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Management
Strategy Section
9 Message from the President and Group CEO
14 Explanation of Management Strategies by Group CFO
20 Aligned Group Management
22 Message from Group CRO
24 Message from Group CSSO and Group CDO
26 Message from Group CRSO and Group Co-CRSO
28 Message from Group CIO and Group Co-CIO
30 Message from Group CHRO
32 Message from Group CITO and Group CISO
What’sTokioMarineGroup
ManagementStrategySection
OperationsSection
SustainablyEnhancingCorporateValue
FinancialData
CorporateData
8 Tokio Marine Holdings | Integrated Annual Report 2018
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Message from the President and Group CEO
We aim to be a company that plays an important role in society, a “Good Company”. Through continuous group effort, we will strive to be recognized as such by all of our stakeholders now and for the next 100 years. Our group vision is “To Be a Good Company”.
Withinthisvisionthephrase“tobe”carriesa
significantmeaning—itindicatesourongoing
determinationandourcommitmenttoour
timelessendeavor“ToBeaGoodCompany”.
TsuyoshiNaganoPresidentandGroupCEO
9Tokio Marine Holdings | Integrated Annual Report 2018
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Delivering Safety and Security to Our Customers
around the World
Guidedbyourcorporatephilosophyof“placingcustomertrustasthebaseofallof
ouractivitiesandcontinuouslyworkingtoincreasecorporatevalue,”wehavebeen
workingtorealizethelong-termvision“tobeaglobalinsurancegroupthatdelivers
safetyandsecuritytocustomersworldwideandsustainsgrowth—ourtimeless
endeavor‘ToBeaGoodCompany’nowandforthenext100years.”WhenItalkabout
a“GoodCompany,”Imeanacompanythatprovidesvaluetoourcustomersandsoci-
etybybeingthereintheirtimesofneed.Itisbydeliveringonthiscommitmentthat
wewillearnthetrustofstakeholdersandwillsimultaneously,asanoutcome,further
developcorporatevalue.
Asacompany,itisimportantthatwedon’tsimplychaseshort-termprofits.The
purposeweexistasaninsurancecompanyistosupportourcustomersandsociety
whentheyneed.Bydoingbusinesstherightwayandearningtrust,profitwillfollow.
Profitisinmanywaysabarometerofhowwellweareearningthetrustofsociety.
Withthispurposeinmind,ourprincipalfocusisonmeetingtheexpectationsofcus-
tomersandsociety,thereforesuccessisaresultthatfollows.Weconsiderthiscycle
basedonbuildingcustomertrustfirsttobeofcriticalimportance.
In“ToBeaGoodCompany”thephrase“ToBe”ismostimportantasitrepresentsan
endlessjourney;itdoesnothaveasetgoal.Inarace,thefinishlineiswhereyou
stop,andyourmomentumandspeedisgone.A“GoodCompany”doesnothavean
endpointandshowsourapproachtoalwayscontinuetoimproveandstrivetodo
moreforourcustomers.
Tokio Marine
Group Long-Term
Vision
Tokio Marine
Group Value
Creation Model
MessagefromthePresidentandGroupCEO
Realizing the Long-Term Vision
TokioMarineGroupValueCreationModelwascreatedtoallowustoachievethe
long-termvisionofourorganization.
Sinceitwasfoundedin1879,TokioMarineGrouphasalwaysplacedcustomers‘
trustatthecenterofallitsactivities.FromtheGreatKantoEarthquaketothemore
recentGreatEastJapanEarthquake,oranyoftheotherchallengingeventsthataffect
ourcustomers,wehavealwaysstoodbytheirsidethroughthebadtimesandhave
beentheretosupporttheirnewchallengesthroughinnovation.
Sinceourfoundation,wehaveworkedinternationallytosupportourclients.When
therewereonlyaroundathousandcarsinJapan,welaunchedthefirstcarinsurance.
Whenderegulationin1996allowednon-lifecompaniestoenterthelifeinsurance
market,wedid.In2002,toprotectourclientswithbothlifeandnon-lifecoverage,
wedevelopedthefirstintegratedinsuranceproduct:“SuperInsurance.”
10 Tokio Marine Holdings | Integrated Annual Report 2018
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Itisthroughnewinitiativesandinnovationslikethesethatwehavebeenableto
earncustomers’trust.Anditisthistrustthathasenabledustodeliversustainable
growth,abalancedglobalportfolio,andastrongfinancialbase.Allofthishasbeen
builtonthefactthatouremployeeshavethemindset,aswellasthewill,tobethere
forourcustomersintheirtimeofneed.
Inrecentyearswehaveseenincreasingvolatilityintermsofclimate,naturaldisas-
ters,demographicandsocioeconomicchanges.Toworkonthesechangesthe
UnitedNationscreatedtheSustainableDevelopmentGoals(SDGs).Tobeableto
handleandrespondtoallofthesechallengesourbusinesswillalsoneedtobecome
increasinglyagile.
Insuranceisapeople’sbusiness.Inthesevolatiletimes,toensurewearetherefor
ourcustomers,weneedtoempowerallofourdiverseemployeesaroundtheworld
toworkwithpassionandtofeeltheimportanceoftheworkthattheydo.While
embracingthisdiversityandworkingasaglobalteam,weneedacommonthread
thatcanbringusalltogether.Forus,thatisourcoreidentity—ToBeaGoodCompany.
Workingunderthecoreidentityof“ToBeaGoodCompany”wecanhavean
engagedandunitedworkforcethatwillhelpusadvanceourcorporatestrategyand
alignedgroupmanagementandhaveahighleveloftransparencyovertheGroup.
Withthesethingswewillbebetterplacedtoserveourcustomers,earntheirtrust,
anddelivertheresultstoourshareholders.Thispositivecycleisthedriverofoursuc-
cesssoweneedtoensureweprovideouremployeeswithanenvironmentwhere
theycanperformandprosper.Ifeelcreatingthisenvironmentisoneofmymost
importantjobs.Ifwecancontinuetoturnvaluecreatedintostrength,wewillbeable
toraiseourcorporatevalueandcontinuethepositivecycle.Thisisour“Value
CreationModel.”
TownhallmeetinginMalaysia
11Tokio Marine Holdings | Integrated Annual Report 2018
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MessagefromthePresidentandGroupCEO
New Mid-Term
Business Plan
“To Be a Good
Company 2020”
A Key Period to Realize the Future Vision for the Group
Tounderstandourcurrentsituation,letmebeginwithabrieflookatrecenthistory.
Inordertodeliversafetyandsecuritytocustomersaroundtheworld,TokioMarine
Groupenteredthelifemarketin1996,activelypursuedoverseasgrowthfrom2008,
andhasalsoworkedtodevelopandgrowthedomesticnon-lifebusiness.In2017,we
experiencedonce-in-a-generationhurricaneeventsinNorthAmerica,butduetoour
diversificationwemanagedtokeepitsimpacttojust15%ofearningsfortheyear.
Whenwewereputtingthemid-termbusinessplantogether,wetookastepback
totrytoforecastthebigenvironmentalchangestheGroupwillbeexperiencingand
thinkaboutwhatweshouldbetryingtoachieveinsuchaworld.Intheinsurance
industrywearestartingtoexperienceanunprecedentedrateofchange.Whilethis
presentsathreattoourcorebusinessitalsopresentsuswithopportunity.Newtech-
nologywillenablepeopletolivesaferlivesbutwillcomewithnewemergingrisks
thatwillcreatenewinsuranceneeds.
Thekeyforusthenistobeabletoturnthechangestoopportunities.Toachieve
thiswehaveidentifiedthe“FourKeyElementsoftheFutureGroupVision”thatwill
allowustotakeadvantagesofopportunitiestocontinueourcurrentdirectionof
growth.The“FourKeyElements”canbecapturedinthefollowingstatement:Builton
a“GlobalBusinessPlatform”wewillhavean“OptimumPortfolio,”“StrongGroup
Synergies,”and“LeanManagementStructure”thatwillcreatesuperior
competitiveness.
IfweareabletoachievethesefourkeyelementsintheFutureGroupVision,
thenweshouldbeabletodeliverdouble-figureROE.Thisabilitytodeliversteady
profitscombinedwithourcapitalefficiencywillallowustogivegreaterreturnsto
ourshareholders.Infigures,thatmeanswewouldliketodeliveradjustednetincome
ofover500billionyenandadjustedROEofapproximately12%.
Future Group Vision
Optimum Portfolio
Wewouldliketoensuregrowthinkeymarketssuchasemergingcountriesaswellasspecialtyand
medicalandnursing-carerelatedinsurance.Wewillalsoneedtostablydeliverthoseresultsthrough
theappropriatediversificationofproducts,geographies,andbusinesslines.
Strong Group SynergiesWiththeadvancementofalignedgroupmanagement,wehopetomaximizegroupsynergiesand
reinforcelocalbusinessesinordertodeliverevenhigherresults.
Lean Management StructureWeaimtocreatealeanandnimblemanagementteamthatisagileandefficientlydeliverresults
acrossourglobalbusinessplatform.
Global Business Platform
With“ToBeaGoodCompany”asourcorevision,whileleveragingourglobaltalentaroundtheworld,
wewillcreateamanagementteamthatisabletostrengthenandsupportourbusinessesaround
theworld.
12 Tokio Marine Holdings | Integrated Annual Report 2018
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In Closing
Finally,pleaseletmerestateourcommitmenttoworktogetherasagrouptobe
thereforourcustomersandtodeliveronthecommitmentsIhavedescribedhere.
Wewillcontinuetoworktoraiseourcorporatevalueforourshareholdersandall
otherstakeholders,andIaskforyourcontinuedsupportonthisjourney.
Thankyou.
To All of Our
Stakeholders
Thenewmid-termbusinessplanstartingin2018willbeaveryimportantstep
fortherealizationofthefuturestateoftheGroup.Duringthenextthreeyears,we
believetheenvironmentwillremaintoughwithlarger-scalenaturalcatastrophes
andlowinterestratesinJapan.However,eveninthisenvironment,wewillcontinue
withchangesnecessaryforgrowth—andthisisthecorethemeofthenewmid-term
businessplan.
Thisvideofeatureseasy-to-understandexplanationsofTokioMarineGroup’s
long-termvisionandnewmid-termbusinessplanbyPresidentandGroup
CEOTsuyoshiNagano(approximately17minutes).
Note:Theuserwillberesponsibleforanycommunicationfeesincurredwhile
viewing.TheCompanymayceasedistributionofthisvideowithout
priornotice.
13Tokio Marine Holdings | Integrated Annual Report 2018
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Review of the Previous Mid-Term Business Plan—“To Be a Good Company 2017”
Underthepreviousmid-termbusinessplan—“ToBea
GoodCompany2017”—weadvancedinitiativesbased
onthethreepillarsof“sustainableprofitgrowth,”
“enhancecapitalefficiency,”and“enhanceshareholder
return.”Sustainableprofitgrowthwasachievedthrough
steadyorganicgrowthinallbusinesses,theacquisition
ofTMHCC,andtheexerciseofGroupsynergies.Atthe
sametime,wewereabletoimproveourriskportfolio
throughthecontinuoussaleofbusiness-relatedequi-
tieswhileenhancingcapitalefficiencythroughflexible
sharerepurchase.
Asaresult,adjustednetincomeinfiscal2017came
to397.0billionyenandadjustedreturnonequity(ROE)
was10.0%whenexcludingtheimpactsofnatural
catastrophes,FXeffects,andothertemporaryfactors.
Weweretherebyabletoachieveperformanceinline
withourinitialtargets,whichwereadjustednet
incomeofapproximately400.0billionyenand
adjustedROEintheupper9.0%range.
Asforshareholderreturn,wechosetoissuean
annualdividendof160yenpershareforfiscal2017,
makingforanincreaseof20yenpershareabovethe
previousfiscalyearandoursixthconsecutiveyearof
higherdividendpayments.Alsoduringthefiscalyear,
Explanation of Management Strategies by Group CFO
Through the new mid-term business plan,
“To Be a Good Company 2020,”
Tokio Marine Group will strive to establish
earnings bases to achieve profit growth
and enhance shareholder return.
Takayuki YuasaSeniorManagingDirector
GroupCFO(GroupChiefFinancialOfficer)
298.1
397.0
2014 2017
+98.9
Adjusted Net Income
(Billionsofyen)
2014 2017
160
95
Annual Dividend Per Share
(Yen)
+65
Sustainable profit growth Enhance capital efficiency Enhance shareholder return
Review of the Previous Mid-Term Business Plan
Target
Adjusted net income: Approx.
¥400 billion
Target
Adjusted ROE: Upper 9% range
Target
Steady growth of dividends
in line with profit growth
Normalizedbasis Adjustednetincome:Netincurredlossesrelatingtonaturalcatastrophelosses
arenormalizedtoanaverageannuallevel.Inaddition,
asfor2017,excludingFXeffectsandone-timeimpact
ofU.S.TaxReform
Adjustednetassets:AdjustedtothemarketconditionofMar.31,2015
(USD/JPYexchangerate:¥120.17;
Nikkeistockaverage:¥19,206)
Seepage5forpre-adjustmentfigures.
10.0%
7.6%
2014 2017
Adjusted ROE
+2.4pt
Share repurchases*
FY2016: ¥50.0 billion
FY2017: ¥150.0 billion (maximum)
*Totalamountapprovedbytheannounce-
mentdateoffull-yearfinancialresultsof
respectiveyears
14 Tokio Marine Holdings | Integrated Annual Report 2018
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New Mid-Term Business Plan—“To Be a Good Company 2020”
Future Vision for the Group
Increatingthenewmid-termbusinessplan,we
definedfourkeyelementstoguideoureffortstolink
changesinthebusinessenvironmentthataffectthe
insuranceindustrytobusinessopportunitiesand
therebyachievefuturegrowth.
Thefirstoftheseelementsistoachievetheoptimum
portfolio.Thisseesusoptimallydiversifyingrisksby
geographicregionandareaoftheinsurancebusiness
andtherebystabilizingGroupearnings.
ThesecondelementistorealizestrongGroupsyn-
ergies.Groupcompaniesutilizethestrengthsandexper-
tiseofotherGroupcompaniesinareciprocalmanner
todriveorganicgrowth.
Thethirdisforaleanmanagementstructure,by
whichwemeanaflexiblemanagementstructurefree
ofinefficiencies.Byachievingthis,wewillbuildastruc-
turethatwillenableustogenerateprofitunderany
environment.
Thesewillbesupportedbythefourthelement:a
globalbusinessplatform.Byaccomplishingthis,wewill
transformTokioMarineGroupintoanorganizationin
whichadiverserangeoftalentedindividualsareable
toexercisetheirskillsintheidealpositionunitedunder
ourcoreidentityasa“GoodCompany.”
Byaccomplishingthesefourelements,wewillaim
toconsistentlymaintaindouble-digitROEandgenerate
exceptionalshareholderreturn.Quantitatively,wewill
worktowardthetargetsofadjustednetincomeofover
500billionyenandadjustedROEofapproximately12%.
wemadethedecisiontoacquire150.0billionyen
worthofsharerepurchases.Thetotalamountofshare
repurchasesacquiredoverthethree-yearperiodof
“ToBeaGoodCompany2017”was200.0billionyen.
Overall,myevaluationofthepastthreeyearsunder
thepreviousmid-termbusinessplanisthatwewere
abletoincreasetheGroup’s“earningscapacity”and
realizeongoingimprovementsincorporatevalue,as
indicatedbytheaforementionedachievements.
Thetotalshareholderreturn(TSR),whichrepresents
capitalreturnafterreinvestingdividends,was3.1times
onMarch31,2018,whencomparedwiththatatthe
timeofTokioMarineHoldings’establishment.Withthis
figure,wearegreatlyoutperformingtheTokyoStock
PriceIndex(TOPIX),andshareholdervaluecontinues
torisesteadilywhenviewedfromalong-term
perspective.
Transition of Total Shareholder Return* AsofMarch31,2018
*TotalShareholderReturn(TSR):CapitalreturnafterreinvestingdividendsStockpriceindexedat100onApril1,2002 Source:Bloomberg
Apr. 2002 Apr. 2006 Apr. 2014Apr. 2010 Mar. 20180
100
200
300
400
TOPIX
215
312
15Tokio Marine Holdings | Integrated Annual Report 2018
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ExplanationofManagementStrategiesbyGroupCFO
Priorities of the New Mid-Term Business Plan
Thenewmid-termbusinessplanrepresentsacrucial
steptowardrealizingthefuturestateoftheGroup.We
expectachallengingbusinessenvironmentforTokio
MarineGrouparisingfromlarger-scalenaturalcatastro-
phes,persistentlylowinterestrates,andotherfactors.
Accordingly,wehavedefinedthreeprioritiestobe
addressedinordertorealizethefuturestateofthe
Group:(1)furtherdiversificationofportfolio;(2)
enhancementofbusinessstructure;and(3)strength-
eningofalignedGroupmanagement.
1. Further Diversification of Portfolio
Wehavemadeeffortsovertheyearstodiversifyour
businessonaglobalscale,andtheresulthasbeen
substantialimprovementtothebalanceofourbusi-
nessportfolio.However,wearestillinneedoffurther
diversificationintermsofgeographicallocationand
businessarea.Wewillthusseektoachievethisdiversi-
ficationbyactivelycapitalizingonM&Aopportunities
aswesimultaneouslypursueorganicgrowth.Our
targetisnotlimitedtodiversificationofgeographical
location;wearealsotransformingourproductlineups
andbroadeningourbusinessareas.Tothisend,weare
expandingourspecialtyinsurancelineupinthenon-
lifeinsurancebusinessandourprotection-typeproduct
lineupinthelifeinsurancebusiness.
2. Enhancement of Business Structure
Inordertoachievealeanmanagementstructure,itis
absolutelyessentialthatweworktowardtheenhance-
mentofourbusinessstructure,streamliningunneces-
saryportionsofthisstructuretoincreaseflexibility.In
thisundertakingwewillutilizetechnology,specifically
bypursuingautomationtothegreatestdegreepos-
sible,whilealsoraisingthevaluethatcanonlybe
providedbypeopletothemostinspiringlevels.This
willbeacommonthemethroughoutallofour
businessstructureenhancementactivities.Tocreate
valuethatcanonlybeprovidedbypeople,wewill
revolutionizeourbusinessmodelwithinnovative
productsandservicesthatpreemptivelyaddresscus-
tomerneedsandmarketchanges.Atthesametime,
wewilltakeadvantageofcutting-edgetechnologies
toformnewpointsofcontactwithcustomersand
strengthensalescapabilities.
3. Strengthening of Aligned Group Management
Withafocusonspreadingthecommonvalueencapsu-
latedinourgoal“ToBeaGoodCompany,”weare
endeavoringtofurtherbuilduponexistingGroup
strengthsbyexercisingGroup-basedsynergies,enhanc-
inglocalmanagementthroughthesharingofbest
practices,andutilizinghumanresourcesonaglobal
basis.Furthermore,weareholdingtownhallmeetings
globallytoentrenchourGroupcultureandheighten
oursenseofunityinordertorealizestrongGroup
synergies.Theaccelerationofsucheffortstostrengthen
alignedGroupmanagementisalsoexpectedto
contributetothedevelopmentofaglobalbusiness
platform.
44% 45% 3%
Business Unit Profits
Future Group Vision
(Image)FY2002
FY2018
Projections
Domesticnon-life Domesticlife* Internationalinsurance
FinancialandGeneralBusinesses
*Domesticlifeinsurancebusiness
-Fiscal2002:TEVbasis
-AfterFiscal2018Projections:MCEVbasis
96%
10%
16 Tokio Marine Holdings | Integrated Annual Report 2018
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Position of New Mid-Term Business Plan
0
160000
320000
480000
640000
800000
Progress up to 2017
Future Group Vision
Optimum Portfolio
Strong Group Synergies
Lean Management Structure
Global Business Platform
New Mid-Term Business Plan
(2018–2020)
“To Be a Good Company 2020”Consistent double-digit ROE
High-level shareholder return
Adjusted
ROE 9.4%
8.9%
1.3%
Adjusted
net income
¥372.0
billion¥323.3
billion
¥30.7
billion
2017
Normalized
basis
2020
Target
20142011
Adjusted ROE Approx. 12%
Adjusted net income
Over ¥500.0 billionAdjustedROE
10%ormore
Profit growth through the estab-
lishment of earnings bases
Increase in shareholder return levelSignificant improvement in
profitability
Priorities
Further diversification of portfolio
Enhancement of business structure
Strengthening of aligned Group management
3～7% CAGR
Shareholder Return Policy
Dividendswillremainourprimarymeansofshare-
holderreturn,andweplantosustainablyincrease
dividendsinlinewithprofitgrowth.Ourtargetforthe
payoutratiowillbesetatabove35%oftheaveragefor
adjustednetincomeandwillberaisedgraduallyto
moveustowardourfuturevisionfortheGroup.For
fiscal2018,weplantoincreasedividendpaymentsby
20yenpershare,to180yen.
Meanwhile,wewilladjustourcapitallevelflexibility
throughsharerepurchasesandothermeansbasedon
comprehensiveconsiderationofmarketconditions,
businessinvestmentopportunities,andotherrelevant
factors.
Targets of the New Mid-Term Business Plan
Throughtheseinitiatives,wearetargetinganaverageannualgrowthrateofbetween3%and7%inadjustednet
incomeincomparisontofiscal2017.Asforcapitalefficiency,wehopetoraiseadjustedROEtoabove10%.
*12018(projections)ispriortoreflecting
sharerepurchases.
*2Totalamountapprovedbytheannounce-
mentdateoffull-yearresultsofrespective
years.Thefigurefor2017isthemaximum.
180
5570
95110
140160
50
High-level
shareholder return
Dividendpershare
(yen)
2011 2012 2013 2014 2015 2016 2017 2018
(Projections)
2020 Future Group Vision
Totaldividends*1
(billionsofyen)
38.3 42.2 53.7 72.2 83.0 105.3 117.6 130.5
Sharerepurchases*2
(billionsofyen)
— — — 50.0 — 50.0 150.0
Projecting dividend per share increases
for 7 consecutive years
Shareholder Return
17Tokio Marine Holdings | Integrated Annual Report 2018
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ExplanationofManagementStrategiesbyGroupCFO
Enterprise Risk Management (ERM)
WepromoteEnterpriseRiskManagement(ERM)asthe
platformonwhichweadvancethenewmid-term
businessplan.Specifically,weremainconstantlyaware
oftherelationshipbetweenrisks,capital,andprofitsto
achievebothcapitaladequacyandprofitabilityrelative
toriskandtherebyrealizecapitalefficiencythat
exceedscostofcapital*(7%).Throughthisapproach,
wewillseektomaintainfinancialsoundnesswhile
realizingongoingimprovementsincorporatevalue.
OurERMinitiativesaresupportedbytheERMCycle.
ForTokioMarineGroup,theERMCycleisacyclical
frameworkofformulatingbusinessplansinaccordance
withriskappetite,decidingcapitalallocation,review-
ing,andevaluatingresults.
First,TokioMarineHoldingsestablishesaRisk
AppetiteFrameworkthatarticulatesabasicmanage-
mentpolicyforthetypesofriskstobetakenandthe
businessfieldsinwhichtheywillbetakentoensure
expectedreturns.TheGroupprimarilytakesriskinthe
insurancebusiness,wheresuchrisksincludeinsurance
underwritingrisksandinvestmentrisks.Weaimto
addressunderwritingrisksthroughriskdiversification
andinvestmentrisksthroughinvestmentspromising
highprofitabilityrelativetorisk.Byincreasingcapital
efficiencywhilemitigatingrisksinthismanner,weaim
toachieveROEofaround12%inthefuture.Inregardto
financialsoundness,wearetargetingacapitallevel
thatwillmaintainanAAcreditrating.TheRiskAppetite
Frameworkcompilesthesebasicpoliciesaswellasthe
specificrisk-takingpoliciesforindividualriskcategories
andbusinessfields.
Next,eachGroupcompanyformulatesbusiness
plandraftsbasedontheRiskAppetiteFramework.
TokioMarineHoldingstakesanoverallGroupperspec-
tiveinassessingwhetherthedraftswillmaintainan
appropriatebalancebetweenfinancialsoundnessand
profitabilitywhileachievingsustainedgrowth.Wethen
makedecisionswithregardtoallocationofcapitalto
eachbusinessplanandsegment.TheresultsofGroup
companiesbasedontheallocatedcapitalarereviewed
annuallyandimprovementsaremadeifnecessary.
Wepromotedisciplinedmanagementbasedonthe
economicsolvencyratio(ESR)toensurefinancial
soundness.TokioMarineGroupcalculatesESR(net
assetvalue÷riskcapital)byquantifyingriskscalcu-
latedatthe99.95%valueatrisk(VaR)confidencelevel,
whichcorrespondstoanAAcreditrating,andcompar-
ingtheseriskstonetassetvalue,whichisarrivedat
basedonthefigureforconsolidatednetassetsusedfor
financialaccountingpurposes.WetargetESRinthe
rangeof150%to210%.
*Costofcapitalistheprofitmargininvestorsexpectfrominvestees.
TokioMarineGroupcalculatescostofcapitalbasedonthecapitalasset
pricingmodel(CAPM)andusesthisfiguretodeterminegrowthindica-
torsandmakebusinessinvestmentdecisions.
Capital Management Based on ESR
Implementationofbusinessinvestment,additionalrisk-taking,and/orshareholderreturn
Target Range
Strategicconsiderationofbusinessinvestment,additionalrisk-taking,andshareholderreturn
Aimingtorecoverthecapitallevelthroughaccumulationofprofits
Controlofrisklevelbyreducingrisk-takingactivities
De-risking
Considerationofcapitalincreases
Reviewofshareholderreturnpolicy
210%
150%
100%
18 Tokio Marine Holdings | Integrated Annual Report 2018
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Thenewmid-termbusinessplanisalsofundamen-
tallybasedonthisERMCycle.Thediagrambelow
examinesthenewmid-termbusinessplanfromthe
perspectiveofERM.Lookingahead,wewillworkto
achievesustainableprofitgrowththroughthe
enhancementofourbusinessstructureandthe
fosteringofGroupsynergies.Theprofitsandcapital
generatedinthismannerwillbededicatedtothe
efficientdeploymentofcapital,whichwillentailmain-
tainingfinancialsoundnesswhilefurtherdiversifying
theportfolioandenhancingshareholderreturn,for
example,asweseektocreatethefoundationsfor
futuregrowth.
Framework of New Mid-Term Business Plan
Domestic non-life insurance business
AchievesustainablegrowthastheGroup’s
corebusiness
Changeourportfoliothroughsales
expansionofspecialtyinsurance
Domestic life insurance business
Expandcorporatevaluebasedoneco-
nomicvalueasagrowthdrivercontribut-
ingtothelong-termprofitoftheGroup
Increasesalesofprotection-typeproducts
International insurance business
Realizehighorganicgrowthandimple-
mentnewbusinessinvestmentasa
growthdriveroftheGroup
Overall Group
Generatefurthersynergyeffects
Appropriatelycontrolbusinessexpenses
Sustainable profit growth Efficient deployment of capital
Based on ERM, realize profit growth while maintaining financial soundness and strategically
allocating capital
Profit growth Maintain financial soundnessEnhancement of
shareholder return
Strategic capital allocation
Generate profits
Enterprise Risk
Management
(ERM)
Investment for growth
Investinnewbusinesseswithdiversifica-
tioneffects
Makepriorinvestmenttoestablishfuture
profitbase(newproducts/new
technology)
Risk reduction/control
Continuesalesofbusiness-relatedequities,
controlrisksofnaturalcatastrophelosses
andinterestrates
Shareholder return
Raiselevelofshareholderdividend
Adjusttotheappropriatelevelofcapital
viaflexiblesharerepurchases,etc.
19Tokio Marine Holdings | Integrated Annual Report 2018
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Aligned Group Management
Withthecontinuingexpansionandglobalizationofthe
Group’sbusinesses,thechallengesfacingGroupman-
agementhavebecomebroaderbothwithinJapanand
overseasaswellasinthelifeandnon-lifeinsurance
businesses.
Toenhanceourabilitytocreatevalueoverthelong
term,itwillbeimportantto“maximizetheGroup’s
comprehensivecapabilities”through“furtherintegra-
tionandalignmentinGroupdecisionmaking,”andwe
needamechanismandstructuretosupportthese
efforts.WehaveintroducedGroupChiefOfficerposi-
tionsandstrengthenedthefunctionsofourcommit-
teesinordertoutilizetheexpertiseandstrengthsof
Groupcompaniesworldwideasaunifiedwholeand
ensurethatweachievealignedGroupmanagement.
TheGroupChiefOfficersystemwasintroducedto
aligntheGroup’sstrategiesandpoliciesinspecific
areasworldwideunderclearleadership.Thisstructure
willenableustodeployfunctionslaterallyacrossthe
Group.FollowingourreorganizationinApril2016,
reformswereinstitutedtoglobalizethesystemfurther
byappointingtheDelphiCOOasGroupCo-CIOand
theTMHCCCEOasGroupCo-CRSO.Additionally,two
newGroupChiefOfficerpositionswerecreatedto
bolsterthestructure:aGroupCISOtooverseecyber-
securitymanagement,andaGroupCCOtopromote
andspreadcommonvaluesacrosstheGroup.
Variouscommitteesareinplacetodiscussmanage-
mentchallengeslaterallyacrosstheGroupandorgani-
callyutilizetheexpertiseandknow-howofGroup
companiesworldwide.Regardingriskmanagement,
assetmanagementstrategyandotherissuescom-
monlymanagedGroupwide,thecommitteesfacilitate
discussionsamongGroupChiefOfficersandexecutive
managementofGroupcompaniestoensurethatopti-
maldecisionsaremade.
WecontinuetopromoteaGrouphumanresource
developmentstrategyforourdiversetalent.Regarding
specializedareassuchasactuarialsciencesand
digitalstrategies,weactivelyutilizetheexpertiseof
non-JapanesetalentwithintheGroupandspecialized
talentoutsidetheGroup.
Throughtheseandotherinitiatives,weareglobal-
izingandstrengtheningourcorporatefunctionsand
unleashingtheGroup’scomprehensivecapabilities
throughsynergy.
1 2 3
4 5
Charles Franks
ExecutiveOfficer,
TokioMarineKilnGroupCEO
Christopher J.B. Williams
ExecutiveOfficer,GroupCo-CRSO,
TMHCCCEO
Robert D. O’Leary
ExecutiveOfficer,
PhiladelphiaPresident&CEO
32
5
1
4 Ian Brimecome
SeniorManagingExecutiveOfficer
Donald A. Sherman
ManagingExecutiveOfficer,
GroupCo-CIO,
DelphiPresident&COO
20 Tokio Marine Holdings | Integrated Annual Report 2018
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Committee Structure
Committee Maindiscussiontopics
ERMCommittee Strategies,policies,andoperationalstructurerelatedtoGroupERM,etc.
IEC（InternationalExecutiveCommittee）Strategiesandpoliciesrelatedtointernationalinsurancebusinessand
M&AoutsideJapan,etc.
GRSC（GlobalRetentionStrategyCommittee）StrategiesandpoliciesrelatedtoGroupinsuranceunderwritingand
retentionreinsurance,etc.
GISC（GlobalInvestmentStrategyCommittee）Groupassetmanagementstrategiesandpolicies,financialbusiness
strategies,etc.
GITC（GlobalInformationTechnologyCommittee） GroupITstrategiesandpolicies,informationsecurity,etc.
Globalization and StrengtheningMaximize the Group’s Comprehensive
Capabilities
Create synergies and
share best practice across
the Group
Share knowledge to solve
issues across the Group
Involve overseas talent in
the Group management
Committees
Top management
both in Japan and
overseas discuss
various Group
management
issues
Major
Management
Issues
Risk
management
International
insurance
business
Asset
management
Retention
strategy
Information
technology,etc.
Group Chief Officers
Chief Officer Area of Oversight Name
CEOGroupChiefExecutive
OfficerTsuyoshiNagano
President
CCOGroupChiefCulture
Officer
CFOGroupChiefFinancial
Officer
TakayukiYuasa
SeniorManaging
Director
CROGroupChiefRisk
Officer
KunihikoFujii
ExecutiveVicePresident
CSSOGroupChiefStrategy
andSynergyOfficer MakotoOkada
SeniorManaging
DirectorCDOGroupChiefDigital
Officer
CRSOGroupChief
RetentionStrategy
Officer
ShingoKawaguchi
ManagingExecutive
Officer
Co-CRSOGroupCo-Chief
RetentionStrategy
Officer
ChristopherJ.B.Williams
ExecutiveOfficer
CIOGroupChief
InvestmentOfficer
HirokazuFujita
SeniorManaging
Director
Co-CIOGroupCo-Chief
InvestmentOfficer
DonaldA.Sherman
ManagingExecutive
Officer
CHROGroupChiefHuman
ResourcesOfficer
KazuhikoNakamura
ManagingExecutive
Officer
CITOGroupChief
Information
TechnologyOfficerShigeruInaba
ManagingExecutive
OfficerCISO
GroupChief
InformationSecurity
Officer
Do
me
stic
No
n-life
Do
me
stic
Life
Inte
rna
tion
al
Insu
ran
ce
Fin
an
cia
l an
d
Ge
ne
ral
Major initiatives to globalize and strengthen integration and alignment in Group decision making
April 2016 IntroductionofGroupChiefOfficersystem
Strengtheningofexistingcommittees(ERMCommittee,IEC,GISC)throughparticipationoftopmanagementofGroup
companiesoutsideJapan,etc.
Establishmentofnewcommittees(GRSC,GITC)
June 2016 AppointmentofDonaldA.Sherman,COOofNorthAmericancompanyDelphi,toGroupCo-CIOandCo-ChairmanofGISC
April 2017 EstablishmentofGroupCISOtooverseeGroupcybersecuritymanagement
EstablishmentofGroupCSSOtooverseeGroupmedium-to-long-termstrategiesandthecreationofGroupsynergies
June 2017 AppointmentofChristopherJ.B.Williams,CEOofNorthAmericancompanyTMHCC,toGroupCo-CRSOand
Co-ChairmanofGRSC
EstablishmentofGroupCCOtopromoteandspreadcommonGroupvalue
April 2018 EstablishmentofGroupCDOtooverseeGroupdigitalstrategies
21Tokio Marine Holdings | Integrated Annual Report 2018
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Tokio Marine Group’s Enterprise Risk Management Framework
TherangeofrisksfacedbyTokioMarineGroupare
growingevermorediverseandcomplicatedaswe
developourbusinessgloballyandthebusinessenvi-
ronmentchanges.Moreover,thehighlyopaqueand
drasticallychangingpolitical,economic,andsocial
trendsurgeustokeepavigilanteyeoutandalways
preparefornewrisks,includinggeopoliticalrisk.
Fromthisperspective,itisimportantforTokio
MarineGrouptogobeyondconventionalriskmanage-
mentwhichonlyaimsatpreventingandmitigating
risks,byfurtherstrengtheningitsEnterpriseRisk
Management(ERM)framework.Thisframeworkentails
thequantitativeandqualitativemonitoringofrisksto
effectivelycontrolcapital,risks,andreturnsGroupwide.
Qualitative Risk Management
Inqualitativeriskmanagement,wehaveaprocessto
comprehensivelyassessandreporteverykindofrisk,
includingemergingrisksthatresultfromchangesin
ourbusinessenvironment.TherisksfacedbytheGroup
arediscussedwithtopmanagementwhennecessary.
Furthermore,throughthisprocessweassessnot
onlyquantitativeelementsoftherisksidentified,such
aseconomiclossandfrequency,butalsoqualitative
elementssuchasbusinesscontinuityandreputation.
Thoserisksthatseriouslyimpactthefinancial
soundness,businesscontinuity,andotheraspects
ofTokioMarineGroupareidentifiedas“materialrisks”
(seetableonpage23).
Weevaluatecapitaladequacyinrelationtomaterial
risksthroughthequantitativeriskmanagementpro-
cessthatwillbeexplainedinthenextsection.Wealso
managetheserisksthrougha“plan-do-check-act
(PDCA)”cyclebyformulatingpreventiveplansand
countermeasures.
Message from Group CRO
Tokio Marine Group is strengthening its
ERM framework to address the ever more
diverse and complicated risks it faces as
it develops its global business.
Kunihiko FujiiExecutiveVicePresident
GroupCRO(GroupChiefRiskOfficer)
Determination and execution of capital allocation
plan based on business plans
Quantitative risk management
Qualitative risk management
Verification
ofcapital/
fundadequacy
Risk
quantification
Identificationof
emergingrisks
Riskcapital
monitoring
Managementof
materialrisks
Stresstests
Identification
ofmaterialrisks
22 Tokio Marine Holdings | Integrated Annual Report 2018
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Quantitative Risk Management
Inquantitativeriskmanagement,TokioMarineGroup
aimstomaintainitssolidcreditratingsandprevent
defaultsbyverifyingifthecapitalissufficientrelativeto
risksthroughmultifacetedverification.
Specifically,wequantifypotentiallosses,riskcapital,
thatcouldarisefromrisksrelatedtobusinessplans
submittedbyGroupcompanies.Forthisquantification,
weuseastatisticalmeasurecalled“ValueatRisk(VaR)”
ona99.95%confidencelevel,whichcorrespondstoan
AAcreditrating.Bycomparingthisriskcapitaltonet
assetvalue,*weverifycapitaladequacy.
AsofMarch31,2018,netassetvalueatTokio
MarineGroupwas5.1trillionyenandriskcapitalwas
2.5trillionyen.Asaresult,theeconomicsolvencyratio,
whichrepresentstheratioofnetassetvaluetorisk
capital,was201%,indicatingasufficientlevelofcapital.
Theresultsoftheseverificationsaswellasthefind-
ingsofriskcapitalmonitoring,riskprofiles,andother
informationarereportedtotheBoardofDirectors
twiceayear.
Furthermore,weconductstressteststocomple-
menttheaforementionedcapitaladequacy
verifications.
Stresstestsutilizescenariosassumingrisksthat,
althoughhavingalowfrequencyofoccurrence,could
massivelyimpacttheGroupwhentheyoccur,suchas
majornaturalcatastrophesoraturmoilinfinancial
markets.
*Netassetvalue:Consolidatednetassetonafinancialaccountingbasis
+Catastrophelossreserves,pricefluctuationreserves,
valueoflifeinsurancepoliciesin-force,etc.
–Planneddistributiontoshareholders,goodwill,etc.
Initiatives to Strengthen ERM Framework
TokioMarineGroupaimstoachieveongoingincreases
incorporatevaluewhilemaintainingthebalance
betweenfinancialsoundnessandprofitabilitythrough
theaforementionedERMframework.Toensureappro-
priateresponsestotheevermorediverseandcompli-
catedrangeofrisksweface,wewillcontinueinitiatives
tostrengthenourERMframework.
Underthepreviousmid-termbusinessplan,we
developedasystemwithwhichwecancollecttimely
andhighlyreliableriskinformationtomakemore
accuratemanagementdecisions.Inaddition,we
appointedexecutivesatmajoroverseasgroupcom-
paniestoserveasmembersofourERMCommittee
inordertoincorporatetheirglobalinsightasthecom-
mitteediscussesthevariousmanagementissues
surroundingTokioMarineGroup.Wealsoselected
individualsatoverseasgroupcompanieswithhigh
expertiseinriskmanagementtobepromotedto
positionsatTokioMarineHoldings.
Thenewmid-termbusinessplan—“ToBeaGood
Company2020”—whichbeganwithfiscalyear2018,
entails“consistentlymaintainingdouble-digitROEand
generatinghighlevelshareholderreturn.”Seekingto
accomplishtheseobjectives,wewillcontinueto
strengthenourERMframework,enhanceourintel-
ligencefunction,anddevelopourhumanresources.
EffortstostrengthenourERMframeworkwill
includerefiningcorporategovernanceatdomesticand
overseasgroupcompanies,andrealizingmoresophis-
ticatedmanagementofourGroupcapitalandfunds.In
addition,wewillcontinueengagingindiscussion
regardingriskstrategies(riskappetitebyriskcategory/
businessunit)basedontheavailablecapitalandrisks
weface.Theenhancementofourintelligencefunction
willbepursuedthroughimprovementstostructures
formonitoring,analyzing,andreportingonnatural
catastrophesandotherexistingriskcategoriesaswell
asnewrisks,suchascyberrisks.Thedevelopmentof
humanresourceswillbecarriedoutunderourcore
identity“ToBeaGoodCompany.”Wewillstrivetoculti-
vateariskculturethatcontributestotheintegration
andalignmentofourGroupmanagement,andcon-
tinuousandsystematicdevelopmentofexpertsinthe
fieldofERM.
Material Risks (FY2018) 1. Globalfinancialcrisis
2. Japanesegovernmentbondrisk
3. Japanwindandflood
4. Japanearthquake
(includingMt.Fujieruption)
5. Largeinternationalnaturalcatastrophe
6. Cyberrisk
7. Industrystructurechangesfromdisruptivenew
technologies
8. Conductrisk*
9. Breachesofoverseasregulations
10. Terrorism/Riot
11. Pandemic
*Riskofdamagetocorporatevalueasaresultofmisconduct,inappropriateresponseorgapbetweenindustry/companypracticeandcommonsense,
whichnegativelyimpacttheprotectionofcustomerrights,marketintegrity,effectivecompetition,thepublicinterest,etc.
Economic
Solvency Ratio
AsofMarch31,2018
Net asset value
¥5.1 trillionRisk capital
¥2.5 trillion
201%
23Tokio Marine Holdings | Integrated Annual Report 2018
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Message from Group CSSO and Group CDO
Tokio Marine Group is committed to transforming
the rapid changes to the business environment,
the result of technological advances, into its
own strengths. At the same time, we will strive
to utilize the strengths of all Group companies
to pursue synergies.
Makoto OkadaSeniorManagingDirector
GroupCSSO(GroupChiefStrategyandSynergyOfficer)
GroupCDO(GroupChiefDigitalOfficer)
Group-Level Initiatives of Medium-to-Long-Term Strategies
TokioMarineGroupisexperiencinganunprecedented
rateofchangeinthebusinessenvironmentandcompeti-
tiveenvironment,andthispaceisonlygettingfaster.
Demographicandotherchangestosocietyaswell
astechnologicalprogress,includingtheevolutionof
autonomousdriving,havethepotentialtosignificantly
impacttheinsurancebusinessinthefuture.
Suchchangestothebusinessenvironmentcanbe
seenasthreatstoTokioMarineGroup,buttheycan
alsobeviewedasnewbusinessopportunities.
Choosingtoadoptthelatterperspective,wewill
pursuesustainablegrowthbytakingpreemptiveaction
invariousnewinitiatives.
ThiscommitmentledtheCompanytoestablish
thepositionofGroupChiefStrategyandSynergy
Officer(GroupCSSO)inApril2017.GroupCSSOis
responsibleforoverseeingtheGroup’smedium-to-
long-termstrategiesandcreatingGroupsynergies.
Iamthereforechargedwiththefollowingtasks.
Firstofall,GroupCSSOmustformulateamedium-
to-long-termvisionfortheGroupbasedonitsbusiness
environmentandthecompetitiveclimate,thenclarify
themanagementissuesthatneedtobeaddressedin
ordertorealizethatvision.Afteridentifyingtheissues,
Iwilltakepreemptivemeasuresinresponse.
Mysecondtaskistofacilitatethesustainablegrowth
ofTokioMarineGroupbyenhancingsurveyand
researchfunctions,whicharebecomingincreasingly
importantintheuncertainbusinessenvironment.
MythirdtaskistoutilizethestrengthsoftheGroup,
namelyitsglobalnetworkandthespecializedexpertise
ofGroupcompanies,toacceleratethecreationof
synergiesinrelationto“revenue,”whichrepresents
ourgrowth;“investment,”namelyassetmanagement;
”capital”;and”cost.”
WithaneyetoimprovevalueacrosstheGroup,Iwill
worktorealizegreatersynergiesonaglobalscale
whileapplyingbestpracticestoenhancelocalmanage-
ment.Throughtheseefforts,IwillhelpTokioMarine
Groupmoveforwardwiththe“strengtheningofaligned
Groupmanagement,”aprioritydescribedinthemid-
termbusinessplan.
24 Tokio Marine Holdings | Integrated Annual Report 2018
Page 18
Advance
Initiatives to Date Direction of Future Initiatives
Full Utilization of Digital Technologies to Create New Value
InApril2018,thepositionofGroupChiefDigitalOfficer
(GroupCDO)wasestablishedtooverseetheGroup’s
digitalstrategies.GroupCDOistaskedwithdeploying
digitalstrategiesonaglobalbasisandtherebyboost-
ingtheGroup’scompetitiveness.
Inthistask,Iadoptthefollowingthreeperspectives.
Thefirstperspectiveisthefullutilizationoftechnol-
ogytocontinuecreatingnewvalue.Bytakingadvan-
tageofcutting-edgedigitalandothertechnologies,we
willdelivervaluethroughinsuranceinnewfieldsas
wellasinfieldswherewehavebeenunabletoprovide
insuranceproductsandservicesinthepast.Inaddition,
Ihopetoexpandtheveryconceptofinsuranceby
broadeningthescopeofvalueweprovidebeyond
preparingforaccidentstoincludepreventing,quickly
recoveringfrom,andavoidingtherecurrenceof
accidents.
Thesecondperspectiveistheuseoftechnologiesto
realizealeanmanagementstructurebycreating
simpleyetswiftbusinessprocesses.
Thethirdperspectiveistheimplementationof
pioneeringinitiativestoprepareforthepotential
appearanceofdisruptivetechnologies.
Tothisend,IwillpromoteaGroupdigitalstrategy
focusedoncreatingdigitalsynergiesonaglobalscale
byacceleratingProofofConceptinourhomemarketof
JapanandsteppinguptrialsinJapanaswellasin
Europe,theUnitedStates,andAsia.
Expanding Group Synergies
Pursuing synergies by leveraging the Group’s global network, the expertise of each Group company, and financial
strengths, etc.
Initiatives to Date and Direction of Future Initiatives
Innovative Products
and Services
Improvement of
Productivity
Products / Services
Marketing
Underwriting Claims Services
Business Environment
ChangesTechnologies
Drive Agent Personal Simplification and acceleration
of insurance payment
processes with blockchain
Populationdecline
Increaseinnaturalcatastrophe
risks
Expansionofsharingeconomy
Increaseininboundtouriststo
Japan
etc.
IoT,AI,andbigdata
Sensingtechnology
Blockchaintechnology
Robotics
etc.
Blockchain
Insurance
company
Customer
HospitalAruku Hoken
Expand revenue synergies
by leveraging our global network
Increase investment income making
the most of Delphi’s asset management
capabilities, etc.
Optimize retention/
reinsurance on a Group basis
Reduce costs by both efficiently
using Group resources and taking
advantage of the Group’s scale
Revenue Investment
Capital Cost
Expanding Group Synergies
Annual results: USD210 million
Contributiononapost-taxbasis
onDecember31,2017
25Tokio Marine Holdings | Integrated Annual Report 2018
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Message from Group CRSO and Group Co-CRSO
Aspire to Maintain Management Soundness, While Achieving Sustainable Growth
and Improvements in Capital Efficiency of the Group
AtTokioMarineGroup,weaspiretofurnishswiftand
accurateresponsestoinsuranceneeds,whichdiffer
bycountryandregion.Forthisreason,localGroup
companies—theGroupmembersthataremostfamiliar
tocustomers—aregivenacertaindegreeofdiscretion
andauthoritytoexerciseautonomyintheirbusinesses.
Wefeelstronglythatallowingthesecompaniestomake
themostappropriatedecisionswithregardtounder-
writing,retention,andreinsurance*attheirowndiscretion
willenablethemtoefficientlyadapttothecharacteristics
ofthemarketandunderwritingrisksoftheircountries,
whichwillinturncontributetoincreasedlocal
competitiveness.
Atthesametime,werecognizethat,fromtheper-
spectiveofGroup-basedoptimization,theabilitytoact
inanintegrated,Group-basedmannercancontributeto
greaterearnings.Retentionandreinsurancestrategyis
anareainwhichsuchanintegrated,Group-based
approachisviable.
WebelieveappropriatecontroloftheGroup’sunder-
writingrisks,monitoringandmanagingGroup’saccu-
mulation,andalignedcooperationofretentionand
outwardreinsurancebetweenGroupcompaniesareall
becomingcrucialintheglobalmanagementofan
insurancebusiness.
GroupCRSOandGroupCo-CRSOarechargedwith
themissionofmaintainingmanagementsoundness,
facilitatingsustainablegrowth,andimprovingcapital
efficiencyforTokioMarineGroup.Thismissionistobe
accomplishedbyappropriatelycontrollingunderwriting
risksandoptimizingretentionandreinsuranceona
Groupbasis,allwhilerespectingtheautonomyof
Groupcompanies.MeetingsoftheGlobalRetention
StrategyCommittee(GRSC)areperiodicallyconvened
tohelpfulfillthismission.AttheGRSC,representatives
fromGroupcompanieswithexpertiseregardingunder-
writing,retention,andreinsuranceareassembledto
discussissuesrelatingtotheseareas,shareinformation,
alignunderstandings,andseekresolutionstoissueson
aGroupbasis.Wewillnowdiscusssomeofourspecific
activities.
*Insurancetransactionsbetweeninsurancecompaniesarereferredtoas
“reinsurance.”Theportionofunderwrittenriskremainingwithinan
insurancecompanyafterreinsuranceisreferredtoas“retention.”
Appropriate Control of Underwriting Risks and Optimization of Retention
and Reinsurance
TokioMarineGroupworkstoappropriatelycontrol
underwritingrisksonaGroupbasis.Forexample,we
haveselectedthreeunderwritingriskswiththepoten-
tialtosignificantlyimpactearningsandcapital:Japan
WindandFlood,JapanEarthquake,andU.S.Hurricane.
Groupretentionstrategieshavebeensetwithregardto
eachoftheserisks.
Webaseourretentionstrategiesontheprinciplesof
avoidingsurprisesforstakeholders,issuingstabledivi-
dends,andimprovingcapitalefficiency,andaimto
optimizeretentionlevelsconsideringoverallcircum-
stancessuchasmarketconditions.Thesestrategiesare
reflectedinthebusinessplansofdomesticandinterna-
tionalGroupcompanies.
Tokio Marine Group aspires to maintain
management soundness while
achieving sustainable growth and
improvements in capital efficiency
through appropriate control of
underwriting risks and optimization
of retention and reinsurance
on a Group basis.Shingo KawaguchiManagingExecutiveOfficer
GroupCRSO
(GroupChiefRetentionStrategyOfficer)
Christopher J.B. WilliamsExecutiveOfficer
GroupCo-CRSO
(GroupCo-ChiefRetentionStrategyOfficer)
26 Tokio Marine Holdings | Integrated Annual Report 2018
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Forunderwritingrisksotherthantheaforemen-
tionedthree,weidentifythoseriskswiththepotential
toaccumulateonaGroupbasisandthosethatmay
significantlyimpactmanagementasaresultoffuture
changesinsocialtrends.Theriskamountsassociated
withtheserisksaremonitoredregularly.Forexample,
wehaveframeworksinplacetoquantifyandmonitor
cyberrisksandpandemicrisksamongothers,andthen
controltheriskamountsoftheserisksappropriately.
Furthermore,westrivetooptimizeretention
andreinsuranceonaGroupbasis.Forexample,
Group-basedreinsurancestrategiesaresetwhere
TokioMarine&NichidoFireisdesignatedastheGroup
RetentionVehiclefornaturalcatastropherisks,and
whileacertainportionofallnaturalcatastropherisks
assumedbydomesticandinternationalGroupcompa-
niesiscentralizedtoTokioMarine&NichidoFire
throughintra-Groupreinsurance,risksthatexceedthe
retentionleveldeemedappropriateonaGroupbasis
arecollectivelytransferredtoexternalreinsurancemar-
kets.Weexpectcollectiverisktransfertoleverageecon-
omiesofscaleandloweroutwardreinsurancecosts.
Group as One to Address Issue Resolution
TheGRSCisameetingforregular,Group-leveldiscus-
sionregardingmanagementissuespertainingtounder-
writing,retention,andreinsurance.Thiscommitteeis
chairedjointlybyGroupCRSOandGroupCo-CRSOand
hasfull-timemembersincludingGroupCFO,Group
CRO,HeadofInternationalInsuranceBusiness,and
GroupCSSO.Membersofmanagementfromdomestic
andinternationalGroupcompaniesarealsoinvitedto
joininmeetingsoftheGRSCwhentheirexpertiseis
relevanttothethemebeingdiscussed.Meetingpartici-
pantsaspiretotranscendtheirpositionintheirindi-
vidualcompanyinordertooffersuggestionsfroma
Group-basedmanagementviewpointandthereby
contributetoresolutionoftheissueathand.
TherangeofthemesdiscussedattheGRSCtodate
arevaried,withsomeexamplesincludingtheselection
ofunderwritingriskstobecontrolledonaGroupbasis;
GroupretentionstrategiespertainingtoJapanWindand
Flood,JapanEarthquake,andU.S.hurricane;methodsof
monitoringriskamountsassociatedwithemergingrisks,
suchascyberrisksandpandemicrisks;andintra-Group
reinsurance.TheresultsofdiscussionsattheGRSCare
usedtomakethebestpossibleGroupmanagement
decisions.Inaddition,theinformationsharedatcom-
mitteemeetingsisrelayedthroughouttheGrouptobe
usedasareferencebythemanagementofGroupcom-
paniesaroundtheworld.
Japan Wind and Flood Risk Amounts
(Riskcapital)
0 50 100 150 200 250 300 Returnperiod*
(years)
*Theexpectedperiodfromonephenomenon(heavyrain,typhoon,earthquake,etc.)totherecurrenceofthesamephenomenon.
Forexample,anearthquakewithareturnperiodof100yearswouldbeanearthquakeofascalethatisthoughttoonlyoccuronceevery100years.
Beforereinsurance
Afterreinsurance
27Tokio Marine Holdings | Integrated Annual Report 2018
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As a global insurance group,
we strive to further enhance
our investment capability
and expertise to support
our sustainable growth
in the future.
Hirokazu FujitaSeniorManagingDirector
GroupCIO
(GroupChiefInvestmentOfficer)
Donald A. ShermanManagingExecutiveOfficer
GroupCo-CIO
(GroupCo-ChiefInvestmentOfficer)
Message from Group CIO and Group Co-CIO
Group Investment Policies and Initiatives for Improving Medium-to-Long-Term Profitability
ThebasicprincipleofTokioMarineGroup’sinvestment
policyistoensurefutureclaimpaymentsthroughappro-
priatemanagementofourportfolio(whichconsistsof
theinsurancepremiumsreceivedfromourcustomers).
Inpractice,wemanageourportfolioandcontrolits
riskbasedonanassetliabilitymanagement(ALM)frame-
worksothatourassetsareinvestedappropriatelyin
accordancewiththecharacteristicsofourliabilities.
PresentlyourGroup’sinsuranceoperationsare
well-diversifiedonaglobalscale,andeachofthese
operations—thedomesticnon-lifeinsurancebusiness,
thedomesticlifeinsurancebusiness,andtheinterna-
tionalinsurancebusiness—accountsforroughlyone-third
ofourassetportfolio.Theseassetsaremanagedprimarily
throughtheALMframework,buttheyarefurtherdiversi-
fiedgloballyinordertoachievestableandsustainable
growthofinvestmentreturnonaGroupwidebasis.
Underthecurrentmid-termbusinessplan,which
startedinApril2018,wewillcontinuetofurtherdevelop
ourinvestmentinfrastructureandenhanceourtalent
poolforinvestmentactivities.Utilizingtheseresources,
weaimtosteadilyaccumulateforeignassetsaswellas
alternativeinvestmentstorealizemoreoptimal
Groupwideassetallocationsoverthemedium-to-long
term,whilealsoflexiblymanagingourportfolioaccord-
ingtothefluctuationsofglobalfinancialmarkets.
Inaddition,wecontinuouslyreduceourbusiness-
relatedequityportfolioinordertoimprovetheGroup’s
capitalefficiency.AsofMarch31,2018,thebookvalueof
business-relatedequitieswasreducedto40%compared
withthatasofMarch31,2002.Underthecurrentmid-
termbusinessplan,wewillfurthersellsuchholdingsby
atleast100billionyenperyear.
Domesticbonds
¥8.7 trillion
（38.0%）
Domesticnon-life
Approx. 35%
Domestic
equities
¥2.6 trillion
（11.7%）
Domesticlife
Approx. 31% Foreignsecurities
¥5.0 trillion
（21.8%）
Monetary
receivablesbought
¥1.2 trillion
（5.5%）
Othersecurities
¥0.2 trillion
（0.9%）
Loans
¥1.0 trillion
（4.4%）
Others
¥3.3 trillion
（14.4%）
Cashanddeposits
¥0.7 trillion
（3.2%）International
insurance
Approx. 33%
FinancialandGeneral
By Asset TypeBy Segment
Allocation of Total Assets
(TotalassetsasofMarch31,2018:22.9trillionyen)
28 Tokio Marine Holdings | Integrated Annual Report 2018
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Investment Capability as a Global Insurance Group
TokioMarineGroup’sinvestmentstrategiesaresetby
GroupCIOandGroupCo-CIO,andareexecutedby
Groupcompaniesthroughclosecollaborationwith
TokioMarineHoldings.ThisGroupCIO/GroupCo-CIO
structureenablesTokioMarineGrouptomakequick
andappropriatedecisionsregardinggroup-wide
investmentstrategyaswellasindividualgroupcom-
pany’sinvestmentchallenges.
TokioMarineHoldingshasestablishedtheGlobal
InvestmentStrategyCommittee(GISC),whichisjointly
chairedbyGroupCIOandGroupCo-CIOandconsistsof
executiveofficersresponsibleforinvestmentactivities
ofdomesticandinternationalGroupcompanies.Inthe
GISC,theglobalmacroeconomicclimateandfinancial
marketsarereviewedtoenableGroupCIOandGroup
Co-CIOtodeveloptheGroupinvestmentstrategy.
WithGroupCIOandCo-CIOinitiatives,ourdomestic
insurancecompanies’investmentfunctionshavebeen
integratedasmuchaspossibletoefficientlyenhance
theirinvestmentcapabilities.Also,theportfolioman-
agementoftheirU.S.dollar-denominatedassetsis
entrustedtoourU.S.subsidiary,DelphiFinancialGroup,
Inc.,whichhasprofoundinvestmentexpertise.
Investmentteamsatdomesticinsurancecompanies
andDelphiconstantlycommunicateandexchange
marketinformationandinvestmentideastoimprove
groupcooperation.Throughthisweareconducting
theGroup’sinvestmentactivitiesasifallofourinvest-
mentprofessionalsaremembersof“oneteam”and
successfullymitigatingthenegativeimpactfromthe
recentlowinterestrateenvironmentonourgroup
investmentyield.
Throughourgroupcooperationandcollaboration,
wewillcontinuouslystrivetofurtherenhanceour
investmentcapabilityandexpertisetosupportour
sustainablegrowthinthefuture.
1.6% 1.6% 1.5% 1.5%1.4%
4.0%4.3%
2014 2015 2016 20172013
4.4%
2.1%2.3% 2.2% 2.3% 2.3%
4.5% 4.6%
Entrustment of Investment Management to Delphi
（TotalamountentrustedasofMarch31,2018isapprox.USD7.7billion)
Group Income Yield
Domestic
Overseas
Total
Domestic Subsidiaries
TokioMarine&Nichido
TokioMarine&NichidoLifeInsurance
Overseas Subsidiaries
Philadelphia
TokioMillenniumReAG
TMHCC
USD
3.7billion
USD
4.0billion
A member of the Tokio Marine Group
29Tokio Marine Holdings | Integrated Annual Report 2018
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Message from Group CHRO
Driving Force for Realizing to be a “Good Company”
TokioMarineGroupbelievesthepowerofitspeopleis
thedrivingforceforrealizingitsvisionofbeinga“Good
Company.”Fortheinsurancebusiness,whichissaidto
bea“people’sbusiness,”thepeopleinvolvedandthe
trustcreatedbythosepeoplearethesourceofits
competitiveadvantage.Wewillpromotediversityon
aglobalbasistofacilitatetheactiveparticipationof
around40,000employeesworldwideandstrengthen
ourcompetitiveadvantage.
TokioMarineGrouphasarrangeditsbasicpolicies
withregardtohumanresourcesintoastatement
knownas“TokioMarineGroup—OurPeople.”This
statementwastheproductofdiscussionattheGlobal
HumanResourcesCommittee,whichseesparticipation
byhumanresourcesrepresentativesfromoverseas
Groupcompanies.Inthisstatementweexplainthatour
peopleareourmostimportantassetandakeydriver
fortherealizationofourvisionofbeinga“Good
Company.”Basedonthisbelief,weareinspiredto
provideopportunitiesforcareerdevelopmentand
ongoingpersonalgrowth,toattractandretainthebest
talent,andtoseektoembodydiversityandrealize
inclusion.“TokioMarineGroup—OurPeople”willform
thefoundationforourhumanresourcesmeasures
goingforward.Thesystematiccultivationofourdiverse
talent,bothinJapanandoverseas,willbeimportantto
accomplishingourgoalofbecomingaglobalinsur-
ancegroup.Forthisreason,thenewmid-termbusiness
planputsforthfourpillarsforhumanresourcedevelop-
ment:(1)developgloballeaders;(2)securehuman
resourcesforcorporatefunctions;(3)expandthebase
oftheglobaltalentpool;and(4)fosteraGroupwide
cultureofdevelopinghumanresources.Variousefforts
arebeingimplementedbasedonthesepillars.
Tokio Marine Group — Our People
OurpeoplearethemostimportantassetofourGroupandakeydriverofourGoodCompanyvision.Weaimtoattractandretainthebesttalentineveryaspectofourbusinesstoensurewedeliversafetyandsecuritytoourcustomersandtheircommunities.
Ourpeoplebringpassionandachallengingspirittotheirendeavorsandweprovidethemwithopportunitiesforcareerdevelopmentandongoingpersonalgrowth.
Ourpeopleembodydiversityandwevalueinclusionasatrulyglobalcompany.Weworkhardtocreateabusinessenvironmentwherewecanachieveourfullpotentialaswecontinueourendlessjourney
tobeaGoodCompany.
We will promote diversity on a global basis
to facilitate the active participation of our
40,000 employees worldwide and
strengthen our competitive advantage.
Kazuhiko NakamuraManagingExecutiveOfficer
GroupCHRO(GroupChiefHumanResourcesOfficer)
30 Tokio Marine Holdings | Integrated Annual Report 2018
Page 24
Forexample,wearedevelopinggloballeaders
throughprogramsbasedoncareerdevelopmentplans.
Also,weareworkingtorecruitindividualswithexperi-
enceindigitalfieldsfromoutsideoftheGroupfor
corporatefunctionswhileseekingoutwaystobetter
utilizetheinsightofoverseasGroupcompaniesin
reinforcingthefunctionsofTokioMarineHoldings.
Toexpandthebaseoftheglobaltalentpool,weare
implementingtrainingprogramsforemployeesatall
levels.Someoftheseprogramsincludeshort-term
assignmentsofneweremployeesinJapantooverseas
locations.
TokioMarineGrouphasalsoestablished“OurEight,”
asetofeightbasicprinciplesmeanttoguidethe
actionsofemployeesandtherebyensurethatweare
alwaysabletoliveuptotheexpectationsofcustomers,
society,andourshareholders.OurEightwillserveasa
constantinourdailyactivitiesthatemployeescan
alwaysusetoreflectontheirownbehaviorwhilealso
functioningasatoolforon-the-jobtraining.
Our Eight
Eight Basic Principles for Tokio Marine Group
1.BeRespectful
2.BeHonest(Don’tAvoidToughIssues)
3.BeInterestedinOthers
4.PutYourselfintheOther’sShoes
5.HaveOwnership
6.ActwithaSenseofPurpose
7.ChallengewithoutHesitation
8.ExceedSomeone’sExpectation
ItistheGroup’svision“ToBeaGoodCompany”that
unitesusasagroup.Accordingly,initiativesforsharing
thevisionandourcorevaluesthroughouttheGroup
areofkeyimportance.EachcompanyofTokioMarine
Groupdevelopsitsbusinessbycapitalizingonits
strengths.Wethereforerecognizethatitiscrucialforus
tobeabletoworkundertheguidanceofasharedcore
visionthatisconsistentthroughouttheGroupinboth
ourdomesticandourinternationalcompanies.The
Groupvision“ToBeaGoodCompany”wasbornoutof
thisrecognition.Forthisreason,weareimplementing
variousinitiativesonanongoingbasiswiththeaimof
cultivatingunderstandingaroundthisvisionamongall
employeesandinspiringthemtobasetheiractions
uponit.Thetownhallmeetingsthatcontinuetobe
heldaroundtheworldtodiscussthisthemearejust
oneoftheseinitiatives.Inaddition,weadministereda
cultureandvaluessurveytoallGroupemployees
acrosstheglobeinJuly2017.Thissurveywasmeantto
helpusbetterunderstandthetruefeelingofthose
individualsworkingfortheGroup.Wehopetocontinue
suchsurveysinthefuture,andwewillcontinueto
implementmeasurestoaddressanyissuestheyreveal.
Aswemoveforwardandtacklethechallengesthat
come,wewillremainunitedunderourvision“ToBea
GoodCompany.”
Four Key Stages of Implementation
Fosteringoftrue
understandingofour
GoodCompanyvision
amongallemployees
worldwide
Abilitytoexplainvision
inownwordsto
colleagues,customers,
andmarkets
Exerciseofvision
throughactions
indailywork
Workingtorealize
thevision
1Identify
2Share
3Implement
4Improve
Entrench phase Goal
Townhallmeeting
31Tokio Marine Holdings | Integrated Annual Report 2018
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We will support the global initiatives
of Tokio Marine Group with
IT through both an assertive and
a defensive approach.
Shigeru InabaManagingExecutiveOfficer
GroupCITO(GroupChiefInformationTechnologyOfficer)
GroupCISO(GroupChiefInformationSecurityOfficer)
Message from Group CITO and Group CISO
Group IT Strategies
TokioMarineGroupaimstotransformITintoatrue
strengthformanagementthatcanbeutilizedinits
globaloperations.WewillsupporttheGroupbyhelping
reinforceITgovernanceatGroupcompaniesworldwide
andbyleveragingsynergiestochallengeissuesshared
amongGroupcompanies.
Tothisend,thenewmid-termbusinessplan,which
waskickedoffinfiscal2018,willseektostrengthen
theGroup’sITcapabilitiesintermsofbothassertive
anddefensiveaspectsbasedonfivepillars:(1)IT
Governance;(2)CostOptimization&Operational
Quality;(3)DigitalInnovation;(4)EnhancedGroup
Management;and(5)ITHR.
Inregardtopillar1,weseereinforcingITgover-
nanceasaresponsibilityofthemanagementofthe
Company.Giventhisunderstandings,wehavedefined
ITgovernancestandardsdetailingtherelationships
betweenITandbusinessdivisions,andalsodefined
processandimplementationsystemsforeverything
fromplanningtosystemdevelopmentandoperation.
Withthesestandardsinplace,weaimtosuccessfully
developsystemsforachievingbusinessstrategies
andtooperatesystemsinasafe,stable,andefficient
manner.DomesticandoverseasGroupcompanieshave
proceededtoclarifytheissuestheyfacebasedonthese
standardswhilecarryingoutanongoingcycleofevalu-
ationandimprovementactivities.Wehavebeenableto
furtherrefineourITgovernancethroughthiscycle.
BuildingsolidITgovernancesystemsisataskofutmost
importance,andwearethereforecommittedtocon-
tinuingtodevelopoursystemsgoingforward.
Overview of IT Governance at Tokio Marine Group
Vision
Systems that transform IT into a true strength for management that is utilized in the Group’s global operations
Successfuldevelopmentofsystemsfor
achievingbusinessstrategies
Operatingofsystemsinasafe,
stable,andefficientmanner
IT Development
planning,
Application
Ownership system
IT Steering
Committee
Project
management
Change
management
Information
security
management
System fault
management
Outsourcing
contractors
Disaster
Recovery
32 Tokio Marine Holdings | Integrated Annual Report 2018
Page 26
Initiatives for Generating Group-Level Synergies
TokioMarineHoldingshasestablishedtheGlobal
InformationTechnologyCommittee(GITC),whichis
composedofseniormanagersinvolvedwithIT-related
mattersfromJapanandoverseas,withthegoalofmore
flexiblyformulatingandimplementingglobalITstrate-
gies.Wehavealsosetupsubcommitteesunderthe
GITCtopromotestrategiesforaddressingsharedGroup
ITchallengesthatarerelatedtothemajorinitiativesof
themid-termbusinessplan.Theinsightofkeyoverseas
personnelisutilizedinthisundertaking.
Inregardtodigitalinnovation,ITdivisionscollabo-
ratewithbusinessdivisionstoformulateconcrete
strategieswhilesharingthelatestinsights.Thenext
digitalerawillrequirethatnewproductsandservices
beprovidedswiftlyandtomeetthisneed,weare
developinganopenITplatformthatisoptimizedfor
digitaltechnologiesinordertoallowforbotheffective
utilizationofinformationandcontactpointswith
customers.
Cybersecurity Initiatives
Cyberattacksgrowmoresophisticatedandmenacing
witheachcomingyear.TokioMarineGrouprecognizes
cybersecurityasoneofthemostcriticalmanagement
issues,andmanagementexercisesleadershipin
addressingthisissue.AsGroupCISO,Iamresponsible
foroverseeingcybersecuritymanagementacrossthe
entireGroup.
CyberrisksarenotmerelyITissues;buttheyarealso
seriousbusinessrisks.Basedonthisrecognition,Group
companiesimplementriskmanagementPDCAcycle
byperformingriskassessmentstomeasurethethreats
andpotentialimpactsofcyberattacksontheiropera-
tions,andthenecessarycountermeasures.
Intheeventofacyberattackagainstus,itisvitalto
beabletoenactaswiftinitialresponseforidentifying
thescopeofimpact,limitingthespreadofdamage,
andthentopromptlyimplementmeasuresforrestor-
ingtargetedsystemsandpreventingrecurrence.Based
ontheextentoftheimpact,itmaybeevennecessary
toescalatetoamanagement-levelresponse.Inother
words,cybersecuritymeasuresareimportantfroma
crisismanagementstandpoint,anditiscrucialto
alwayshaveinplacefunctionalsystemsforresponding
tocyberrisksateachGroupcompanyandona
Groupwidebasis.TokioMarineGrouphasassembleda
GroupComputerSecurityIncidentResponseTeam
(CSIRT),whichisresponsibleforpromotingtherein-
forcementofGroupwidecybersecurityriskandcrisis
managementsystemsandcoordinatinginformation
sharingamongGroupcompanies.Inaddition,wehave
frameworksinplacethatfacilitateGroup-levelresponse
shouldacyberriskmaterialize.
TokioMarineHoldingswasselectedbytheMinistryof
Economy,TradeandIndustryandtheTokyoStock
Exchangeforinclusioninthe2018CompetitiveIT
StrategyCompanyStockSelection,signifyingitasa
companythatproactivelyutilizesIT.Webelievethatthis
acknowledgmentwasareflectionofoureffortstouse
newtechnologiestoprovidecustomerswithproducts
andservicesofimpeccablequalityandtoseekout
securitytechnologiesforprotectingcustomers’
information.
Goingforward,wewillcontinuetosupportthebusi-
nessstrategiesofTokioMarineGroupcompanies
aroundtheworldandprovideITservicesthatcreate
highervaluetoourbusinesses.
Tokio Marine Group’s Global IT Promotion System
Executive Committee
Global Information Technology Committee
Subcommittees
Security ProjectSuccessGlobalITPlatform&
ProcurementDigitalInnovation
ITPersonnel
Development
33Tokio Marine Holdings | Integrated Annual Report 2018
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