ANNUAL REPORT. For the year ended March 31, THE KYOEI FIRE & MARINE INSURANCE Co., Ltd.

Transcription

1 ANNUAL REPORT For the year ended March 31, THE KYOEI FIRE & MARINE INSURANCE Co., Ltd.

2 Profile The Kyoei Fire & Marine Insurance Co., Ltd. (Kyoei Fire and Marine) has carved out a unique position in the Japanese non-life insurance market. Our Company stems from earlier cooperative organizations the predecessor of today s cooperative unions such as agricultural, fishery, consumer cooperatives and cooperative banks and we still enjoy a strong connection with these organizations today. The Company was founded on July 1, 1942, when the business operations of Daito Marine and Daifuku Marine were merged. The company name, utilizing the word Kyoei, was coined from the motto of The Central Union of Cooperative, which calls for sharing prosperity with a wide range of people. In 1946, the Company was restructured and became the first mutual non-life insurance company in Japan. At Kyoei Fire and Marine, we have endeavored to provide total satisfaction to our policyholders by aggressively developing new services and products, such as the savings-type insurance product, for which we became the first in the industry to introduce. Based on our management principles, in 1988 we joined ICMIF (International Cooperative and Mutual Insurance Federation), which is the independent insurance organization of ICA (International Cooperative Alliance), and engaged in activities as a member. In April 2003, we received capital mainly from cooperative unions and cooperative societies with Zenkyoren (the National Mutual Insurance Federation of Agricultural Cooperatives) at the head of the list and changed from a mutual company to a publicly held corporation. With this change, we clarified our characteristics and strengths as an insurance company based on relationships with cooperative unions and cooperative societies that we have maintained since the Company was founded, and strengthened our management foundation by forging even stronger relationships with these cooperative unions and cooperative societies, thereby inaugurating a new phase of opportunity as The Kyoei Fire & Marine Insurance Co., Ltd. Origin of the Corporate Emblem Our corporate emblem uses the same cherry blossom motif as The Central Union of Cooperative. At the center are the Japanese characters for Kyoei, symbolizing our management philosophy. Contents Financial Highlights...1 Message from the Management...2 Commitment to Transparent Management...5 Philanthropic Activities...8 Review of Operations...11 Non-Consolidated Balance Sheet...16 Non-Consolidated Profit and Loss Accounts...18 Consolidated Balance Sheet...20 Consolidated Profit and Loss Accounts...22 Consolidated Cash Flow Statement...24 Consolidated Five-Year Summary of Selected Financial Data...26 Board of Directors, Auditors and Executive Officers...27 Organization...28 Company Data...29 This annual report is designed to disclose important corporate data to our policyholders and shareholders. The accounting method used complies with standards set by The Marine & Fire Insurance Association of Japan for easy comparison with other non-life insurance stock corporations. The content of this annual report is based on disclosures made in line with Article 111 of the Japanese Insurance Business Law. The financial statements (p16 - p25) are unaudited and have been translated into English from the Company's Japanese-language Brief Statement of Financial Results. In this annual report, statements other than historical facts are forward-looking statements that reflect our plans and expectations. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results and achievements to differ materially from those anticipated in these statements.

3 Financial Highlights For the years ended March 31,, 2005 and 2004 The Kyoei Fire & Marine Insurance Co., Ltd. Non-Consolidated Financial Highlights Millions of Yen Thousands of U.S. Dollars (Note 1) Net Premiums Written for Non-Life Insurance , , ,878 $1,463,376 Interest and Dividend Income (Note 2)... 11,844 10,492 9, ,829 Ordinary Profit... 2,856 3,177 6,803 24,319 Total Assets , , ,769 6,218,918 Investment Assets , , ,239 5,728,793 Underwriting Reserve , , ,784 4,438,474 Net Income for the Year ,005 5,143 Net Loss Ratio (Note 3) % 61.2% 54.2% 59.6% Net Operating Expense Ratio (Note 4) % 36.6% 36.5% 35.9% Consolidated Financial Highlights Net Premiums Written for Non-Life Insurance , , ,040 $1,464,726 Life Insurance Net Premiums... 16,210 12,606 11, ,992 Interest and Dividend Income (Note 2)... 12,929 11,405 10, ,067 Ordinary Profit... 3,002 3,300 6,875 25,555 Total Assets , , ,720 6,679,390 Underwriting Reserve , , ,867 4,902,745 Net Income for the Year ,045 5,338 Notes: 1. The U.S. dollar amounts in this report are provided for convenience only and have been converted at the rate of to US$1, the approximate rate of exchange in effect on March 31,. 2. Including investment income on deposit premiums. 3. Ratio of net losses and loss adjustment expenses paid to net premiums written. 4. Ratio of net operating expenses paid to net premiums written. Net Premiums Written for Non-Life Insurance Years ended March 31 (Billions of yen) Total Assets Years ended March 31 (Billions of yen) Net Income Years ended March 31 (Billions of yen) Non-Consolidated Consolidated Non-Consolidated Consolidated Non-Consolidated Consolidated 1

4 Message from the Management Under the new medium-term management plan, we aim to become a highly profitable non-life insurance company trusted by customers. Susumu Tamura President Kyoei Fire and Marine was established by earlier industry associations the direct predecessor of today s cooperative unions such as agricultural, fishery, consumer cooperatives and cooperative banks. Since our foundation, we have carried out our business activities with an unwavering emphasis on maintaining well-established relationships with cooperative unions and cooperative organizations. On the occasion of reorganizing into a publicly held company in April 2003, Kyoei Fire and Marine received capital via investments from such cooperative unions and organizations as Zenkyoren (The National Mutual Insurance Federation of Agricultural Cooperatives), Norinchukin Bank and Shinkin Bank. Thanks to these investments, we solidified our position as an insurance company with unique characteristics based on relationships with cooperative unions and cooperative organizations. To ensure our place among the industry survivors by surmounting harsh conditions in the business environment and maximizing our unique characteristics and strengths as an insurance company underpinned by cooperative unions and cooperative organizations, Kyoei Fire and Marine has been promoting its New Victory Plan medium-term management plan (fiscal fiscal 2005) with the aim of establishing a new growth track. As a result, income from originally accepted net premiums written increased in fiscal 2004 and net premiums written subsequently rose in fiscal 2

5 2005, which in turn, enabled us to realize steady progress toward establishing a new growth track. While public-sector investment is projected to decline in the future, the Japanese economy is expected to show signs of recovery supported by favorable business results in the corporate sector. Nonetheless, given a business environment in which Japan's non-life insurance industry has matured, the industry is expected to experience intensifying competition not only within but also extending beyond the industry. Additionally, financial administrations are also advocating fair competition and promoting measures to enhance customer satisfaction and convenience, while at the same time, the speed of changes in the business environment is also expected to increase as a result of implementing respective measures included in financial reform programs and easing of regulations. Based on the future business environment as well as results that have been achieved through promoting the New Victory Plan, we have formulated a new three-year mediumterm management plan, Kyoei Advance Plan Striving to put a smile on our customers faces (fiscal - fiscal 2008) commencing from fiscal. With this plan, Kyoei Fire and Marine aims to become a highly profitable and excellent non-life insurance company that is unique based on relationships with cooperative unions and cooperative organizations and trusted by customers, sales agents and society as a whole. Furthermore, the new plan specifically focuses on eight priority issues, namely, to promote unified business operations with Zenkyoren, strengthen sales channels and promote measures to increase premium income, reinforce measures to improve underwriting income, secure stable income from asset management, secure operational adequacy, provide products and services that will be selected by customers, enhance reliability and strengthen human resource development. In achieving these issues, we aim to boost earnings power and enhance corporate quality. Under the fundamental spirit of our management philosophy of co-existence and co-prosperity, we will continuously strive to carry out business operations from the customer s perspective. At the same time, beginning with solidifying our affiliations with cooperative unions and cooperative organizations, we will also forge even closer relationships through the strong partnerships already built with prominent companies and such valued agencies as car dealers and maintenance shops, and members of Kyoei Pro Club, which serve as our primary sales channels, as well as with directly managed sales staff. Moreover, we will exert more of our characteristics as an insurance company based on relationships with cooperative unions and cooperative organizations and undertake concerted efforts to provide high quality products and services to all customers to achieve customer satisfaction. Under the new management plan, we aim to become an excellent non-life insurance company distinguished by highly profitable, unique characteristics and trusted by customers, sales agents and society as a whole. Susumu Tamura President August 3

6 Medium-term Management Plan (Fiscal - Fiscal 2008) Kyoei Advance Plan Striving to put a smile on our customers faces Management Philosophy and Principles Spirit of Co-existence and Co-prosperity 1. To contribute to the development of local communities and society by providing assurance and safety to our customers with a spirit of co-existence and co-prosperity. 2. To act constantly according to the best interests of our customers and earn customers trust and meet customers expectations. 3. To form an organization in which we judge ourselves, think and act by ourselves and proceed toward realizing our goals with all of our might. Aspired Image A highly profitable and excellent non-life insurance company that is unique based on relationships with cooperative unions and cooperative organizations and trusted by customers, sales agents and society as a whole. Top Priorities Enhance corporate quality Secure operational adequacy Enhance reliability Provide products and services that will be selected by customers Strengthen human resource development Boost earnings power Underwriting income Promote unified business operations with Zenkyoren Strengthen sales channels and promote measures to increase premium income Reinforce measures to improve underwriting income Investment profits Secure stable income from asset management 4

7 Commitment to Transparent Management Our goal is to be an insurance company worthy of your trust. To this end, we are working to build a sound and highly transparent management structure. Corporate Governance We consider the enhancement of corporate governance to be a priority management issue in working to improve the stability and soundness of management. We are intent on continuing to enhance and sustain sound corporate management through effective utilization of management resources, and by ensuring effective oversight and proper risk management. Corporate Organization Our Board of Directors consists of 16 directors, including four external directors. The Board of Directors makes decisions for the Kyoei Fire and Marine Insurance Group on management strategy, business plans, organizational reform and key personnel, among other matters. It also oversees the execution of corporate business and generally meets once a month. We have also introduced an executive officer system under which 17 executive officers conduct business based upon the guidance and directives of the representative directors. We have also established a Managing Directors Meeting, consisting of managing directors and managing executive officers, as the body charged with reviewing important matters pertaining to business execution. Kyoei Fire and Marine employs a corporate auditor system. The Board of Corporate Auditors consists of five auditors, including three external auditors. We are working to strengthen auditing functions provided by these auditors. We have also established a Management Advisory Board conducted by external experts as the body that provides advice and recommendations on important issues facing management. Readiness Status of Internal Controls In order to ensure sound, proper management of our business and to protect clients by ensuring fair insurance marketing practices, we have designated thorough compliance as the cornerstone for managing operations. The Compliance Oversight Committee, consisting of executive officers, has been established. This committee ascertains and oversees all compliance issues, including ascertaining the progress of and supervising the Compliance Program, verifying misconduct and administrative issues, and determining measures to prevent reoccurrence. We are working to strengthen our internal control system together with the Corporate Risk Management Committee, established to address risks arising in the course of operations. Kyoei Fire and Marine has also established Legal Compliance Committees in each division and branch nationwide as subsidiary organizations to the Compliance Oversight Committee. Division and branch managers serve as supervisors for these committees and work to promote effective compliance. As an additional measure, we have appointed compliance general managers nationwide affiliated with the Compliance, Legal & Risk Supervising Dept. These managers offer guidance, support and training in promoting compliance to sales divisions, branches and claims services throughout the country. 5

8 Corporate Governance Structure General Meeting of Shareholders Elected Elected Elected Independent Auditing Firm Auditing Board of Corporate Auditors Five auditors (including three external auditors) Auditing Auditing Managerial Decision-making and Oversight Board of Directors 16 directors (including four external directors) Providing advice and suggestions Management Advisory Board Reporting Delegation and oversight Reporting Business Execution Managing Directors Meetings Executive Officers Committees for Specific Issues Compliance Oversight Committee Corporate Risk Management Committee, etc. Internal Auditing Department Auditing Divisions and Branches 6

9 Readiness Status of Risk Management Structure Risks that Kyoei Fire and Marine must monitor in the course of operations include insurance underwriting risk, asset management risk, liquidity risk, clerical operations risk and system risk. We consider risk management a priority issue and have therefore established the Risk Management Office in the Compliance, Legal & Risk Supervising Dept. to ensure integrated, effective risk management throughout the Company, as well as establishing a Corporate Risk Management Committee, the ALM Committee and the Information Asset Management Oversight Committee. In addition to this, the Board of Directors formulates Kyoei Fire and Marine's policies on overall risk management and policies on management of individual risks. The respective departments responsible for managing each type of risk undertake risk management based on these policies. Specific measures implemented include establishing risk management regulations, and reporting the results of assessment and monitoring of each risk to management. Status of Internal Audits, Audits by Auditors and Independent Auditing Firm Kyoei Fire and Marine has structured the Internal Auditing Department so that it is independent of areas involving the conduct of business. This department implements internal audits. When implementing an internal audit, the Internal Auditing Department verifies the degree to which internal controls have been implemented, beginning with verification of the appropriateness and effectiveness of legal compliance for all divisions and subsidiaries within the Company based on a drafted basic plan. After each audit, the audit results are submitted to the Managing Directors Meeting for approval and reported regularly at the Board of Directors meeting. The Internal Auditing Department issues orders for improvement to all units subjected to auditing and works to ensure effective improvements by verifying that all inadequacies noted have been corrected. The Board of Corporate Auditors consists of five auditors, including three external auditors. The Board of Corporate Auditors creates the policies and plans for audits, and in line with these, reviews important documents, and conducts onsite audits at branches in addition to attending important internal company meetings including Board of Directors meetings as well as Managing Directors' meetings, Compliance Oversight Committee meetings and Corporate Risk Management Committee meetings. The Board of Corporate Auditors also exchanges opinions with the independent auditing firm periodically and works in coordination with the Compliance, Legal & Risk Supervising Dept. and the Internal Auditing Department through liaison meetings in the course of conducting audits. 7

10 Philanthropic Activities Earnest and Proactive Initiatives Underscore Our Unwavering Commitment to Society Our earnest contributions to society through a broad array of philanthropic activities carried out since our founding aptly symbolize two important Kyoei Fire and Marine philosophies: coexistence and co-prosperity, and mutual assistance. Even after becoming a publicly held company, Kyoei Fire and Marine remains committed to these philosophies. Demonstrating our firm commitment to philanthropic activities, in 1992 we donated used employee uniforms to the Republic of Mali in Western Africa after introducing new uniforms for female employees to commemorate our 50th anniversary. This philanthropic activity sparked the launch of our Valentine s Day: Giving and Receiving Fundraising Charity and Christmas Goods Charity drives, both of which were voluntarily initiated by employees in Now solidly positioned as traditional annual events, these two charity activities involve collecting used clothing and other items, in addition to soliciting funds through our branch offices across Japan for donation to the refugee camps in the Republic of Mali in Western Africa. These company-wide activities, together with activities carried out voluntarily by individual employees, are undertaken on an ongoing basis in line with our continued commitment to contributing to society. Activities to Realize Co-existence Making International Contributions through Charity Drives Valentine s Day: Giving and Receiving Fundraising Charity Our annual Valentine s Day: Giving and Receiving Fundraising Charity targeting all Kyoei Fire and Marine employees has been held since This activity was initially promoted by female employee volunteers to solicit donations in 500 increments to be used for a more meaningful purpose rather than customarily giving chocolates on Valentine s Day and receiving a gift in return on White Day. This charity activity conducted in February raised approximately 690,000 ( 16,370,000 cumulatively), and these funds were donated to contribute to afforestation in Western Africa via a non-government organization (NGO). Sorting clothing for the Christmas Goods Charity Christmas Goods Charity This charity event has been held since 1993 and entails activities to collect, sort and package such items as clothing, household medicine, toys, stationery and sewing tools that are no longer used in respective homes and send these items to refugee camps in Western Africa. Donations in Employees solicit donations at the Valentine s Day Charity Tree planting in West Africa 8

11 300 increments are also being solicited to cover shipping costs to send these goods. For fundraising activities conducted in December 2005, a Volunteer Promotion Team centered around female employees produced flyers and other materials calling for employee cooperation, with approximately 200 employees subsequently participating in sorting and packaging operations. A total of 4,707 collected goods were brought to refugee camps in the Republic of Mali in Western Africa via an NGO. Mamoru-kun Hot Air Balloon Appears at Charity Events Kyoei Fire and Marine s hot air balloon charity events are imbued with the idea of co-existence. A hot air balloon designed with the beaver character used in our main product Mamoru-kun (Building Endowment Comprehensive Insurance) continuously has been visiting social welfare facilities nationwide since Our local employees also have participated in these events by serving as staff, and up until now tethered balloon rides have been carried out in more than 150 locations. In May 2005, Mamoru-kun visited welfare facilities in Takamatsu city and Marugame city, as well as a local primary school in Kagawa Prefecture. Additionally, Mamorukun also participated in the Saga International Balloon Festival in November 2005, an event that enabled many people invited from such facilities as neighboring welfare facilities to enjoy a flight in the air. Used Stamps, Prepaid Telephone Cards and Unusable Post Cards Collected for Donation We began collecting used stamps and prepaid telephone cards as well as unusable post cards for donation to various organizations in In fiscal 2005, the 12th year of such activities, items equivalent to approximately 470,000 were collected, in which we donated used prepaid telephone cards to the Telephone Card Collection Volunteer Center and contributed used stamps to Seimei En Home for blind senior citizens. 9

12 Activities Directed toward the Global Environment Forest Conservation Activities Contributing to Environmental Protection Kyoei Fire and Marine Echo Forest Originating from afforestation activities, Tomonokai (the Echo Forest Friends Society) was established in 1992 and operates based on membership fees in 500 increments collected from Kyoei Fire and Marine employees. Main activities entail forest cultivation by taking part in the profit-sharing forestation business of the state-owned forests. Centering on the self-initiated efforts of Kyoei Fire and Marine employees to cultivate greenery, a total of 22,700 trees have thus far been planted and cared for at four locations in Japan encompassing a total area of 7.24 hectares. When the planted trees mature after many years, the income generated from the harvesting of the timber will be shared among the state and Tomonokai, the latter of which will be allocated in turn to new afforestation activities as well as activities that are carried out for the purpose of conservation of the natural environment. Activities to Enhance Culture Support Activities of Sports Rooted in the Local Area As a means of sharing the enjoyment of sports with as many people as possible, Kyoei Fire and Marine is sponsoring a number of sports activities. Since 1997, we have been continuously providing special support for the Ocean Middle Road Spring Breeze Marathon held in the Uminonakamichi Seaside Park in Fukuoka City, Fukuoka Prefecture, under the Kyoei Fire and Marine Sports Fiesta program. At the 2005 event, Kyoei Fire and Marine employees also provided staff support for holding a charity bazaar and assisting with driving diagnosis equipment. Additionally, since the first event in 1990, Kyoei Fire and Marine has been co-sponsoring the Lake Nojiri Cup Triathlon Japan Open, which is held each July in Shinano City, Nagano Prefecture, and has become one of the recognized annual events for promoting Shinano City. Supporting the Tokyo Chamber Opera House Established in 1969 to contribute to opera in Japan, the Tokyo Chamber Opera House holds concert activities that center on chamber operas. We provide assistance to various concerts, mainly featuring Japanese compositions performed by members of the Tokyo Chamber Opera House. In fiscal 2005, we provided support for five such concerts. 10

13 Review of Operations Overview of Business Results Japan s economy proceeded on a steady path to recovery in fiscal 2005, sustained by increasing capital investment in line with improving corporate profits and a gradual recovery in consumer spending as the employment situation improved. With growth slowing in the domestic non-life insurance market, the non-life insurance industry was subjected to increasingly severe industry competition as respective companies worked to improve management efficiency and develop new products and services to address the needs of clients within this limited market. This marks the final year in our medium-term management plan, New Victory Plan Establishing the Growth Track, initiated in fiscal In order to emerge a winner in this severe business environment, we have worked to manage our business by focusing on seven key issues, based on the basic philosophy, establish a new growth track by undertaking business operations that maximize our unique characteristics based on our deep bonds of trust with customers. These seven issues are to offer the highest-caliber products and services that match customer needs, further upgrade our claims adjustment services, promote unified business operations with Zenkyoren, secure profits by raising cost efficiency and achieving growth in insurance premium income, secure stable income from asset management, implement thorough compliance and risk management and form a true organization of professionals. In order to promote our key goal of promoting unified business operations with Zenkyoren, we have consigned business to JA (Japan Agricultural Co-operative) offices nationwide, and at the same time, held sales promotions introducing specialty products for JA. With respect to product development, we introduced Genkikai! T (Triple) long-term medical care insurance to provide indemnity for three major illnesses, as well as introduced a new product, Shobai-no Tatsujin (Business Pro), which provides comprehensive coverage of liability risks for small-to-medium-size firms. In the auto insurance sector, we also introduced Makasetokei (Leave the Subcompact to Us), an auto insurance plan specifically designed for subcompact cars that addresses indemnity needs for subcompact car owners. In this way, we continued to develop and provide a variety of products to address the diverse needs of our clients. To address compliance in an environment where corporate social responsibility is a subject of keen attention, we have been steadily implementing our Compliance Program, which is a practical plan specifying the basic policies for putting compliance into practice and the compliance standards and codes of conduct for officers and employees, in keeping with the spirit of the Kyoei Fire and Marine Standards of Ethics and focusing foremost on maintaining the trust of society and securing the trust of our clients. In order to address risk management for an increasingly complicated and diverse business environment, we have stipulated risk management policies along with regulations and standards for monitoring each type of risk according to its unique characteristics. We have also continued to ascertain and manage each type of risk through the establishment of the Compliance, Legal & Risk Supervising Dept., the Corporate Risk Management Committee and the ALM Committee to ensure effective and comprehensive risk management. Net Premiums Written by Insurance Operations Year ended March 31, (Billions of yen) Automobile 66.5 (38.7%) Miscellaneous 24.0 (14.0%) Marine 2.7 (1.6%) Building Endowment 11.2 (6.6%) Fire 16.9 (9.9%) Compulsory Automobile Liability 24.1 (14.0%) Personal Accident 26.1 (15.2%) Total

14 On November 25, 2005, Kyoei Fire and Marine received an order to improve operations from the Financial Services Agency in accordance with Article 132, Clause 1 of the Insurance Business Law. This was primarily due to inadequacies in our system checks for payment of insurance claims and in methods of review and monitoring, which resulted in failure to pay incidental insurance claims such as extra expense claims. We have already implemented measures to correct this and prevent reoccurrence, but have taken this reprimand to heart and are making every effort to improve operations so that such an incident will never be allowed to occur again. Operating Results for the Current Fiscal Year (Non-consolidated basis) Ordinary income, consisting of 225,076 million (US$1,916 million) in underwriting income, 15,209 million (US$129 million) in investment income, and other ordinary income of 529 million (US$4 million), declined 3,277 million (US$27 million) compared with the previous fiscal year to 240,815 million (US$2,050 million). Ordinary expenses, consisting of 200,967 million (US$1,710 million) in underwriting expenses, 3,677 million (US$31 million) in investment expenses, 31,924 million (US$271 million) in operating and general administrative expenses and 1,389 million (US$11 million) in other ordinary expenses, declined 2,956 million (US$25 million) to 237,959 million (US$2,025 million). Ordinary profit consequently declined 320 million (US$2 million) from the previous fiscal year to 2,856 million (US$24 million). Following adjustments for extraordinary income and expenses, corporate income tax, resident tax and other corporate taxes, net income was 604 million (US$5 million), an increase of 472 million (US$4 million) compared with the previous fiscal year. Insurance Underwriting Net premiums written rose 0.9% from the previous fiscal year to 171,902 million (US$1,463 million). Conversely, net losses and claims paid declined 1,787 million (US$15 million) to 94,496 million (US$804 million), resulting in a 1.6% improvement in our net loss ratio, to 59.6%. Underwriting and general administrative expenses declined 647 million (US$5 million) from the previous fiscal year to 30,461 million (US$259 million). As a result, the net operating expense ratio was 35.9%, an improvement of 0.7 percentage points over last fiscal year. Following adjustments for investment income on deposit premiums, reversal of outstanding claims and reversal of underwriting reserves, an underwriting loss of 6,503 million (US$55 million) loss was recorded, representing a 725 million (US$6 million) decline compared with the previous fiscal year. Net Loss Ratio Years ended March 31 (%) 80 Net Operating Expense Ratio Years ended March 31 (%)

15 Overview by Type of Insurance (Non-consolidated basis) Fire Insurance... Net premiums written rose 3.2% to 16,976 million (US$ % million) due to a decrease in reinsurance premiums to cover the risk of natural disasters. The net loss ratio improved percentage points to 50.2%, a substantial improvement over the previous fiscal year due to a decline in claims payment expenses due to wind and water damage resulting from typhoons and other natural disasters Fire (Billions of yen) Marine Insurance... Net premiums written rose 5.0% from the previous fiscal year to 1.6% 2,729 million (US$23 million) due to increased shipping activity as corporate results improved. The net loss ratio also improved 3.7 percentage points to 83.6% Marine (Billions of yen) Personal Accident Insurance... Net premiums written rose 5.2% to 26,192 million (US$ % million) due to aggressive marketing focused on cooperative unions and cooperative organizations. The net loss ratio also improved to 49.7%, an improvement of 1.2 percentage points over the previous fiscal year Personal Accident (Billions of yen) Automobile Insurance... Despite focused promotion of our flagship product, My Style 38.7% Automobile Insurance (KAP Set Up), a decline in premium rates, mainly on fleet contracts, resulted in a 1.1% decline in net premiums written to 66,549 million (US$566 million). The net loss ratio improved 0.1 percentage point to 68.2% Automobile (Billions of yen) 13

16 Compulsory Automobile Liability Insurance... Net premiums written declined 5.9% from the previous fiscal year 14.0% to 24,102 million (US$205 million) due to a decline in assumed reinsurance premium. The net loss ratio climbed 12.7 percentage points to 76.6% Compulsory Automobile (Billions of yen) Liability Building Endowment Insurance... New contracts for individuals acquiring home loans were strong, 6.6% resulting in an 8.5% increase in net premiums written to 11,287 million (US$96 million). The net loss ratio also improved percentage points to 23.3% Building Endowment (Billions of yen) Miscellaneous Insurance... Net premiums written rose 3.8% from the previous fiscal year to 14.0% 24,063 million (US$204 million) due to aggressive marketing focused on cooperative unions and cooperative organizations. The net loss ratio also improved 4.1 percentage points to 50.6% Miscellaneous (Billions of yen) Net Premiums Written Net Losses Paid and Loss Adjustment Expenses Net Loss Ratio (%) 14

17 Asset Management Undertaking Efficient Asset Management with Attention to Safety Asset Management Policies Assets owned by Japanese non-life insurance companies serve as both reserve funds for paying insurance claims and deposit assets consisting of deposit insurance premiums. Therefore, in managing funds, we aim for the most beneficial investments possible with a paramount emphasis on safety and liquidity, in accordance with the Insurance Business Law, Provisions of the Law and our own internal investment policies, which are based on these regulations. In addition, Kyoei Fire and Marine set up an independent risk management section separate from the trading execution section as part of efforts to undertake integrated monitoring of market and credit risks, establish a structure for mutual surveillance and strengthen risk management. Overview of Asset Management (Non-consolidated basis) Total assets as of the end of the fiscal year were 730,536 million (US$6,218 million), an increase of 24,463 million (US$208 million) compared with the previous fiscal year-end. Investment assets were 672,961 million (US$5,728 million), representing an increase of 37,652 million (US$320 million). Our efforts to manage domestic and overseas bonds effectively and flexibly, in addition to careful risk management, resulted in 12.9% growth in interest and dividend income from the previous fiscal year to 11,844 million (US$100 million). Total Assets Years ended March 31 (Billions of yen) Non-investment Assets Investment Assets Investment Assets Year ended March 31, (Billions of yen) Monetary Trusts 0.2 (0.1%) Monetary Receivables Bought 3.5 (0.5%) Cash & Deposit 35.1 (5.2%) Property & Equipment 56.4 (8.4%) Loans 76.1 (11.3%) Securities (74.5%) Total Total Investment Income Years ended March 31 (Billions of yen)

18 Non-Consolidated Balance Sheet As of March 31, and 2005 ASSETS Millions of Yen 2005 Thousands of U.S. Dollars Cash and Deposits... 35,321 49,439 $ 300,684 Monetary Receivables Bought... 3, ,813 Money Held in Trust ,132 Securities , ,391 4,268,128 Loans... 76,160 83, ,344 Property and Equipment... 58,609 60, ,929 Premiums Receivable ,678 Agency Accounts Receivable... 11,235 11,393 95,645 Co-insurance Accounts Receivable ,202 6,044 Reinsurance Accounts Receivable... 8,174 9,017 69,589 Foreign Reinsurance Accounts Receivable... 3,510 7,598 29,884 Accounts Receivable... 7,011 3,695 59,684 Accrued Revenue... 1,784 1,635 15,192 Guarantee Deposit... 1,883 1,959 16,035 Guarantee Deposit for Earthquake Insurance... 5,672 5,312 48,285 Temporary Payments... 3,937 4,529 33,520 Other Assets ,549 Deferred Tax Assets... 11,637 22,224 99,068 Reserve for Bad Debts... (829) (949) (7,057) Reserve for Loss on Investments... (27) (17) (234) Total Assets , ,073 $6,218,918 16

19 The Kyoei Fire & Marine Insurance Co., Ltd. LIABILITIES Millions of Yen 2005 Thousands of U.S. Dollars Outstanding Claims... 52,460 47,385 $ 446,586 Underwriting Reserve , ,611 4,438,474 Co-insurance Accounts Payable ,799 Reinsurance Accounts Payable... 6,806 7,420 57,943 Foreign Reinsurance Accounts Payable... 1,120 1,588 9,540 Loans Payable... 34,812 34, ,352 Accrued Taxes... 1, ,811 Guarantee Deposits ,013 Deferred Income ,534 Accounts Payable... 2,327 2,411 19,810 Temporary Receipts... 2,491 2,530 21,205 Reserve for Employees Retirement Benefits... 14,007 15, ,246 Reserve for Price Fluctuations... 2,129 1,814 18,128 Deferred Tax Liabilities on Revaluation Difference... 4, ,765 Total Liabilities , ,141 $5,494,213 CAPITAL Share Capital... 40,000 40,000 $ 340,513 Additional Paid-in Capital Profit Reserve... 2,630 2,520 22,388 Voluntary Reserves... 7,186 7,186 61,178 Unappropriated Retained Earnings... 5,902 6,046 50,246 Revaluation Difference on Land... (3,747) 482 (31,904) Valuation Difference on Stock and Others... 33,099 14, ,771 Total Capital... 85,131 70,931 $ 724,704 Total Liabilities and Capital , ,073 $6,218,918 Any portion of amount less than the unit stated is disregarded. The financial statements (p16 - p25) are unaudited and have been translated into English from the Company s Japanese-language Brief Statement of Financial Results. The U.S. dollar amounts are provided for convenience only and have been converted at the rate of to US$1, the approximate rate of exchange in effect on March 31,. 17

20 Non-Consolidated Profit and Loss Accounts For the years ended March 31, and 2005 ORDINARY PROFIT AND LOSS Millions of Yen 2005 Thousands of U.S. Dollars ORDINARY INCOME , ,093 $2,050,019 UNDERWRITING INCOME , ,408 1,916,037 Net Premiums Written , ,433 1,463,376 Deposit Premiums by Policyholders... 46,970 52, ,855 Investment Income on Deposit Premiums, etc.... 6,171 6,452 52,537 Gain on Foreign Exchange Translation INVESTMENT INCOME... 15,209 14, ,478 Interest and Dividend Income... 11,844 10, ,829 Gain on Money Held in Trust ,954 Gain on Sales of Securities... 8,472 9,273 72,127 Gain on Redemption of Securities ,061 Other Investment Income Transfer from Investment Income on Deposit Premiums, etc... (6,171) (6,452) (52,537) OTHER ORDINARY INCOME ,503 Sundry Ordinary Income ,503 ORDINARY EXPENSES , ,915 $2,025,700 UNDERWRITING EXPENSES , ,223 1,710,796 Net Losses and Claims Paid... 94,496 96, ,433 Loss Adjustment Expenses... 7,951 8,059 67,693 Agency Commissions and Brokerages... 31,254 31, ,061 Maturity Refunds to Policyholders... 59,284 64, ,681 Dividends to Policyholders Provision for Outstanding Claim Reserve... 5,074 2,449 43,198 Provision for Underwriting Reserve... 2,775 1,826 23,630 Other Underwriting Expenses ,073 INVESTMENT EXPENSES... 3,677 3,209 31,304 Loss on Money Held in Trust ,292 Loss on Sales of Securities... 1,964 1,364 16,723 Loss on Revaluation of Securities ,136 Loss on Redemption of Securities ,694 Expenses on Financial Derivative Products ,354 Loss on Foreign Exchange Translation ,673 Other Investment Expenses OPERATING AND GENERAL ADMINISTRATIVE EXPENSES... 31,924 32, ,769 OTHER ORDINARY EXPENSES... 1, ,830 Interest Paid ,652 Provision for Bad Debts Loss on Bad Debts Provision for Loss on Investments Sundry Ordinary Expenses ,835 ORDINARY PROFIT... 2,856 3,177 $ 24,319 18

21 The Kyoei Fire & Marine Insurance Co., Ltd. EXTRAORDINARY PROFIT AND LOSS Millions of Yen 2005 Thousands of U.S. Dollars EXTRAORDINARY PROFIT $ 60 Profit on Sales of Other Properties EXTRAORDINARY LOSS... 1,096 2,962 9,333 Loss on Sales of Other Properties , Loss Due to Impairment ,929 Provision of Reserve for Price Fluctuation ,678 Other Extraordinary Loss... 1,578 INCOME FOR THE YEAR BEFORE CORPORATE INCOME TAXES... 1, ,046 CORPORATE INCOME TAXES ,059 ADJUSTMENT OF INCOME TAXES, ETC (221) 1,843 NET INCOME FOR THE YEAR $ 5,143 RETAINED EARNINGS BROUGHT FORWARD FROM THE PREVIOUS PERIOD... 5,406 5,646 46,020 SPENDING FROM REVALUATION DIFFERENCE ON LAND... (107) 268 (917) UNAPPROPRIATED RETAINED EARNINGS... 5,902 6,046 $ 50,246 Any portion of amount less than the unit stated is disregarded. 19

22 Consolidated Balance Sheet As of March 31, and 2005 ASSETS Millions of Yen 2005 Thousands of U.S. Dollars Cash and Deposits... 40,602 54,218 $ 345,645 Call Loans Monetary Receivables Bought... 3, ,813 Money Held in Trust ,132 Securities , ,646 4,660,430 Loans... 77,762 84, ,981 Property and Equipment... 58,624 60, ,060 Other Assets... 45,625 48, ,403 Deferred Tax Assets... 11,633 22,220 99,029 Reserve for Bad Debts... (829) (949) (7,058) Reserve for Loss on Investments... (27) (17) (234) Total Assets , ,000 $6,679,390 20

23 The Kyoei Fire & Marine Insurance Co., Ltd. and Consolidated Subsidiaries LIABILITIES Millions of Yen 2005 Thousands of U.S. Dollars Outstanding Claims... 53,276 48,140 $ 453,533 Underwriting Reserve , ,089 4,902,745 Other Payable... 51,435 51, ,859 Reserve for Employees Retirement Benefits... 14,007 15, ,246 Reserve for Price Fluctuations... 2,206 1,878 18,780 Deferred Tax Liabilities Deferred Tax Liabilities on Revaluation Difference... 4, ,765 Total Liabilities , ,117 $5,972,609 CAPITAL Share Capital... 40,000 40,000 $ 340,513 Additional Paid-in Capital Retained Earnings... 13,512 13, ,028 Revaluation Difference on Land... (3,747) 482 (31,904) Valuation Difference on Stock and Others... 33,606 15, ,088 Foreign Currency Translation Adjustments... (406) (446) (3,456) Total Capital... 83,025 68,883 $ 706,780 Total Liabilities and Capital , ,000 $6,679,390 Any portion of amount less than the unit stated is disregarded. 21

24 Consolidated Profit and Loss Accounts For the years ended March 31, and 2005 ORDINARY PROFIT AND LOSS Millions of Yen 2005 Thousands of U.S. Dollars ORDINARY INCOME , ,056 $2,198,416 UNDERWRITING INCOME , ,289 2,057,052 Non-Life Insurance Net Premiums Written , ,617 1,464,726 Deposit Premiums by Policyholders... 46,970 52, ,855 Investment Income on Deposit Premiums, etc.... 6,171 6,452 52,537 Life Insurance Net Premiums Written... 16,210 12, ,992 Other Underwriting Income ,940 INVESTMENT INCOME... 16,440 15, ,955 Interest and Dividend Income... 12,929 11, ,067 Gain on Money Held in Trust ,954 Gain on Sales of Securities... 8,618 9,713 73,366 Gain on Redemption of Securities ,061 Other Investment Income Transfer from Investment Income on Deposit Premiums, etc... (6,171) (6,452) (52,537) OTHER ORDINARY INCOME ,408 Sundry Ordinary Income ,408 22

25 The Kyoei Fire & Marine Insurance Co., Ltd. and Consolidated Subsidiaries Millions of Yen 2005 Thousands of U.S. Dollars ORDINARY EXPENSES , ,755 $2,172,861 UNDERWRITING EXPENSES , ,463 1,838,459 Non-Life Insurance Net Losses and Claims Paid... 94,553 96, ,918 Loss Adjustment Expenses... 7,951 8,059 67,693 Agency Commissions and Brokerages... 32,240 32, ,460 Maturity Refunds to Policyholders... 59,284 64, ,681 Dividends to Policyholders Life Insurance Net Losses and Claims Paid, etc.... 2,317 2,297 19,729 Provision for Outstanding Claims Reserve... 5,129 2,322 43,664 Provision for Underwriting Reserve... 14,202 9, ,902 Other Underwriting Expenses ,384 INVESTMENT EXPENSES... 3,795 3,654 32,306 Loss on Money Held in Trust ,292 Loss on Sales of Securities... 2,103 1,707 17,903 Loss on Revaluation of Securities ,136 Loss on Redemption of Securities ,694 Expences on Financial Derivative Products ,219 Other Investment Expenses ,059 OPERATING AND GENERAL ADMINISTRATIVE EXPENSES... 34,095 34, ,249 OTHER ORDINARY EXPENSES... 1, ,845 Interest Paid ,668 Provision for Bad Debts Loss on Bad Debts Provision for Loss on Investments Sundry Ordinary Expenses ,835 ORDINARY PROFIT... 3,002 3,300 $ 25,555 EXTRAORDINARY PROFIT AND LOSS EXTRAORDINARY PROFIT $ 60 Gain on Sales of Other Properties EXTRAORDINARY LOSS... 1,110 2,974 9,451 Loss on Sales of Other Properties , Loss Due to Impairment ,929 Provision for Reserve for Price Fluctuations ,792 Other Extraordinary Loss... 1,578 INCOME FOR THE YEAR BEFORE CORPORATE INCOME TAXES... 1, ,164 CORPORATE INCOME TAXES... 1, ,245 ADJUSTMENTS OF INCOME TAXES, ETC (258) 580 NET INCOME FOR THE YEAR $ 5,338 Any portion of amount less than the unit stated is disregarded. 23

26 Consolidated Cash Flow Statement For the years ended March 31, and 2005 Millions of Yen 2005 Thousands of U.S. Dollars CASH FLOW FROM OPERATING ACTIVITIES Net Income Before Income Tax Adjustment... 1, $ 16,164 Depreciation and Amortization... 2,401 2,522 20,446 Loss Due to Impairment ,929 Increase (Decrease) in Reserve for Outstanding Claims... 5,131 2,317 43,684 Increase (Decrease) in Underwriting Reserves... 13,836 9, ,784 Increase (Decrease) in Reserve for Bad Debts (21) 535 Increase (Decrease) in Reserve for Employees Retirement Benefits... (1,805) (165) (15,371) Increase (Decrease) in Loss on Investments Increase (Decrease) in Reserve for Price Fluctuations ,792 Interest and Dividend Income (Expense)... (12,929) (11,405) (110,067) Gain (Loss) on Securities... (5,694) (7,419) (48,473) Interest Paid ,668 Foreign Exchange Gain (Loss) ,674 Gain (Loss) on Property and Equipment Increase in Other Assets (Excluding Those Incurred by Investment and Financing Activities)... 7,309 (5,156) 62,226 Increase (Decrease) in Other Liabilities (Excluding Those Incurred by Investment and Financing Activities)... (880) 986 (7,498) Other (510) 322 Subtotal... 11,450 (6,188) 97,472 Interest and Dividend Income Received... 12,966 11, ,385 Interest Payment... (664) (812) (5,656) Corporate Tax, etc. Paid... (497) (1,135) (4,232) Net Cash Provided by (Used in) Operating Activities (A)... 23,255 3,501 $197,968 24

27 The Kyoei Fire & Marine Insurance Co., Ltd. and Consolidated Subsidiaries Millions of Yen 2005 Thousands of U.S. Dollars CASH FLOW FROM INVESTMENT ACTIVITIES Net Increase in Deposits... 1,052 (58) $ 8,958 Purchases of Monetary Receivable Bought... (4,401) (5,342) (37,472) Proceeds from Sales or Maturity of Monetary Receivable Bought... 1,439 8,398 12,251 Purchases of Money Held in Trusts... (12,220) (12,500) (104,026) Proceeds from Sales or Maturity of Money Held in Trusts... 12,539 24, ,750 Purchases of Investment Securities... (284,336) (254,494) (2,420,505) Proceeds from Sales or Maturity of Investment Securities , ,463 2,092,729 Loans Made... (23,221) (25,402) (197,677) Collection of Loans... 29,357 35, ,916 Other... Subtotal (B)... (33,957) (18,715) (289,076) [A+B]... [(10,702)] [(15,214)] [(91,107)] Purchases of Property and Equipment... (1,527) (1,260) (13,001) Proceeds from Sales of Property and Equipment ,949 Net Cash Provided by (Used in) Investing Activities... (35,256) (19,242) $ (300,129) CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Issuance of Commercial Paper... 30,000 15, ,384 Repayments of Commercial Paper... (30,000) (15,000) (255,384) Dividends Paid... (530) (530) (4,511) Net Cash Provided by (Used in) Financing Activities... (530) (530) $ (4,511) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS... (304) (247) $ (2,595) NET CHANGE IN CASH AND CASH EQUIVALENTS... (12,835) (16,519) $ (109,268) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR... 48,978 65, ,946 CASH AND CASH EQUIVALENTS AT END OF YEAR... 36,142 48,978 $ 307,677 Any portion of amount less than the unit stated is disregarded. 25

28 Consolidated Five-Year Summary of Selected Financial Data (Years ended March 31, 2002 through ) The Kyoei Fire & Marine Insurance Co., Ltd. and Consolidated Subsidiaries Ordinary Income , , , , ,129 $ 2,198,416 Net Premiums Written for Non-Life Insurance.. 172, , , , ,980 1,464,726 Life Insurance Premiums... 16,210 12,606 11,793 11,065 10, ,992 Ordinary Profit... 3,002 3,300 6,875 4,886 8,730 25,555 Net Income , ,338 Net Income per Share (in yen and U.S dollars): Millions of Yen Thousands of U.S. Dollars (Note 1) Basic... 3, , Diluted... Total Assets , , , , ,947 6,679,390 Shareholders Equity... 83,025 68,883 65,347 46,953 22, ,780 Shareholders Equity Ratio % 9.20% 8.88% 6.55% 3.08% 10.58% Return on Equity (ROE) % 0.19% 1.86% 1.82% 2.99% 0.83% Price-Earnings Ratio (PER)... Net Cash Provided by (Used in) Operating Activities... 23,255 3,501 7,111 (16,060) (28,894) 197,968 Investing Activities... (35,256) (19,242) (34,863) 33,789 14,577 (300,129) Financing Activities... (530) (530) (3,200) 27,255 (433) (4,511) Cash and Equivalents at End of Year... 36,142 48,978 65,498 96,490 51, ,677 Notes: 1. The U.S. dollar amounts are provided for convenience only and have been converted at the rate of to US$1, the approximate rate of exchange in effect on March 31,. 2. As Kyoei Fire and Marine was a mutual company before fiscal 2003 (year ended March 31, 2004), the Company issued no stock. Therefore, net income per share and diluted net income per share are not listed for fiscal years prior to fiscal As Kyoei Fire and Marine has no latent shares, diluted net income per share is not listed. 4. As Kyoei Fire and Marine operated as a mutual company before fiscal 2003 (year ended March 31, 2004), data for price-earnings ratio is not listed for fiscal years prior to fiscal As Kyoei Fire and Marine is a non-listed company and its shares are not registered on over-the-counter markets, data for price-earnings ratio is not listed. 26

29 Board of Directors, Auditors and Executive Officers (As of June 28, ) Chairman and Executive Officer Wataru Ozawa President and Chief Executive Officer Susumu Tamura Senior Managing Directors and Senior Managing Executive Officers Katsutoshi Arakawa Nobuyoshi Kurosu Managing Directors and Managing Executive Officers Yoshiaki Yubuki Takao Yoshitake Tatsuo Matsuyoshi Takahiro Nakanishi Keizo Ichikawa Directors Hiroshi Nomura (Chairman of the Supervisory Board of the National Mutual Insurance Federation of Agricultural Cooperatives) Isami Miyata (President of the Central Union of Agricultural Cooperatives) Takeji Yanagisawa (Chairman of the Supervisory Board of the National Federation of Agricultural Co-operative Association) Koji Omae (President of the Johoku Shinkin Bank, president of the National Association of Shinkin Banks, and president of Shinkin Central Bank) Directors and Executive Officers Yoshio Yamada Yoshiyuki Sekiguchi Shinichiro Suga Standing Corporate Auditors Mikio Hayakawa Junzo Hirano Shusaku Yamamoto Corporate Auditors Kazuyoshi Suzuki Yutaka Oya Managing Executive Officers Hiroyuki Oba Shojiro Hayashi Senior Executive Officer Kojiro Minami Executive Officers Katsuhiro Hamamoto Shinji Hieda 27

30 Organization (As of June 28, ) Internal Auditing Dept. Corporate Planning Dept. Planning & Research Office Public Relations Office Integration Promotion Dept. Secretary s Office Compliance, Legal & Risk Supervising Dept. Risk Management Office Personnel Dept. Human Resources Development Office General Affairs Dept. Accounting Dept. Investment Dept. Information Systems Dept. Sales Operation Support Dept. General Meeting of Shareholders Board of Directors President Managing Directors Meeting President Fire & Casualty Underwriting Dept. Automobile Insurance Dept. Customer Service Dept. Management Committee Non-Marine Claims Management Dept. Board of Corporate Auditors Corporate Auditors Actuary Claims Management Office Reinsurance & Marine Dept. Marine Insurance Office Agency System Dept. Sales Promotion Management Dept. Life Insurance Sales Promotion Office Cooperative Market Development Dept. Fishery Cooperative Market Development Office Government Sectors Office Cooperative Supplying & Marketing Business Development Dept. Financial Institutions Dept. Group Organization Market Development Dept. Planning & Development Office Automobile Development Dept. Direct Sales Management Dept. Regional Production & Claims Branch (37 Departments) 28

31 Company Data (As of March 31, ) The Kyoei Fire & Marine Insurance Company, Limited Head Office: 18-6, Shimbashi 1-chome, Minato-ku, Tokyo , Japan Established: July 1, 1942 Total Assets: 730,536 million Net Premiums Written: 171,902 million Capital: 40,000 million Employees: 2,364 Direct Sales Staff: 775 Domestic Network: Branches 32 (As of June 28, ) Sub Branches 163 Claims Service Centers 103 Agents 13,370 Head Office Line of Business Fire Marine Hull & Cargo Transit Automobile Personal Accident Animal Fidelity & Credit Burglary Aviation Guarantee Windstorm & Flood Plate-Glass Compulsory Automobile Liability Machinery Ship s Passengers Accident Liability Nuclear Energy General Liability Contractors All Risks Movables All Risks Building Endowment Workers Compensation Miscellaneous Pecuniary Loss Reinsurance of All Classes Overseas Network (As of Juiy 1, ) United Kingdom London Representative Office City Tower, Level 4, 40 Basinghall Street, London EC2V 5DE, United Kingdom Telephone: +44(20) Facsimile: +44(20) Chief Representative: Hiroshi Matsushita Kyoei Fire & Marine Insurance Co. (U.K.) Ltd. (Subsidiary Company) City Tower, Level 4, 40 Basinghall Street, London EC2V 5DE, United Kingdom Telephone: +44(20) Facsimile: +44(20) Hong Kong Hong Kong Representative Office Unit 1306, 13/F, Tower 2, Lippo Centre, 89 Queensway, Admiralty, Hong Kong Telephone: Facsimile: Chief Representative: Kazuya Ito Claims Agents At all principal ports and cities throughout the world 29

32 KYOEI FIRE & MARINE THE KYOEI FIRE & MARINE INSURANCE Co., Ltd. Head Office Telephone Facsimile URL 18-6, Shimbashi 1-chome, Minato-ku, Tokyo , Japan (Reinsurance & Marine Dept.) (Investment Dept.) (Domestic) (Reinsurance & Marine Dept.) (Investment Dept.) (Domestic) This annual report is printed on recycled paper. Printed in Japan