growth
options Expand growth strategy in Europe and Asia
– High financial rating– Strong expertise in underwriting &
product development
– High financial rating– Strong expertise in the field of
employee benefits– Strong expertise in asset
management
– High financial rating– Excellent marketing capability
88.4% approx.87%
approx.88%
92.1%approx.
79%approx.
80%
96.6%approx.
95%
approx.97%
92.8% approx.91%
approx.91%
24.5 28 30
11.9
23 29
5.6
1720
10.212 13
FY2012Results
Reinsurance
Ⅲ: Business Plan and Strategy by Domain
FY2013Projections(Original)
FY2013Projections(Revised)
FY2012Results
FY2013Projections(Original)
FY2013Projections(Revised*2)
FY2012Results
FY2013Projections(Original)
FY2013Projections(Revised*3)
FY2012Results
*2 Delphi's P/L was consolidated from FY12 2H (July-Dec.). Increase in FY13is due to full-year profit contribution as well as revenue growth andan increase in investment income, etc.
FY2013Projections(Original)
FY2013Projections(Revised)
*3 Increase in FY13 is mainly due to the reversal effect of natural catastrophelosses in FY12 and foreign exchange gains
Copyright (c) 2013 Tokio Marine Holdings, Inc. 27
– Develop distribution channels and newproducts anticipating market growth in themedium-to-long term
Continue to expand business by developing distribution channels
3-5. Growth in Emerging Markets Key Strategies and Net Premiums Written in Emerging Countries (billions of yen)
– Aim to achieve stable profits through revenuegrowth in auto insurance business
India India
– Maintain high profitability in marine businessand personal auto insurance business
Singapore / Malaysia
Thailand– Aim to increase profits by expanding
underwriting in both Japanese and localbusinesses
– Achieve full operational status quickly andstrengthen distribution after entering the fast-growing Indonesian life insurance market
IndonesiaChina– Maintain profitability in Japanese business
and expand market share of local businessin the medium-to-long term
Singapore / Malaysia– Pillar of Asia life business. Aim to increase
profit growth exceeding the market averageby expanding distribution channels anddeveloping new products
– Maintain high profitability in personal autobusiness utilizing the solid business platform
Brazil
Saudi Arabia / Egypt– Promote Islamic insurance products
through the distribution network of AlinmaBank in Saudi Arabia
– Transformed Takaful companies (life andnon-life) in Egypt into subsidiaries anticipatingan increase in demand for Takaful products
Middle-East Islamic Insurance
South & Central America Non-LifeAsia LifeAsia Non-Life
Accelerate profit growth in both Japanese and local businesses
Expand steadily in personal auto business
Develop Islamic insurance business
56.5
79.993
32.9
51.3
67
60.4
79.7
105
Thailand– Accelerate development of the main agency
channel and increase profitability
Ⅲ: Business Plan and Strategy by Domain
FY2011Results
FY2013Projections(Revised)
FY2012Results
FY2011Results
FY2013Projections(Revised)
FY2012Results
FY2011Results
FY2013Projections(Revised)
FY2012Results
Copyright (c) 2013 Tokio Marine Holdings, Inc. 28
Ⅲ. Business Plan and Strategy by Domain
1. Domestic Non-Life2. Domestic Life3. International Insurance4. Asset Management5. ERM & Return to Shareholders
28
Copyright (c) 2013 Tokio Marine Holdings, Inc. 29
Aim to enhance profitability within the range of risk tolerance while taking the characteristics of insuranceliabilities into consideration and continuously ensuring liquidity and risk controls through ALM
The impact of monetary easing and other factors has engendered change in the asset management environment. We will respond to such changes in a flexible manner, although we do not intend to change our Group’s concept for asset management
With asset and liability management (ALM) at the core,
we aim to secure sufficient liquidity and profit
■ Domestic bonds : ¥7.3T
■ Other securities : ¥2.1T・・・Mainly assets in separate accounts
held by Domestic Life (FL)
■ Foreign securities : ¥2.7T
■ Domestic equities : ¥2.4T
■ Monetary receivables bought : ¥0.8T・・・Mainly absolute return investment & lending by
Domestic Non-Life (TMNF) and overseas subsidiaries (Delphi etc.)
■ Cash and deposits: ¥0.4T■ Others : ¥2.4T
■ Loans: ¥0.3T
Domestic government bonds (JGB): Approx. ¥6.4T ・・・Mainly bonds for the purpose of
ALM by Domestic Life and Non-Life ・・・Mainly business-related equities held by Domestic Non-Life (TMNF)
39.0%
14.4%
11.5%
4.4%・・・Mainly local country bonds held by
overseas subsidiaries
4. Asset Management
Total assets¥18.8T
Group Asset Management Concept
Asset Composition of Tokio Marine Holdings (Consolidated) (as of the end of 2Q FY2013)
・・・Mainly tangible fixed assets and intangible fixed assets, etc.
Ⅲ: Business Plan and Strategy by Domain
39.0%11.5%
13.1%2.4%
13.1%
4.4%
2.0%
Copyright (c) 2013 Tokio Marine Holdings, Inc. 30
Ⅲ. Business Plan and Strategy by Domain
1. Domestic Non-Life2. Domestic Life3. International Insurance4. Asset Management5. ERM & Return to Shareholders
30
Copyright (c) 2013 Tokio Marine Holdings, Inc. 31
Factors Causing Change in Net Asset Value Rise in market share prices Contribution of 2Q FY13
adjusted earnings, etc
Mar. 31, 2013
12,397 yen Nikkei Stock Average 14,455 yen
Sep. 30, 2013
Factors Causing Change inRisk Capital Rise in market share
prices, etc.
As of Sep. 30, 2013
Nikkei Stock Average: +30%
- 30%
<Impact of market changes on ESR>
118%137%
128%
Economic Solvency Ratio (ESR)
■ Net Asset Value: Consolidated net asset value + Various reserves (after-tax basis) + Value of lifeinsurance policies in-force -Goodwill and other items
■ Risk Capital: 99.95% VaR, after taking account of diversification effects■ ESR: Net asset value/Risk capital
— Interest rates: Limit impact from interest rate changes through strict ALM
— FX rates: Limited positive impact, as depreciation of the yen increases net asset value of overseas subsidiaries, but also increases FX risks
— Share price: Significant impact on ESR due to the market value fluctuation of business related equities
5-1. Enterprise Risk Management (ERM)
Maintain financial soundness
Balance risk and capital to maintainAA credit ratings
• Improve natural catastrophe risk management• Ensure our financial base can withstand catastrophic risks
Improve profitability
Sustainable profit growth and improve capital efficiency
• Invest in new businesses to improve capital efficiency• Improve the profitability of existing businesses• Continue sales of business-related equities
Control risk and capital in accordance with risk appetite** Insurance risk control : Pursue sustainable growth, risk diversification (stabilization), and improvement of
capital efficiency through global business expansionInvestment risk control : Secure liquid assets and stable profits mainly through ALM
¥3.7T ¥4.1T¥3.0T ¥3.2T
128%124%
Ⅲ: Business Plan and Strategy by Domain
Copyright (c) 2013 Tokio Marine Holdings, Inc. 32
The primary means of shareholder returns is dividends, which we plan to increase in line with profit growth
The target payout ratio level is 40% to 50% of average adjusted earnings (excluding EV)
Interim dividend of ¥30.0 per share (¥23.0B in total), in line with the original plan
Annual dividend is planned to be raised by ¥5 to ¥60 (¥46.0B in total), an increase for two consecutive fiscal years
Consistent with the past policy, 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
Attractive dividends Flexible share repurchases
Expected trend for dividends per share
5-2. Return to Shareholders
*1: Proportion to average adjusted earnings (excluding EV)*2: Average adjusted earnings (excluding EV) excludes effects from the Great East Japan Earthquake and Thai Flood
■: Dividends per share (yen)●: Payout ratio*1
(billions of yen)
Adjusted earnings 169.7 143.2 -52.5 165.4 72.0 -19.5 209.1 213.0
Adjusted earnings (excluding EV) 121.5 128.1 4.7 113.4 44.5 -35.4 98.8 178.0
Average adjusted earnings (excluding EV)*2 90.0 100.0 80.0 85.0 80.0 80.0 85.0 110.0
Dividends Total 29.8 38.7 38.0 39.4 38.6 38.3 42.2 46.0
Ⅲ: Business Plan and Strategy by Domain
2006 2007 2008 2009 2010 2011 2012 2013(Projections)
2014
(Projections)
36
48 48 50
60
48% 46% 48% 48% 50%39%
33%
50 50
55
Copyright (c) 2013 Tokio Marine Holdings, Inc. 33
Reference
33
Copyright (c) 2013 Tokio Marine Holdings, Inc. 34
Tokio Marine Holdings Key Statistics - 1Reference
FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013Projections
Ordinary income *1 2,929.0 bn yen 2,775.7 bn yen 2,899.4 bn yen 3,399.9 bn yen 4,218.5 bn yen 3,710.0 bn yen 3,503.1 bn yen 3,570.8 bn yen 3,288.6 bn yen 3,415.9 bn yen 3,857.7 bn yen -
Net income 56.6 bn yen 111.4 bn yen 67.6 bn yen 89.9 bn yen 93.0 bn yen 108.7 bn yen 23.1 bn yen 128.4 bn yen 71.9 bn yen 6.0 bn yen 129.5 bn yen 185.0 bn yen
Adjusted earnings *2 105.0 bn yen 172.1 bn yen 51.8 bn yen 138.7 bn yen 169.7 bn yen 143.2 bn yen -52.5 bn yen 165.4 bn yen 72.0 bn yen -19.5 bn yen 209.1 bn yen 213.0 bn yen
Adjusted ROE *2 3.8% 5.9% 1.6% 3.7% 3.8% 3.5% -1.7% 5.8% 2.4% -0.7% 6.7% 6.0%
Dividends total *3 18.5 bn yen 19.7 bn yen 18.9 bn yen 25.2 bn yen 29.8 bn yen 38.7 bn yen 38.0 bn yen 39.4 bn yen 38.6 bn yen 38.3 bn yen 42.2 bn yen 46.0 bn yen
Dividends per share *4 20 yen 22 yen 22 yen 30 yen 36 yen 48 yen 48 yen 50 yen 50 yen 50 yen 55 yen 60 yen
Share repurchase *5 - 100.0 bn yen 92.4 bn yen 70.1 bn yen 85.0 bn yen 90.0 bn yen 50.0 bn yen - 50.0 bn yen - - TBD
260.0 bn yen 130.0 bn yen 170.0 bn yen 120.0 bn yen 45.0 bn yen 60.0 bn yen 50.0 bn yen 95.0 bn yen 187.0 bn yen 206.0 bn yen 115.0 bn yen approx.100.0 bn yen
Share price *6 1,472 yen 3,240 yen 3,120 yen 4,660 yen 4,360 yen 3,680 yen 2,395 yen 2,633 yen 2,224 yen 2,271 yen 2,650 yen 3,290 yen
Market capitalization *6 1,363.0 bn yen 2,896.6 bn yen 2,683.2 bn yen 3,930.8 bn yen 3,594.9 bn yen 2,960.6 bn yen 1,926.8 bn yen 2,118.3 bn yen 1,789.3 bn yen 1,827.1 bn yen 2,039.2 bn yen 2,531.7 bn yen
*1 Ordinary income projections are undisclosed*2 FY2005: excludes the effects of assumption changes in calculating EV of domestic life, etc.*3 FY2013: projected figure assumes the number of stocks unchanged from that of March 31, 2013*4 All figures are shown on a basis after a share-split 1-500 in Sep. 2006*5 On a repurchase year basis. FY2006 figure excludes \57.8B of stock exchange between Nisshin Fire*6 FY2013 figures are as of November 12, 2013. Share prices are shown as a basis after a share-split 1-500 in Sep. 2006
Sales of business relatedequity holdings
Copyright (c) 2013 Tokio Marine Holdings, Inc. 35
BPS and PBR of Tokio Marine Holdings
Tokio Marine Holdings Key Statistics - 2 Adjusted Earnings / Adjusted Earnings (excluding EV) and Return to Shareholders
Reference
(billions of yen, unless otherwise stated below)
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013(Projections)
138.7 169.7 143.2 -52.5 165.4 72.0 -19.5 209.1 213.0
104.1 121.5 128.1 4.7 113.4 44.5 -35.4 98.8 178.0
90.0 90.0 100.0 80.0 85.0 80.0 80.0 85.0 110.0
95.3 114.8 128.7 88.0 39.4 88.6 38.3 42.2 TBD
Dividends total 25.2 29.8 38.7 38.0 39.4 38.6 38.3 42.2 46.0
Dividends per share 30 yen 36 yen 48 yen 48 yen 50 yen 50 yen 50 yen 55 yen 60 yen
Payout ratio to average adjusted earnings (excluding EV) 28% 33% 39% 48% 46% 48% 48% 50% 42%
Share repurchases*2 70.1 85.0 90.0 50.0 - 50.0 - - TBD
Total distributions to shareholders
*1: Average adjusted earnings (excluding EV) excludes effects from the Great East Japan Earthquake and Thai Flood*2: On a repurchase year basis. FY2006 figure excludes \57.8B of stock exchange between Nisshin Fire
Adjusted earnings
Adjusted earnings (excluding EV)
Average adjusted earnings (excluding EV)*1
2006/3E 2007/3E 2008/3E 2009/3E 2010/3E 2011/3E 2012/3E 2013/3E 2013/9E
840,234 823,337 802,231 787,562 787,605 766,820 766,928 767,034 767,240
4,660 4,360 3,680 2,395 2,633 2,224 2,271 2,650 3,205
49.4% - 6.4% - 15.6% - 34.9% 9.9% - 15.5% 2.1% 16.7% 20.9%
1,728.16 1,713.61 1,212.96 773.66 978.81 869.38 854.35 1,034.71 1,194.10
46.2% - 0.8% - 29.2% - 36.2% 26.5% - 11.2% - 1.7% 21.1% 15.4%
3,209.8 3,398.4 2,563.5 1,627.8 2,169.0 1,886.5 1,839.6 2,340.7 2,624.3
3,820 4,128 3,195 2,067 2,754 2,460 2,399 3,052 3,420
1.22 1.06 1.15 1.16 0.96 0.90 0.95 0.87 0.94
4,238.7 4,585.8 3,605.9 2,564.2 3,160.8 2,918.3 2,829.9 3,417.3 3,712.6
5,040 5,570 4,490 3,260 4,010 3,810 3,690 4,460 4,840
0.92 0.78 0.82 0.73 0.66 0.58 0.62 0.59 0.66PBR on an adjusted basis
BPS on a financial accounting basis (yen)
PBR on a financial accounting basis
Adjusted capital (billions of yen)
(Reference) TOPIX
Percentage change
Shareholders' equity after tax on a financialaccounting basis (billions of yen)
BPS on an adjusted basis (yen)
Adjusted number of issued and outstandingshares (thousands of shares)
Share price (yen)
Percentage change
Copyright (c) 2013 Tokio Marine Holdings, Inc. 36
Factors of Change in Adjusted CapitalReference
Accumulated other comprehensive income
(billions of yen)
3,417.3
- 21.0
+ 91.4
+ 108.0
+ 109.2
- 26.4
+ 14.7+ 19.3
3,712.6
Adjusted capitalas of 3/E 2013
Adjusted capitalas of 9/E 2013
Unrealized gains on
securities, net of taxes
Foreign currency
translation adjustments
Others Value of in-force policiesin life insurance
business
Reserves of capital nature
(after tax)
Items of net assets Adjustment items
Net incomeDividends
1,300.6
1,323.7
402.1
686.1
Shareholders' equity
Reserves of capital nature
Value of in-force policiesin life insurance business
Copyright (c) 2013 Tokio Marine Holdings, Inc. 37
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 to 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 (estimate)
Reference (applied FX rate)
approx. ¥ +1.0B*2
approx. ¥ - 1.7B*2
approx. ¥ +10.0B
Impact of FX Rate Change on the Group's Financial ResultsReference
JPY 98.59(end-Jun. 2013)
FX rate (USD/JPY)
FY20132Q Results
FY2013Projections(Revised)
JPY 97.75(end-Sep. 2013)
Overseas subsidiaries
TMNF
FY2012Results
JPY 94.05(end-Mar. 2013)
JPY 86.58(end-Dec. 2012)
JPY94.05
(end-Mar. 2013)
FY2013Projections(Original)
JPY97.75
(end-Sep. 2013)
Copyright (c) 2013 Tokio Marine Holdings, Inc. 38
Other
Assets backing long-term insurance liabilities
Assets backing long-term insurance liabilities
Domestic Non-Life (TMNF) Domestic Life (TMNL)
TMNF Total Assets ¥8.5T (as of Sep. 30, 2013)
Business-related equities
Investments in subsidiaries and affiliates
Continue to reduce holdings
Absolute return investment and lending
31%
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
TMNL Total Assets ¥4.7T (as of Sep. 30, 2013)
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
87%
Appropriately control the yen-denominated interest rate risks of long-term insurance liabilities including deposit-type insurance, with yen-denominated fixed income assets
14%
28%
13%
14%
Carefully select investment targets from domestic and foreign bonds, etc. andaim for profit contribution
Asset Management - Asset Portfolio
Mainly yen-denominated fixed income assets
13%
Short-term investments, etc.
Appropriately control interest rate risks of life insurance liability
Reference
(Including short-term investments)
(Including part of foreign securities backing foreign currencydenominated insurance liabilities)
OthersReal estate for own use and non-investment assets
Mainly yen-denominated fixed income assets
Copyright (c) 2013 Tokio Marine Holdings, Inc. 39
(billions of yen)
Sovereign bonds Other(Corporate bonds, etc.)
European countries total 134.1 132.2
(Five countries*) 2.9 7.0
*Heavily-indebted European countries which are Portugal, Ireland, Italy, Greece, and Spain
Asset Management - Status of Investments
(Sum of major subsidiaries (domestic and overseas) as of the end of 2Q 2013)
(Sum of major subsidiaries (domestic and overseas) as of the end of 2Q 2013)
Status of Investments in Bonds of European Countries
Status of Investments in Securitized Products
(billions of yen)As of the end of 2Q 2013*1 Domestic Offices Overseas Offices
CDS 39.9 39.9 -AAA - - -AA - - -A - - -BBB 39.9 39.9 -Other than above - - -
ABS (Securitized products) 501.7 48.1 453.5Agency MBS*2 158.5 19.1 139.3AAA 81.3 27.6 53.7AA 18.1 - 18.1A 27.4 1.0 26.4BBB 42.7 - 42.6Other than above 173.5 0.2 173.2
Total 541.7 88.1 453.5
Financial guarantee reinsurance (relating to securitized products) 162.5 162.5 -*1 CDS: Notional value ABS: Market value Financial guarantee reinsurance: Par outstanding
*2 Agency MBS: MBS by Fannie Mae, Freddie Mac, and Ginnie Mae
Reference
Copyright (c) 2013 Tokio Marine Holdings, Inc. 40
TMNF Adjusted Earnings
Adjusted Earnings by Business Domain
2Q FY2013 Adjusted Earnings (Group Total)Reference
Group total adjusted earnings increased by ¥34.8B YoY to ¥108.2B
Excluding the effect of risk discount rate change used for calculation of EV (¥ - 41.6B), group total adjusted earnings increased by ¥76.5B YoY to ¥149.8B
Domestic Non-LifeTMNF: Increased by ¥1.2B YoY to ¥32.0B Decrease in natural catastrophe losses Improvement in underwriting results in fire and auto Increase in i) provision for reserves for foreign currency denominated
outstanding claims, ii) losses on hedging foreign currencies, due to the yen turning to depreciation, iii) others
Domestic LifeTMNL: Decreased by ¥29.6B YoY to ¥ - 5.0B Increase in EV due to a steady increase in new policies Decrease in EV due to changes in risk discount rate, etc.
FL: Increased by ¥13.5B YoY to ¥5.9B Increase in EV due to the improvement of the investment environment, etc.
International InsuranceIncreased by ¥42.7B YoY to ¥71.0B New contribution from Delphi's consolidation Decrease in outstanding claims reserves in Asia relating to Thai Flood
occurred in FY2011, among others
Net income ofTMNF for
accountingpurposes
+
Provision ofcatastrophe
reserves, etc. netof taxes
+
Provision forprice fluctuationreserves, net of
taxes
-
Gains/losses onsales or evaluationof ALM bonds andinterest rate swaps,
net of taxes
-
Gains/loses onsales or
evaluation ofstocks and
properties held,net of taxes
-Other extraordinaryprofits/losses andvaluation reservesetc., net of taxes
=Adjusted
earnings ofTMNF
¥ 69.7B ¥ 16.2B ¥ 1.2B ¥ 9.7B ¥ 25.4B ¥ 20.0B ¥ 32.0B
(billions of yen)
Change
Domestic Non-Life 26.4 33.6 7.1
TMNF 30.8 32.0 1.2
NF -1.8 3.5 5.3
Other -2.5 -1.9 0.5
Domestic Life*1, 2 16.4 0.6 -15.8
TMNL 24.5 -5.0 -29.6
FL -7.6 5.9 13.5
Other -0.4 -0.2 0.2
International Insurance 28.3 71.0 42.7
PHLY 10.6 16.4 5.8
Delphi - 17.2 17.2
North America 2.5 1.2 -1.3
Kiln 5.6 10.2 4.6
Europe & Middle East 0.7 0.7 0.0
South & Central America 0.7 1.0 0.3
Asia 1.3 15.4 14.1
Reinsurance 5.8 7.2 1.4
International Non-Life*3 26.9 71.0 44.0
International Life 1.7 0.7 -0.9
Financial & General 2.1 2.8 0.7
Group Total 73.3 108.2 34.8*1: Excluding capital transactions*2: Simplified calculation method is applied for EV as of end of Sept. 2012 and as of end of Sept. 2013. The calculation is an unaudited basis*3: International Non-Life figures include some life insurance premiums of composite overseas subsidiaries
FY20132Q
Results
FY20122Q
ResultsBusiness Domain
Copyright (c) 2013 Tokio Marine Holdings, Inc. 41
Consolidated Results Overview (2Q FY2013 Results) Premiums Income (Net premiums written + Life insurance premiums)
Net premiums written:Increased due to revenue growth in domestic non-life business centering in auto and steady growth at overseas subsidiariesand the new contribution from Delphi's consolidation,as well as the depreciation of the yen, etc.Life insurance premiums:
Decreased mainly due to an increase in surrender benefits and other refunds at FL associated with the recovery of the domestic stock market, despite the following increase factors:
i. Increase in in-force policies at TMNLii. Favorable sales in Asia (ex-Japan)iii. New contribution from Delphi's consolidation
Ordinary ProfitTMNF:
Increased due to an increase in investment income despite the following decrease factors in underwriting profit:
i. Decrease in reversal of catastrophe loss reservesii. Increase in provision for reserves for foreign currency
denominated outstanding claims due to the yen turning to depreciation
Overseas Subsidiaries:Increased mainly due to:
i. Revenue growth at each entitiesii. New contribution from Delphi's consolidationiii. Depreciation of the yen
Interim Net Income Increased due to the same factors as in ordinary profit,
despite the reversal effect of extraordinary gains inFY2012 at TMNF
Reference
(billions of yen, except for %)
Premiums income (TMHD Consolidated) 1,432.2 1,583.4 + 151.2 + 10.6%
Net premiums written 1,251.1 1,415.0 + 163.9 + 13.1%
TMNF 929.7 971.2 + 41.5 + 4.5%
NF 69.6 69.1 - 0.5 - 0.8%
Life insurance premiums 181.0 168.3 - 12.7 - 7.0%
TMNL (Insurance premiums and other) 257.3 294.2 + 36.8 + 14.3%
Ordinary profit (TMHD Consolidated) 82.9 148.6 + 65.7 + 79.3%
TMNF 52.7 107.6 + 54.9 + 104.3%
NF - 0.5 3.8 + 4.3 -
TMNL 12.0 8.3 - 3.7 - 30.9%
FL - 3.5 - 0.3 + 3.2 -
Overseas subsidiaries 40.5 92.3 + 51.8 + 128.0%
Financial and general 2.1 3.0 + 0.8 + 41.2%
Others (Elimination, etc.) - 20.3 - 66.1 - 45.8
Net income (TMHD Consolidated) 62.5 91.4 + 28.8 + 46.2%
TMNF 44.7 69.7 + 24.9 + 55.7%
NF 0.0 2.5 + 2.4 + 2,638.6%
TMNL 7.5 5.0 - 2.4 - 32.6%
FL - 5.4 - 0.3 + 5.1 -
Overseas subsidiaries 32.7 76.4 + 43.7 + 133.5%
Financial and general 1.2 2.0 + 0.8 + 64.7%
Others (Elimination, etc.) - 18.3 - 64.0 - 45.6
FY20122Q
FY20132Q Change YoY
Copyright (c) 2013 Tokio Marine Holdings, Inc. 42
Premiums Income (Net premiums written + Life insurance premiums)
Net premiums written:Upward revision mainly due to favorable first-half results in domestic non-life centering in auto, in addition to the positive impact from the depreciation of the yen at overseas subsidiariesLife insurance premiums:
Downward revision due to an increase in surrender benefits and other refunds at FL associated with the recovery of the domestic stock market
Ordinary ProfitTMNF:
Downward revision mainly due to:i. Decrease in reversal of catastrophe loss reserves due
to the carry-over of claims payment relating to natural catastrophes occurred in previous fiscal years, toFY2014
ii. Increase in provision for reserves for foreign currencydenominated outstanding claims due to the depreciation of the yen
FL:Upward revision mainly due to expected reversal of additional provision for underwriting reserves in accordance with improvement of the investment environmentOverseas Subsidiaries:
Upward revision mainly due to the favorable business results at present and further depreciation of the yen
Net IncomeUpward revision due to the same factors as in ordinary
profit
Consolidated Results Overview (FY2013 Revised Full-Year Projections)Reference
(billions of yen)
Original Revised
Premiums income (TMHD Consolidated) 2,957.8 3,170.0 3,240.0 + 70.0
Net premiums written 2,558.0 2,710.0 2,800.0 + 90.0
TMNF 1,869.6 1,911.0 1,947.0 + 36.0
NF 138.7 138.5 137.9 - 0.6
Life insurance premiums 399.8 460.0 440.0 - 20.0
TMNL 566.5 619.9 632.6 + 12.7
Ordinary profit (TMHD Consolidated) 207.4 270.0 285.0 + 15.0
TMNF 156.1 209.0 194.0 - 15.0
NF 4.5 4.3 5.5 + 1.2
TMNL 22.6 11.6 15.5 + 3.9
FL - 0.7 - 5.8 2.6 + 8.4
Overseas subsidiaries 97.3 115.2 141.8 + 26.6
Financial and general - 17.9 3.8 3.9 + 0.1
Others (Elimination, etc.) - 54.6 - 68.1 - 78.3 - 10.2
Net income (TMHD Consolidated) 129.5 170.0 185.0 + 15.0
TMNF 58.6 137.0 130.0 - 7.0
NF 2.6 2.6 3.4 + 0.8
TMNL 13.9 7.1 9.8 + 2.7
FL - 2.6 - 5.8 2.6 + 8.4
Overseas subsidiaries 80.4 95.9 113.6 + 17.7
Financial and general - 20.0 2.3 2.4 + 0.1
Others (Elimination, etc.) - 3.4 - 69.1 - 76.8 - 7.7
FY2013 ProjectionsFY2012Results Difference
Copyright (c) 2013 Tokio Marine Holdings, Inc. 43
Generate capital and cash Improve capital efficiency by
globally diversifying our business portfolio
Expand Profit Improve the combined ratio in our domestic non-life
insurance business Sustainable growth in the domestic life insurance and
international insurance businesses Seize new growth opportunities by investing in new
businesses
Enterprise RiskManagement
(ERM)
A global insurance group sustaining growth by offering quality that customers selectMid- to Long-Term Vision
"Innovation and Execution 2014" Overview
Improve Capital Efficiency Continue reducing the risks associated with business-related
equities Invest in businesses with high capital efficiency Enhance global diversification of risk Achieve an appropriate level of capital via dividends and flexible
repurchases of shares
Improve and expand the profitability of existing businesses Continue reducing the risks associated with business-related equities
Drive new growth and enhance capital efficiency by investing in new businesses Achieve an appropriate level of capital via dividends and flexible repurchases of shares
Mid-Term Business PlanReference
Copyright (c) 2013 Tokio Marine Holdings, Inc. 44
Improving profitability mainly through product and rate revisions
Assuming negative factors in development of grade discounts and the depreciation of insured automobiles
Implementing additional measures in a timely and effective manner in response to the underwriting results in auto
Lowering corporate expensesRevising the agency commission pointsAchieve steady premium growth by enhancing the sales
force
Plan for Achieving the Target Combined Ratio (TMNF)
Improve profitability to achieve a combined ratio ("C/R") at a 95% level by FY2014
FY2011 C/R :103.3% FY2014 C/R :95%
-1.0% C/R
Assuming of an average level of losses related to natural catastrophes
Conservative assumptions as to the level of natural catastrophe-related losses and reinsurance costs in light of the increase of natural disasters
-2.0% C/R
-5.0%~-6.0% C/R
Improve operational efficiency and achieve premium growth
Improvement of underwriting
Factors relating to natural catastrophes
(Private insurance basis)
Mid-Term Business PlanReference
Copyright (c) 2013 Tokio Marine Holdings, Inc. 45
Target an aggregate Adjusted Earnings (EV increase) of ¥180B *
Fiscal Year-end EV (billions of yen) Annualized Premiums (billions of yen)
• New Policies
• In-force Policies
Mid-Term Business Plan Objectives in the Mid-Term Business Plan (TMNL)
49.6 50.757.3
80.6 81.0
396.7382.5419.4
470.4518.4
FY2011 FY2012 FY2014(Outlook)
FY2010FY2009 FY2013Projections(Original)
FY2011FY2010FY2009
EV increase180*
FY2013Projections(Original)
FY2012 FY2014(Target)
approx. 700
516.3
439.8
390.6
601.1
656.8
CAGRapprox.
10%
619.2
FY2013Projections(Revised)
91.3
FY2013Projections(Revised)
527.5
FY2011 FY2012 FY2014(Outlook)
FY2010FY2009 FY2013Projections(Original)
FY2013Projections(Revised)
Reference
*excluding capital transactions
Copyright (c) 2013 Tokio Marine Holdings, Inc. 46
■ Business and Geographical Portfolio Breakdown(Adjusted Earnings basis)
Objectives in the Mid-Term Business Plan(International Insurance Business)
■ Adjusted Earnings (billions of yen)
FY2011 FY2012 FY2014(Target)
FY2010FY2009 FY2013Projections(Original)
*1: Average-level adjusted earnings excluding extraordinary factors (adjustment relating to ¥27.9B natural catastrophe loss incurred in 1Q FY2011) *2: Average-level adjusted earnings excluding the excess loss of the forecast from natural catastrophes such as Thai Flood
FY2010 Results *1
¥52.7B
FY2014 Target¥100.0B
Lifeapprox. 14%
Non-Life Primaryapprox. 69%
Reinsuranceapprox. 17%
Kiln18%
Asia Non-life8%
OtherNorth America
6%
Philadelphia28%
Delphi19%
Asia Life4%Reinsurance
12%
Europe &Middle East
1%
South & Central America 4%
Reinsuranceapprox.
18%
Non-Life Primaryapprox. 76%
Lifeapprox.
6%
43%
2%10%
18%
9%
12% 6%
Mid-Term Business Plan
52.7*1 *255.0
69.2
100.090.0
76.5
24.8
-11.9
115.0
FY2013Projections(Revised)
Reference
Copyright (c) 2013 Tokio Marine Holdings, Inc. 47
*1 Each adjustment is after-tax basis*2 Reversal are subtracted*3 ALM: Asset Liability management
Excluded as counter balance items against market value fluctuations of liabilities
*4 Calculations are based on net income basis for life insurance companies in certain regions.
*5 EV: Embedded ValueAn index in which the net asset value and the net present value of profits generated form the existing policies are combined
1. Adjusted earnings*1
2. Adjusted capital*1 (average balance basis) 3. Adjusted ROE
Definition of Adjusted Earnings
(1) Property and casualty insurance business
(3) Other businesses … Net income determined following financial accounting principles
EV at end ofcurrent fiscal
year
Adjusted earnings
Adjustedearnings
=
Gains or losses fromsales or valuations of
ALM bonds and interestrate swaps *3
Provision forreserves for
pricefluctuations*2
Provision forcatastrophe
reserves etc. *2
Netincome
Increase in EVduring the
current fiscalyear
Capital transactions such ascapital increase
< Basic concept >
EV at end ofprevious
fiscal year
-
+ +
Capitaltransactions,
includingcapital
increase
Increase in EV *5
during the currentfiscal year
(2) Life insurance business *4
- -Gains or losses fromsales or valuations ofstocks and properties
Extraordinarygains/losses,
valuationallowances and
others
= -Adjustedearnings
(3) Other businesses … Net assets determined following financial accounting principles
+ Catastrophereserves, etc.
(2) Life insurance business *4
(1) Property and casualty insurance business
Reserves forprice
fluctuations
Adjustedcapital += Capital
Adjustedcapital = EV*5
= ÷Adjusted
ROEAdjusted
capitalAdjustedearnings
Reference
Copyright (c) 2013 Tokio Marine Holdings, Inc. 48
DisclaimerThese 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 anyjurisdiction. To the extent distribution of these presentation materials or theinformation 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.comTel : +81-3-3285-0350
201311290930