FY2006 Results & Actions for proper business operations May 2007 Millea Holdings, Inc.

Transcription

1 FY2006 Results & Actions for proper business operations May 2007 Millea Holdings, Inc.

2 Millea Holdings Key statistics FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 projections Ordinary income 2,929.0 bn yen 2,775.7 bn yen 2,899.4 bn yen 3,399.9 bn yen 4,218.5 bn yen 4,021.0 bn yen Net income 56.6 bn yen bn yen 67.6 bn yen 89.9 bn yen 93.0 bn yen bn yen Adjusted earnings * bn yen bn yen 51.8 bn yen bn yen bn yen bn yen Adjusted ROE *1 3.8% 5.9% 1.6% 3.7% 3.8% 3.4% Dividend total * bn yen 18.5 bn yen 19.7 bn yen 18.9 bn yen 25.2 bn yen 29.8 bn yen Dividend per share *3 17 yen 20 yen 22 yen 22 yen 30 yen 36 yen Share buy back * bn yen 92.4 bn yen 70.1 bn yen 85.0 bn yen 90.0 bn yen Sales of business related equity holdings bn yen bn yen bn yen bn yen 45.0 bn yen 40.0 bn yen Share price *5 1,472 yen 3,240 yen 3,120 yen 4,660 yen 4,360 yen 4,720 yen Market capitalization *5 1,363.0 bn yen 2,896.6 bn yen 2,683.2 bn yen 3,930.8 bn yen 3,594.9 bn yen 3,891.8 bn yen *1 FY2005: excludes the effect of precondition changes in the domestic life insueance business *2 FY2002: sum of Tokio Marine and Nichido Fire *3 All figures are shown as a basis after share-split implemented in Sep FY2002: figures for Tokio Maine *4 Term: from AGM to AGM. FY2006: excluding the stock exchange with Nisshin Fire. FY2007: annual limit *5 Share prices are as of the end of fiscal year and shown as a basis after share-split implemented in Sep FY2007: figures are as of May 18, % Millea HD TOPIX Relative price performance starting from April 2002 when Millea HD was incorporated 200% 150% as of May 18th, % 50% Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07

3 Part 1 FY2006 Results & FY2007 Projections Tokio Marine & Nichido Nisshin Fire TMN Life TMN Financial Life Millea group FY2007 projections Others FY2006 results FY2006 overview Impact of natural disasters and combined ratio Asset management performance FY2006 results FY2006 overview FY2006 results FY2006 results FY2006 consolidated results: P/L Analysis: comparison with TM&N Analysis: impact of major group companies FY2006 consolidated results: B/S Non-life insurance business Domestic life insurance business Millea consolidated Adjusted earnings Reference Millea group long-term strategy Capital management strategy Return to shareholders Non-payment of claims and over collection of insurance premium (1) Non-payment of collateral insurance claims, (2) non-payment of insurance claims for third sector products, (3) over collection of insurance premiums for fire insurance by Tokio Marine & Nichido and Nisshin Fire, totaled to 7.9 bn yen and 1 bn yen, respectively. The non-payments of life insurance subsidiaries, Tokio Marine & Nichido Life and Tokio Marine & Nichido Financial Life, were 130 mil yen and 0.4 mil yen, respectively. The majority of them have already been paid out, and we will carry out the payment toward completion. Tokio Marine & Nichido, non-consolidated Net premiums written in total increased by 1.9%, due to the continuous trend of increasing sales since the 2nd half in FY05. The loss ratio deteriorated by 0.9 points, caused by the impact of Typhoon No. 13. The expense ratio deteriorated by 0.5 points, due to the increased system-related expenses. Underwriting profit decreased by 26.6 bn yen y/y, due to the influence of natural disasters. Interest and dividend income increased by 27.9 bn yen on increased dividend receipt due to brisk business performance and dividends from overseas subsidiaries. Capital gains from the sale of securities holdings decreased by 8.8 bn yen due to a decrease in the sale of business related stocks, despite a gain in the sale of Aozora Bank stocks. These resulted in a 9.7 bn yen decrease in ordinary profit y/y. Net income also dropped by 25.7 bn yen. The reason for the greater decrease in net income than in ordinary profit is that extraordinary gain decreased by 30.5 bn yen due to a backlash effect from return of a substitutional part of the Employees Pension Fund in FY05. Nisshin Fire, non-consolidated Nisshin Fire was fully subsidiarized by Millea Holdings at the end of September Net premiums written in total increased by 0.1%. Loss ratio in total deteriorated by 3.1 points due to the impact of natural disasters. The expense ratio improved by 0.1 points. Underwriting loss was 6.7 bn yen, due to additional reserves for the introduction of statistical IBNR. Ordinary profit decreased by 4.7 bn yen y/y. Net income also dropped by 2.5 bn yen y/y. Tokio Marine & Nichido Life, non-consolidated ANP for in-force policies increased by 15.4% y/y. ANP for new policies also increased by 43.9% y/y, due to an increase in individual insurance. Net income is 0 bn yen because of the additional contribution of 12.6 bn yen to standard underwriting reserves to achieve the goal. EV increased by 30.4 bn yen y/y (excluding capital increase). Tokio Marine & Nichido Financial Life, non-consolidated ANP for in-force policies and new policies of variable annuity substantially increased by 169.3%, and 151.9%, respectively, due to the increase in allied financial institutions and product advantages. But net deficit was 19 bn yen due to the impact of life insurance accounting characteristics that expenses related to new policies are booked front-loaded. EV increased by 17.7 bn yen, which shows steady growth. Millea Holdings, consolidated] Ordinary income in Millea Holdings increased by bn yen to 4,218.5 bn yen y/y. Net premiums written in non-life insurance increased by 8.6% to over 2,000 bn yen due to the consolidation of Nisshin Fire in the 2nd half, full-term consolidation of Real Seguros in Brazil, and brisk overseas subsidiaries, in addition to increased sales of Tokio Marine & Nichido. Life insurance premium continuously increased substantially by 81.0% y/y, due to a substantial increase of variable annuity in Tokio Marine & Nichido Financial Life, despite the decrease in dollar denominated individual annuity in Tokio Marine & Nichido Life on weaker yen. Ordinary profit increased by 31.4 bn yen because of the backlash effect from the increase in incurred insurance claims for Hurricanes in US in FY05 and brisk overseas subsidiaries offset the profit decrease in Tokio Marine & Nichido. Net income increased by 3 bn yen. Dividend at period end hiked by 6 yen per share to 21 yen. The full-term divided is 36 yen, with 15 yen of interim dividend. Projections for Tokio Marine & Nichido, non-consolidated Net premiums written is expected to increase by 1.2% y/y, mainly due to a sales increase in fire insurance and auto insurance. Ordinary profit is expected to decrease by 3.3 bn yen, due to a decrease in the gain in asset management with backlash of gain on sale of stocks, although underwriting profit is expected to increase with a backlash of natural disasters in FY06. Net income is expected to grow by 23.5 bn yen, with estimated extraordinary gain on a shift in the corporate pension plan to 401k. Projections for Millea Holdings, consolidated Projections for ordinary income, ordinary profit, and net income are 4,021 bn yen, 181 bn yen, and 137 bn yen, respectively. Ordinary income is expected to decrease largely on the sales decrease in Tokio Marine & Nichido Financial Life, despite continuous brisk overseas subsidiaries or the contribution of newly consolidated subsidiaries. On the other hand, profitability is expected to improve due to the decrease in expenses such as agent commissions in line with the sales drop in Tokio Marine & Nichido Financial Life. These will result in an increase both in ordinary profit and net income in consolidation. Dividends are expected to be 36 yen for full term, with each 18 yen for the interim and period ends.

4 Tokio Marine & Nichido FY2006 results ( unit : bn yen) FY2005 FY2006 Y on Y changes Y on Y Net premiums written 1, % 1, % Underwriting profit * % % Investment income % % Ordinary profit % % Extraordinary profit/loss % Net income % % Loss ratio 60.6% 61.5% 0.9% Expense ratio 30.2% 30.7% 0.5% Combined ratio 90.9% 92.3% 1.4% Solvency margin ratio % % 20.9% * Underwriting profit: underwriting balance ( net premiums written claims expenses) additional transfers (loss reserves, underwriting reserves etc.) 3 Underwriting profit Underwriting profit decreased as a result of the substantial increase in net claims paid due to the impact of natural disasters, including Typhoon No. 13, and also the increase in system related expenses such as the Business Renovation Project and a thorough implementation of proper business operation, however, net premiums written increased compared with the previous period. Investment income Investment income increased compared with the previous period due to the increase in dividend and interest income, and a gain in the sale of Aozora Bank stocks, while gain of equity holdings sold decreased. Extraordinary profit/loss Extraordinary profit deteriorated substantially with a backlash of gain on return of a substitutional part of the Employee s Pension Fund in FY05. Expense ratio Although the personnel expenses ratio (decrease of salaries paid to employees and reduction of retirement benefit costs) improved, the non-personnel expenses ratio (mainly due to a system-related expense increase) and commission rate deteriorated and, in total, the expense ratio deteriorated by 0.5%. Solvency margin ratio The solvency margin ratio increased by 20.9% to % compared with the previous period, due to the solvency margin rise in line with the increase in unrealized gain/loss on available for sale securities as a result of the stock prices rise and decrease in huge disaster risk.

5 Tokio Marine & Nichido FY2006 overview Net premiums written and loss ratio by lines NPW Y on Y Loss ratio Y on Y Fire 1.6% 49.0% 3.9% Marine 9.8% 54.6% -1.2% P.A. 2.8% 48.3% 2.5% Auto 1.6% 64.3% -0.1% CALI -1.5% 78.0% 2.5% Others 4.5% 54.6% -0.2% Total 1.9% 61.5% 0.9% Incurred losses from natural disasters that occurred in the period (unit : bn yen) FY05 FY06 change Incurred losses Net premiums written Fire: Increased due to the strong sales of earthquake insurance for corporate customers and Cho Business Insurance (Super Business Insurance), and the increase in overseas underwriting. Marine: Increased due to economic recovery. Personal Accident: Increased due to the expanded sales of third sector products. Auto: Increased due to expanded sales of new policies. CALI: Decreased as a consequence of the reduction in base premiums in FY05. Others: Increased due to the sales of large-size policies. (reference) Premium income on a managerial accounting basis by channels in the company (unit : bn yen) Premium income Y on Y changes Personal % 7.0 Commercial % 13.5 Loss ratio Dealer % 30.3 Fire: Deteriorated mainly due to increased claims paid for natural disasters such as Typhoon No.13. Marine: Improved in line with the increase in net premiums written in spite of the increase in claims paid. Personal Accident: Deteriorated due to an increase in claims paid for travel insurance. Auto: Improved with the effects of warm winter weather. CALI: Deteriorated due to the influence of abolishment of the governmental reinsurance scheme. Others: Improved in total, due to the improvement in erection insurance and movables all risks insurance, despite the deterioration in liability insurance. Influence of natural disasters (those that occurred in the period) Losses increased by 21.3 bn yen to 45.7 bn yen y/y. The losses caused by Typhoon No. 13 were 37.9 bn yen.

6 Impact of natural disasters and combined ratio Incurred losses due to natural disasters (unit : bn yen) Fire Auto Others Marine Total FY FY changes (unit : bn yen) Paid O/S Total FY FY changes Catastrophe reserves outstandings & ratios by lines As of the end of FY05 As of the end of FY06 (unit : bn yen) Fire Auto P.A. Others Marine Total Reserve Reserve ratio * 118.2% 20.0% 76.4% 78.3% 151.7% 55.8% Reserve Reserve ratio * 127.0% 18.9% 77.4% 79.7% 141.4% 56.9% * Reserve / NPW (excl. household E/Q, CALI) 100 Trend of catastrophe reserves (unit : bn yen) Incurred losses due to natural disasters FY03 FY04 FY05 FY06 FY03 FY04 FY05 FY06 FY07 projection FY07 projection (unit : bn yen) 5 Incurred losses due to natural disasters Claims paid and outstanding claims by Typhoon No. 13 were 35.5 bn yen and 2.4 bn yen, respectively, and thus the total incurred losses were 37.9 bn yen. Catastrophe reserves In FY06, gross transfers of catastrophe reserves were 39.7 bn yen. This resulted in reserves of bn yen as of the end of March 2007, and a correspondingly higher reserve ratio. In FY07, gross transfer is expected to increase by 23.9 bn yen to bn yen of the reserve at the fiscal-end. Underwriting reserves for natural disaster losses Underwriting reserves: No additional costs were incurred. Catastrophe reserves: No additional costs incurred, and there was no change in the provision ratio of catastrophe reserves. Tokio Marine & Nichido will be able to accomplish the goal of 100% within four years already having taken into consideration the possibility of having to reverse the reserves. Trend of loss ratio, expense ratio, combined ratio (unit : bn yen) FY05 FY06 Y on Y FY07 projections Corporate expenses % % FY02 * 85.3% 52.7% 32.7% (ratio) (14.2% ) (14.4% ) (+0.3% ) (14.9% ) (+0.5% ) FY03 * 85.0% 53.5% 31.5% Agent commissions % % FY04 * 94.9% 63.4% 31.4% (ratio) (16.1% ) (16.3% ) (+0.2% ) (16.3% ) (+0.0% ) FY % 60.6% 30.2% Expense total % % FY % 61.5% 30.7% Expense ratio 30.2% 30.7% +0.5% 31.2% +0.5% FY07 projections 93.1% 61.9% 31.2% Loss ratio 60.6% 61.5% +0.9% 61.9% +0.3% * weighted average figures of TMF and ND Combined ratio 90.9% 92.3% +1.4% 93.1% +0.8% including CALI effect Expense ratio = (Corporate expenses + Agent commissions) Net premiums written Corporate expenses increased by 9.8 bn yen to bn yen y/y. While personnel expenses decreased, non-personnel expenses increased, mainly due to system-related expenses growth for the Business Renovation Project or implementation of proper business operations. Agent commissions increased by 10.3 bn yen y/y to bn yen due to the development of premium discount based on good results in both non-fleet and fleet policies in auto insurance which cause the increase of agent commission rates. In FY07, the expense ratio is expected to be 31.2%, an increase of 0.5% from the preceding fiscal year. This increase is expected mainly because of higher costs incurred in the implementation of proper business operations. Loss ratio In FY06, the loss ratio deteriorated by 0.9% to 61.5% mainly due to the claim increase for natural disasters In FY07, the loss ratio is expected to deteriorate by 0.3% to 61.9% because of increases of loss adjusted expenses in line with claims service division enhancement, and auto insurance claims paid. Y on Y C/R L/R E/R

7 Tokio Marine & Nichido Asset management performance Composition Composition of of assets assets under under management management Net Net investment investment income income bn yen 10,814 bn yen bn yen cash payable monetary claims bought domestic bonds 11,177 bn yen bn yen) bn yen Capital gains from securities holdings sold Excluding capital gains domestic equities foreign securities loans real estate others other assets Details Details of of net net investment investment income income (bn yen) FY05 FY06 changes Interest and dividend income Investment profits for saving type ( ) insurance policy ( ) Net interest and dividend income Net capital gains Gains from security holdings sold Appraisal losses on securities (Gains / losses on derivatives) Net investment income Results in FY06 Total assets of Tokio Marine & Nichido were 11,177.4 bn yen, an increase by bn yen from FY05. This increase was mainly due to the domestic stock market upturn. Net investment income of Tokio Marine & Nichido was bn yen, an increase by 13 bn yen from FY05. Excluding the effect of capital gains from security holdings sold, net investment income would have increased by 21.9 bn yen from FY05. This increase was mainly due to the increase in dividend receipt backed by brisk corporate earnings or payout ratio improvement and the increase in dividends from overseas subsidiaries. The actual net investment income increased by 13 bn yen to bn yen, an estimate for FY06 at the end of the first half. This increase was mainly due to an increase in realized gain in net investments of private equity, over an estimate. The increase in payable monetary claims bought and decrease in domestic bonds were due to the shift of short term funds in short-term government bonds to relatively high yield CPs, in view of the interest rate increase by Bank of Japan Composition of asssets by asset class bn yen Interest & dividend income (bn yen) 06/03 07/03 changes FY05 FY06 changes Cash & cash equivalents Payable monetary claims bought etc. * , Domestic bonds Domestic bonds 2, , Domestic equities Domestic equities 4, , Foreign securities Foreign securities Loans Other securities Real estate Loans Others * Real estate Sub-total 10, , Other assets *3 Others Total assets 10, , Total Payable monetary claims bought + Recievable under resale agreements + Guarantee deposits for bond loan transaction Monetary trust + Other securities 3 Cash + Real estate + Construction in process + Deposit of earthquake insurance + Customer's liabilities for acceptance/guarantees + Bad debt reserve Projections for FY07 Interest and dividend income will decrease by 7.5 bn yen, due to a backlash of increase in realized gain in net investment of private equity in FY06. Net investment income is estimated at bn yen in FY07, due to the decrease of capital gain from security holdings sold by 30 bn yen with the backlash of FY06.

8 Nisshin Fire FY2006 results (unit : bn yen) FY2005 FY2006 Y on Y changes Y on Y Net premiums written % % Underwriting profit % Investment income % % Ordinary profit % % Extraordinary profit/loss Net income % % Loss ratio 59.0% 62.1% 3.1% Expense ratio 36.5% 36.4% -0.1% Combined ratio 95.5% 98.5% 3.0% Solvency margin ratio % % % 7 Net premiums written Net premiums written in total began to increase, mainly due to the increase in sales of core products such as auto insurance, which has been decreasing. Underwriting profit Underwriting profit decreased substantially, due to the effects of natural disasters such as Typhoon No. 13, or the introduction of statistical IBNR. Investment income While the interest and dividend income increased, investment income decreased due to the increase in loss revaluation of securities. Loss ratio The loss ratio deteriorated because of the increase in claims paid of 3.2 bn yen for Typhoon No. 13, which was the 6th highest payment in the record. Expense ratio The expense ratio improved because the personal information protection law-related expenses completed in the previous period and the net premiums written increased, while personnel expenses deteriorated due to the increase of employees promoting retail business. Solvency margin ratio The solvency margin ratio dropped by points, mainly due to the decrease in revaluation for sale securities (i.e. unrealized gain) or the increase in huge disaster risk. Decrease in revaluation for sale securities: although the stock market slightly went up from the end of FY05 the unrealized gain decreased corresponding to the composition of the portfolio. Tokio Marine & Nichido + Nisshin Fire Tokio Marine & Nichido Nisshin Fire Total (unit : bn yen) FY05 FY06 changes Y on Y FY05 FY06 changes Y on Y FY05 FY06 changes Y on Y Net premiums written 1, , % % 2, , % Underwriting profit % % Investment income % % % Ordinary profit/loss % % % Extraordinary profit/loss % % Net income % % %

9 Nisshin Fire FY2006 overview FY06 FY06 results results by by sales sales channels Weighting Career Part-time Business organization Premiums are on a managerial accounting basis (unit : bn yen) Financial institution Car dealer Premiums Total changes Steady growth in major channels: Career & Part-time FY06 FY06 results results by by lines lines Auto CALI Fire P.A. Others Premiums Y on Y Premiums are on a financial accounting basis (unit : bn yen) Marine Total Loss ratio Strategy by sales channels Career agents (incl. trainees): Instruct in consulting sales methods to small-to-medium size corporate customers, especially on liability insurance and auto fleet policy, etc. Part-time agents (automobile related shops : Cooperate on passing repairs to damaged vehicles and introduce positively recycle-parts oriented auto insurance 'asante' as a support scheme for their main business. Part-time agents (real estate retailers): Provide fire insurance on household goods for tenant lessees 'L-plan super' and introduce a new way to pay premiums through convenience stores which contribute to customer security and convenience as well as reducing the agent's work load. Net premiums written and loss ratio Auto: Increased due to the enhancement of coverages, utilizing confirmation map contractual coverage. Loss ratio deteriorated slightly. CALI: Number increased due to progress in appointments of new agents, but net premiums deteriorated slightly. Fire: Net premiums increased slightly. The loss ratio deteriorated substantially due to natural disasters. P.A.& Others: Increased due to sales of products for small-to-medium sized companies. The loss ratio deteriorated due to the increased large accidents. Enhancement of sales channels Premiums from newly appointed agents : 4.8 bn yen Premiums are the sum of premium income from agents appointed in FY06, and premium income increased in FY06 from agents appointed in FY05 1,303 agents were newly appointed during FY06

10 Tokio Marine & Nichido Life FY2006 results Tokio Marine & Nichido Life (unit : bn yen) (No. of policies: 000 omitted) (ANP: Annualized New Premiums) Note 1: Third sector policies such as medical/cancer insurance underwritten by TMN Life are not included in the amount of sum insured since there is no death coverage Note 2: The annualized insurance premium is calculated by multiplying the insurance premium at each payment by a factor depending on insurance premium payment method. (Example: in monthly payment contract, the annualized insurance premium is equal to the monthly payment times 12) New policies In-force policies No. of policies Sum insured FY2005 FY2006 Y on Y changes Y on Y Individual insurance % % Medical/cancer etc % % Individual annuity % % Total % % Individual insurance 1, % 1, % Individual annuity % % Individual insurance % % ANP Medical/cancer etc % % Individual annuity % % Total % % Individual insurance 1, % 2, % No. of Medical/cancer etc % % policies Individual annuity % % Total 2, % 2, % Sum Individual insurance 11, % 12, , % insured Individual annuity % % Individual insurance % % ANP Medical/cancer etc % % Individual annuity % % Total % % Premium income % % Ordinary profit % % Net income % % Core operation profit % % Solvency margin ratio 2,058.1% 2,585.6% 9 New policies The number of policies decreased by 37,000 y/y, due to the decline in third sector products (e.g, long-term accident insurance) and individual annuity insurance, despite brisk sales of new products for corporations. ANP increased by 20 bn yen due to the strong performance of new products for corporation. Policies in force The number of policies, sum insured, and ANP all increased both in individual insurance and individual annuity insurance. Premium income Premium income increased by 28.6 bn yen, with brisk sales of new products for corporations, despite the fact that single premiums decreased substantially due to the sum insured of individual annuity insurance drop. Core operating profit Core operating profit decreased by 3.5 bn yen y/y to 1.7 bn yen because of the additional reserve of 12.6 bn yen (5.6 bn yen increase y/y) to achieve the standard underwriting reserve. Core operating profit before additional reserve would be 14.4 bn yen, an increase of 2.1 bn yen y/y. Topics In September 2006, Tokio Marine & Nichido Life reinforced its capital by 50 bn yen in order to accomplish the following. To strengthen financial bases to concentrate management resources for the achievement of the mid-term corporate strategy. As reserves for interest-rate fluctuation risk in preparation for the change in the accounting system. To improve the reliability by strengthening the financial base and aiming to achieve standard underwriting reserves.

11 Tokio Marine & Nichido Financial Life FY2006 results Tokio Marine & Nichido Financial Life (unit : bn yen) (ANP: Annualized New Premiums) New policies In-force policies Number of policies Sum insured ANP Number of policies Sum insured ANP FY2005 FY2006 Y on Y changes Y on Y Individual insurance % % Individual annuity 64, % 184, , % Total 65, % 184, , % Individual insurance % % Individual annuity % 1, % Individual insurance % % Individual annuity % % Total % % Individual insurance 44, % 42,929-1, % Individual annuity 87, % 268, , % Total 132, % 311, , % Individual insurance % % Individual annuity % 1, , % Individual insurance % % Individual annuity % % Total % % Premium income Operating expense Ordinary profit Net income Core operating profit Solvency margin ratio % 1, % % % % 744.6% 10 New policies The sum insured of new policies for individual annuity, a core product line, reached 1,082.3 bn yen, which is an increase of 149.0% y/y, due to the substantial increase in over-the-counter sales which is supported by an increase in the number of allied financial institutions and product competitiveness. Core operating profit, net income Core operating profit is minus 4.9 bn yen, due to the heavy burden of business expenses, including agent commission. This increased by 10 bn yen y/y due to the rise in profit-earning capability with the expansion of in-force policies in accordance with the increase in new policies. Net income for FY06 is minus 19 bn yen due to the increased underwriting reserve in accordance with the rise in new policies. This improved 3.2 bn yen y/y, reflecting the improvement of the core operating profit. Solvency margin ratio In FY06, Tokio Marine & Nichido Financial Life started to use reinsurance to cope with the growing minimum guarantee risks in line with the increase of polices in force. Also, Tokio Marine & Nichido Financial Life reinforced its equity capital by 20 bn yen. With the risk control measures and capital reinforcement above, the solvency margin ratio increased by points y/y to 744.6%.

12 Millea group FY2006 consolidated results: P/L (unit : bn yen) FY2005 FY2006 Y on Y changes Y ony Ordinary income 3, % 4, % Net premiums written 1, % 2, % Life premium income % 1, % Investment income % % Ordinary expenses 3, % 4, % Claims paid 1, % 1, % Commissions % % Claims paid for life insurance % % Loss reserves % % Underwriting reserves % 1, % Investment expenses % % Administration costs % % Ordinary profit % % Extraordinary profit/loss % Net income % % * Life premium income figures are consolidated, which equal non-consolidated premium income less the surrender premium of life insurance companies 11 Ordinary income Net premiums written of non-life insurance grew by 8.6% to over 2 trillion yen, supported by increased sales in Tokio Marine & Nichido, brisk performance of overseas subsidiaries, and contributions by newly consolidated companies. Premium income of life insurance jumped sharply by Tokio Marine & Nichido Financial Life s sales increase of variable annuity products. Investment earnings increased mainly due to the increase in interest from dividends and dividends received. Ordinary profit and net income Ordinary profit and net income increased, despite an increase of ordinary expenses such as an increase in underwriting reserves in accordance with an increase of premium income, increase in claims paid due to natural disasters, and increase in expenses by newly consolidated companies. The backlash effect of a return of a substitutional part of the Employees Pension Fund in FY05 caused relatively small net income compared to ordinary profit. The composition of ordinary income and ordinary profit for each business unit (composition of ordinary income and ordinary profit from transactions with external customers on the segment information) Ordinary income Non-life 62.9% Life 36.1% Others 1.0% Ordinary profit Non-life 108.3% Life -11.0% Others 2.7% Floating bar from FY05 to FY06 Net income of FY06 Claims paid for Life Extraordinary gain/loss Commission Administration cost Claims paid Underwriting reserve Others Loss reserve Interest and dividend Net premiums written Life premium income Net income of FY (unit : bn yen)

13 Millea group analysis: comparison with TM&N Comparison between Millea group and Tokio Marine & Nichido (unit : bn yen) FY2005 FY2006 Y on Y Millea TM&N rario Millea TM&N rario Millea TM&N Net premiums written 1, , , , % 1.9% Ordinary profit % -5.9% Net income % -21.1% Relation between Millea group and Tokio Marine & Nichido Net income Millea consolidated 93.0 bn yen Tokio Marine & Nichido 96.4 bn yen Other consolidated subsidiaries Investment income under equity method Amortization of goodwill Accounting method Intragroup elimination 14.0 bn yen 0.1 bn yen 2.4 bn yen 4.5 bn yen 15.5 bn yen 12 Net premiums written Tokio Marine & Nichido achieved an increase in net premiums written. In other consolidated subsidiaries, newly consolidated subsidiaries and increased revenue from all of the other subsidiaries, especially reinsurance, caused the consolidated / nonconsolidated ratio to increase. Ordinary profit and net income The ordinary profit of Tokio Marine & Nichido decreased due to the impact of natural disaster losses and the decrease in sale of business related stocks. In other consolidated subsidiaries, the ordinary profit in overseas insurance companies increased overall due to a decrease in losses incurred from natural disasters in the previous fiscal year, and profitability in Tokio Marine & Nichido Financial Life improved. For these reasons, the ordinary profit of consolidated results (Millea group) was greater than that of non-consolidated results (Tokio Marine & Nichido). The decrease in the differences between the accounting methods; purchase and pooling of interests methods, was also one of the factors behind the consolidated / non-consolidated ratio increase. On the other hand, the net income of Tokio Marine & Nichido was greater than that of Millea group, partly due to the tax burden related to subsidiaries. Relation between Consolidated Results (Millea group) and Non-Consolidated Results (Tokio Marine & Nichido) Consolidated results of Millea group are calculated from the non-consolidated results of Tokio Marine & Nichido, by adding the results of other consolidated subsidiaries and equity earnings (losses) of consolidated subsidiaries, and then adjusting for consolidation (amortization of goodwill, deduction of differences between the accounting methods: purchase and the pooling of interests methods, and elimination of intragroup transactions). Accounting Method = Differences between the purchase method and the pooling of interests method in the business combination. In 2002, Tokio Marine completed its business combination with Nichido Fire by way of the creation of a holding company, Millea HD. The combination was accounted for by the purchase method in a manner that Tokio Marine had acquired Nichido Fire. Then the assets that used to be owned by Nichido Fire were recorded at fair value on the merger date, generally higher than their "cost", in Millea's consolidated accounting. On the other hand, when Tokio Marine and Nichido Fire were merged in 2004, the historical costs of both companies' assets were succeeded by the "new" Tokio Marine & Nichido. Accordingly, because of the difference of the booked value of the former Nichido Fire assets, Millea's capital gains of the assets which used to be assets of Nichido Fire should be smaller than those of Tokio Marine & Nichido when selling such assets. Amortization of Goodwill = An accounting item of a consolidated balance sheet representing the difference resulting from offsetting the amount of parent company s investments with that of a subsidiary s net assets (so called "Goodwill"). A goodwill should be accounted on the debit column in case that parent company s investments are larger than the subsidiary s net assets and a negative goodwill should be accounted on the credit column in case that parent company s investments are smaller than the subsidiary s net assets. As goodwill is required to be amortized within 20 years under the current legislative measures, amortization of goodwill is posted in a consolidated profit & loss statement. For FY06, Millea HD posted 2.4 bn yen of profit (net of amortization of goodwill and that of negative goodwill) as amortization of goodwill, of which the major contents are as follows: -The difference between the consolidated net asset value of Nichido Fire at the time of Millea HD s inauguration and Nichido Fire's market capitalization calculated by stock price quoted in the market on the business day just before the announcement of the stock conversion ratio for business integration. -The difference between the purchase price and net assets when acquiring TMN Financial Life. -The difference between the purchase price and net assets when acquiring Real Seguros SA. The investment gain/loss under the equity method also includes the amortization of goodwill relevant to our equity method subsidiaries.

14 Millea group analysis: impact of major group companies Ordinary income Net income *1 'Net income after amortization of goodwill' is the sum of the net income of each subsidiary added &/or subtracted by the 'accounting method', 'amortization of goodwill' and 'tax effect of undistributed earning' *2 Figures for Nisshin Fire are included into the investment gain/loss of equity methods (unit : bn yen) Net income after amortization of goodwill Tokio Marine & Nichido Nisshin Fire (2nd half only) Tokio Marine & Nichido Life Tokio Marine & Nichido Financial Life Overseas insurance subsidiaries Financial business General businesses The net income after amortization of goodwill Tokio Marine & Nichido Net income for FY06 after amortization of goodwill exceeded that of the non-consolidated results (Tokio Marine & Nichido) due to the negative goodwill which was capitalized when Tokio Marine and Nichido Fire integrated management (when Millea Holdings was established) though there was a decrease caused by the difference between the purchase method and the pooling of interest method. Nisshin Fire Net income for FY06 after amortization of goodwill was smaller than that of the non-consolidated results due to the decrease caused by the difference between the purchase method and the pooling of interest method, despite the negative goodwill which was capitalized when Tokio Marine and Nichido Fire integrated management. Tokio Marine & Nichido Financial Life Due to the amortization of goodwill accounted at its acquisition, the net income of Millea Holdings was smaller than the net income of Financial Life (or the net loss of Millea Holdings after amortization of goodwill was larger than that of Financial Life). Overseas insurance subsidiaries Due to the accumulated profit tax effect such as Tokio Millennium Re and the amortization of goodwill accounted at the acquisition of Real Seguros in Brazil, the net income of Millea Holdings after amortization of goodwill was smaller than that from before the amortization.

15 Millea group FY2006 consolidated results: B/S (unit : bn yen) subject FY06 changes subject FY06 changes Cash, deposit and savings Underwriting funds 10, ,086.3 Monetary receivables bought 1, Bonds issued Securities 12, ,699.1 Reserve for retirement benefits Loans Deferred tax liabilities Tangible fixed assets Negative goodwill Intangible fixed assets Others 1, (Goodwill) (26.7) (2.1) Total Liabilities 13, ,766.5 Deferred tax assets Common stock Others 1, Capital surplus Retained earnings 1, Treasury stock (Total stockholders' equity ) (1169.1) (-16.4) Unrealized gains on securities, net of tax 2, Others Total Net Assets 3, Total Assets 17, ,966.9 Total Liabilities and Net Assets 17, , Total assets Total assets increased by 2,966.9 bn yen to 17,226.9 bn yen due to the sales increase in TMN Financial Life and additional assets of newly consolidated companies such as Nisshin Fire and Asia General Holdings Group. Assets Monetary receivables bought Increased mainly due to additional investment of commercial papers by Tokio Marine & Nichido. Securities Increased due to assets increase of Tokio Marine & Nichido Financial Life in accordance with its incremental sales and increase in assets held by newly consolidated subsidiary, Nisshin Fire. Liabilities Underwriting funds Increased mainly due to the increase in underwriting reserves for incremental insurance premiums and effect of newly consolidated subsidiaries. Deferred tax liabilities Increased mainly due to the rise of market value of securities held by Tokio Marine & Nichido caused by price increases in the stock market. Net assets Unrealized gains on securities, net of taxes In Tokio Marine & Nichido, increased due to the rise in the stock market which impacted 'unrealized gain/loss on available for sale securities', or listing of Aozora Bank.

16 FY2007 projections Non-life insurance business (unit : bn yen) Tokio Marine & Nichido Nisshin Fire Total changes Y on Y changes Y on Y changes Y on Y Net premiums written 1, % % 2, % Underwriting profit % % Investment income % % % Ordinary profit % % % Extraordinary profit/loss Net income % % % Loss ratio 61.9% 0.3% 60.8% -1.3% 61.8% 0.2% Expense ratio 31.2% 0.5% 36.7% 0.3% 31.6% 0.5% Combined ratio 93.1% 0.8% 97.5% -1.0% 93.4% 0.7% 15 Tokio Marine & Nichido Net premiums written: Net premiums written is expected to increase by 1.2% mainly due to the increase in fire insurance for corporate, and increase in auto insurance for new policies or effect of terms & conditions revision in Dec Loss ratio: The loss ratio is expected to deteriorate by 0.3%, due to the increase in damage investigation expenses in line with the enhancement of claims service divisions, or net claims paid for auto insurance, despite the decrease in the losses incurred from natural disasters compared with the previous period. Expense ratio: The expense ratio is expected to deteriorate by 0.5% due to the increase in expenses related to implement proper business operations. Underwriting profit: Underwriting profit is expected to grow by 34 bn yen, with the decrease of contributions to the reserve for outstanding claims for natural disasters or large accidents as well as increased sales, despite the deteriorated loss ratio and expense ratio. Investment income: Investment income is expected to decrease by 33.3 bn yen, mainly due to the backlash of capital gain caused by the listing of Aozora Bank in FY06. Net income: Net income is expected to grow by 23.5 bn yen, due to the increase in extraordinary gain by 45.9 bn yen caused by the shift of employees pension from a defined benefit pension plan to a 401k in FY07. Nisshin Fire Underwriting profit: Net premiums written is expected to grow slightly by 1.3 bn yen. Underwriting profit is expected to improve due to the decrease in the effect of natural disasters (minus 700 mil yen) and the decrease in statistical IBNR reserve (minus 2.8 bn yen). Investment income: Investment income is expected to be the same level as the previous period. Net income: Net income is expected to improve corresponding to the increase in ordinary profit. Net premiums written Tokio Marine & Nichido Nisshin Fire Total FY06 FY07 projections FY06 FY07 projections FY06 FY07 projections changes changes changes Fire % % % Marine % % % P.A % % % Auto % % % CALI % % % Others % % % Total 1, , % % 2, , %

17 FY2007 projections Domestic life insurance business Tokio Marine & Nichido Life Embedded value is expected to grow steadily in FY07, which has been taken as principle management indicators for the life insurance business. Tokio Marine & Nichido Financial Life Embedded value is expected to grow to bn yen in FY07 with appropriate management of minimum guarantee risk using reinsurance, in line with business expansion. Embedded value (FY) projection projection FY03 FY04 FY05 FY06 ANP of new policies individual insurance capital increase (bn yen) FY07 projection (bn yen) individual annuity Embedded value capital increase FY04 FY05 FY06 Single premium of variable annuities 1,200 1, , FY04 FY05 FY06 (bn yen) FY07 projection (bn yen) FY07 projection 16 TMN Life Highlight of earnings projections for FY07 ANP for new policies are expected to decrease by 29.1 bn yen, as sales contributions from new products in FY05 are expected to fade out, and sales of the mainstay product of individual annuity Anshin Dollar Annuity is expected to decline, reflecting a weaker yen. The embedded value for FY07 is expected to grow 22.7 bn yen from bn yen to bn yen and continue to grow steadily. ( unit : bn yen ) FY03 FY04 FY05 FY06 FY07 projections EV at the year end of FY Increase/decrease of EV Increase/decrease of EV * ANP of new policies excluding effects of the changes of interest rates, preconditions, and increase of capital TMN Financial Life Highlight of earnings projections for FY07 The increase of EV in FY07 is 13.1 bn yen, and the corporate value is growing steadily. The EV at the end of FY07 is expected to be bn yen. The single premium of variable annuity is expected to decrease to 800 bn yen, due to intensified competition with products from other companies. (unit : bn yen) FY2004 FY2005 FY2006 FY2007 projections EV at the end of FY Increase/decrease of EV excluding capital injections Increase/decrease of EV * * excluding the differences between actual and assumed investment performance, changes of preconditions, capital increases, subordinated loans, and the effects from reinsurance on policies in past fiscal years Explanation of EV Embedded Value see page 19 Reference Other earinings projections for FY2007 Ordinary income bn yen Premium income bn yen Ordinary profit 6.1 bn yen (16.0 bn yen) Core operation profit 0.7 bn yen (10.6 bn yen) Net income 0 bn yen ( 6.3 bn yen) ( ) before statutory reserves Reference Other earnings projections for FY2007 Ordinary income bn yen Premium income bn yen Ordinary profit -4.0 bn yen Core operation profit -0.2 bn yen Net income -4.0 bn yen

18 FY2007 projections Millea group consolidated (unit : bn yen) FY2005 FY2006 FY2007 projections Y on Y Y on Y changes Y on Y Ordinary income 3, % 4, % 4, % Ordinary profit % % % Net income % % % FY2005 FY2006 FY2007 projections annual interim year end annual interim year end annual interim year end Dividends per share * 30 yen 30 yen 36 yen 15 yen 21 yen 36 yen 18 yen 18 yen * calculated after share-split Differences between performance in FY06 and the projection in FY07 Ordinary income The ordinary income is expected to decrease by 4.7% due to the decrease in sales in Tokio Marine & Nichido Financial Life which have increased substantially in the previous period, and despite brisk overseas insurance subsidiaries, newly consolidated Asia General Holdings Group, and full-term contributions by Nisshin Fire. Ordinary profit Ordinary profit is expected to increase by 7.7% due to the decrease in agents fees in Tokio Marine & Nichido Financial Life, improved profitability in line with the increase in policies in-force, and brisk overseas insurance subsidiaries. Net income In addition to the factors in ordinary profit, substantial extraordinary gain is recognized by the shift of the employees pension plan to a 401k in Tokio Marine & Nichido. For these reasons, net income is expected to increase by 47.3%.

19 Millea group adjusted earnings Business domains FY2005 FY2006 revised projections FY2006 (unit : bn yen) FY2007 projections Domestic non-life insurance Tokio Marine & Nichido Nisshin Fire Domestic life insurance TMN Life TMN Financial Life Others 0.2 Overseas insurance Asia North & Middle America Europe, Africa, Middle East South America Others Reinsurance Finacial & General businesses Group total Adjusted ROE 3.7% 4.0% 3.8% 3.4% * The figure for FY05 domestic life 34.6 bn yen is shown on a basis excluding the effects of changes of preconditions, interest rates, etc. 18 Results of FY06 (Compared with FY06 revised projections) Profits in the domestic non-life insurance business decreased due to the impact of incurred insurance claims for natural disasters such as Typhoon No. 13, and profits in the domestic life insurance business dropped due to the sales decrease over the projection. On the other hand, profits in the overseas insurance business increased helped by the profit rise in reinsurance without huge natural disasters. These resulted in the increase in adjusted earnings of the Group total by 1.8 bn yen to bn yen. Projections for FY07 (Compared with the results of FY06) Domestic non-life insurance Profits in domestic non-life insurance are expected to drop by 0.4 bn yen to 88.6 bn yen due to increased expenses for business standardization, etc., despite the increase in net premiums written. Domestic life insurance Profits in domestic life insurance are expected to drop by 12 bn yen to 36.1 bn yen due to the increase in expenses for infrastructure improvements such as system development, and the decrease in contracts of new policies. Overseas insurance Business is developed continuously with expanding business infrastructure, although profits in overseas insurance are expected to drop by 0.7 bn yen to 27.8 bn yen in comparison with FY06 in which we had a good performance. Financial & General businesses Profits in the financial & general businesses are expected to remain at the same level as in FY06, 3.6 bn yen.

20 Reference Definition of adjusted earnings 'Adjusted earnings' is used by Millea group as a benchmark for forming business plans and returns to shareholders. Figures represent the income or losses for the period and exclude the impact of reserves unique to a non-life insurance business, or an item with a source that is not necessarily ordinary, such as gains/losses on disposal/appraisal of assets. Also, as with the case of life insurance businesses, income or loss items that are recognized and accounted at a later date are represented by translating the increase in embedded value as a profit for the term, which allows the result of investments and other efforts to be easily understood. Domestic non-life insurance business Net income Provision for catastrophe reserve *1 Provision for reserves for price fluctuation *1 Gains/losses from assets under ALM *2 Gains/losses from stocks and properties + + Other extraordinary items Life insurance business Other businesses EV at the end of the previous fiscal year *3 Overseas non-life insurance business Increase in EV *3 EV at the end of the fiscal year *3 Net income shown in financial statements minus overhead cost for overseas business cf. Earnings of life insurance business in Brazil based on this scheme Net income shown in financial statements *1 Negative figures in case reversal of catastrophe reserve or reserves for price fluctuation *2 ALM: Asset Liability Management Realized and unrealized gain/losses arising from bond securities and interest rate swap transactions utilized in ALM *3 EV: See NOTE for this page 19 Adjusted ROE = Adjusted earnings Reserve for price fluctuation Catastrophe reserves Total Net Asset in B/S Domestic non-life insurance business Average EV during the fiscal year (Embedded Value) Life insurance business Total Net Asset in B/S Overseas non-life insurance Other businesses * average capital of the beginning and end of the fiscal year and after tax basis EV = Embedded Value A valuation and performance evaluation method used by life insurance companies around the world. It is computed as the sum of net asset value and the value of in-force policies. Net asset value is calculated as the sum of net assets (under the Shareholders Equity Section of the balance sheet), and reserves for contingency and price fluctuation (both before tax), which are considered appropriate to be added to net assets. The value of in-force policies is calculated as the discounted present value of stockholders income available for dividends, which is the expected future Current Income (after tax) less the necessary amount required as retained earnings to maintain a certain solvency margin ratio.

21 Millea group long-term strategy Millea group aims to to become a globally top-tier insurance group Domestic non-life insurance Offering new products and services beyond concepts of traditional insurance Domestic life insurance Responding to the expansion of endowment insurance and annuity markets due to low birthrate and longevity Overseas insurance Actively expanding life and non-life insurance business (incl M&A) in Asia, BRICs, Europe, and US Financial & general businesses Achieving a synergy effect with insurance business by expanding peripheral business FY2005 ROE3.7% By FY2015 ROE over 8% 6% Adjusted Adjusted earnings earnings TRIPLED Adjusted Adjusted ROE ROE 25% 65% DOUBLED Well-balanced Business portfolio 20% 25% 10% 20% 25% 40% 50% Domestic Non-life Overseas Domestic Life Financial & General 20 Numerical objectives for the mid-term corporate strategy FY06-08 as milestones for the long-term target Improvement of profitability FY2005 Adjusted earnings bn yen Adjusted ROE 3.7% 37% increase 35% increase FY08 projections 190 bn yen 5.0% Improvement of balance of portfolio FY2005 Weight Domestic Non-life 91.5 bn yen 65% Domestic Life 34.6 bn yen 25% Overseas 7.7 bn yen 6% Financial & General 4.9 bn yen 4% All amounts of all domains increase FY08 projections Weight 120 bn yen 63% 40 bn yen 21% 25 bn yen 13% 5 bn yen 3%

22 Capital management strategy Our belief is that financial strength is the foundation of our insurance business We also aim to achieve the optimal combination of financial strength and capital efficiency We will also aim to conduct business investments and share repurchases using our excess capital Flow Earnings Excess Capital Several hundred bn yen as of Mar Allocate normalized earnings to distribute to shareholders Invest in businesses with good profitability and growth prospects Stock (adjusted shareholders' equity) Minimum capital requirement Risk capital Amount of capital required to continue business after risks materialize Required capital Measured risk exposures such as underwriting risks and asset management risks in quantitative ways with 99% shortfall 21 Business investment policy Excess capital (stock), amounts exceeding the required capital, is used to invest in businesses that have high growth potential and high profitability. This is the key to the group's growth. Track of business investment unit : bn yen FY02 FY03 FY04 FY05 FY06 Total Business investments Domestic non-life Domestic life Overseas Financial General Trend of adjusted earnings unit bn yen, % FY02 FY03 FY04 FY05 FY06 Domestic non-life % % % % % Domestic life % % % % % Overseas 3.5 3% 7.0 4% 4.8 9% 7.7 6% % Financial 0.7 1% 0.7 0% 1.7 3% 3.9 3% 2.8 2% General 0.3 0% 0.6 0% 1.4 3% 1.0 1% 0.9 1% Total % % % % % Figure of FY05 domestic life 34.6 bn yen is shown on a basis excluding the effects of changes of preconditions, interest rates, etc.

23 Return to shareholders Total amount of average adjusted earnings of 120 bn yen are distributed to shareholders Dividends Stable profit-sharing with shareholders FY06 dividends Interim dividends per share 15 yen (12.5 bn yen in total) Dividends at FY end 21 yen (17.2 bn yen in total) FY06 dividends 36 yen (29.8 bn yen in total) Share repurchases Flexible profit-sharing with shareholders June February 2007 Total amount repurchased (19.72 million shares 85.0 bn yen * excluding the stock exchange with Nisshin Fire: 57.8 bn yen (14.00 million shares) Basic concept Aim to increase the pay-out ratio (dividends total / averaged adjusted earnings) by up to 30% June June 2008 Annual limit to repurchase 90.0 bn yen 11.5% of 928,524,375 shares, the issued shares as of Apr when Millea HD was established, have been repurchased for the purpose of returns to shareholders and most of them have been cancelled. Continue top-level returns to shareholders among listed companies in Japan 22 Returns to shareholders unit:bn yen projections Total amount Dividends to shareholders Share repurchases Figures for 2001 & 2002 are the sum of Tokio Marine and Nichido Fire Amounts of share repurchases are based on the terms from AGM(June) to AGM(June) Trend of pay-out ratio 40% 30% 20% 19% 20% 19% 23% 25% 30% 10% FY02 FY03 FY04 FY05 FY06 after FY07 Dividends FY02 FY03 FY04 FY05 FY06 Per share *1 (yen) Total amount (bn yen) Average adjusted earnings (bn yen) Pay-out ratio *2 19% 20% 19% 23% 25% *1 Figures for 2003/3-2006/3 are shown on a basis after share-split *2 Based on average adjusted earnings Cancellation of repurchased shares Shares cancelled (ten thousands) Amount cancelled (million yen) Treasury stocks (ten thousands) Date Before cancel Shares cancelled After cancel Cancel ratio 2004/7/9 3,500 91,591 4,219-3, % 2005/3/14 3,000 88,252 3,281-3, % 2006/3/28 2,000 70,119 2,329-2, % 2007/3/19 1,900 80,629 2,018-1, % Total 10, ,591

24 Part 2 To restore public confidence Cause of recent problems in non-life insurance business Preventative measures in non-life insurance Establishment of mid- to long term growth foundation by Business Renovation Project Survey on payment of insurance claims by life insurance companies Preventative measures for non-payment and mis-payment of insurance claims Non-life insurance-tokio Marine & Nichido: Future plans Non-life insurance-tokio Marine & Nichido: Auto insurance Non-life insurance-tokio Marine & Nichido: Commercial market Non-life insurance: Existing agents & proper business operation Over-the-counter business at financial institutions: Future plans Privatization of Postal Service: Future plans Asset management-tokio Marine & Nichido: Absolute return investment & effect of interest rate and exchange rate Basic policy & overview of absolute return investment Tokio Marine & Nichido Life: Future plans Tokio Marine & Nichido Financial Life: Sales strategy & risk control Overseas insurance business: Continuous enhancement of premium income Overseas insurance business: Continuous enhancement of adjusted earnings Overseas direct insurance business: Future plans Overseas reinsurance business: Current status & future plans Financial businesses: Current status & future plans Millea group companies, ratings, market cap, stockholders

25 To restore public confidence Cause of recent problems in non-life insurance Problems Non-payment of insurance claims (additional insurance combination ) Inappropriate nonpayment of third sector insurance Non-payment of various refunds Mis-application of discount in fire insurance Causes Products Too sophisticated product line-ups Too sophisticated product contents Too frequent revision of products and rules Rules & administration Insufficient underwriting manual Insufficient calculation system System Underwriting Payment of claims Insufficient system check regarding insurance claim payment Insufficient system regarding checking contract details or reference of clauses Insufficient explanation to contractor (insured person) Insufficient application of rules regarding solicitation Not strict application of rules Insufficient manual for insurance claim payment Not strict application of manual 24 Details Accumulated number Amount Sep. 30, 2005 Nov. 25, 2005 FSA issued report requirement order regarding non-payment of collateral insurance claims Tokio Marine & Nichido, Nisshin Fire FSA issued business improvement order to 26 non-life insurance companies Tokio Marine & Nichido, Nisshin Fire TMNF Tokio Marine & Nichido NF Nisshin Fire Payment of insurance claims Non-payment of collateral insurance claims July 13, 2006 Sep. 29, 2006 Nov. 17, 2006 Dec. 8, 2006 Mar. 30, 2007 July 14, 2006 Business improvement plan submitted to FSA Tokio Marine & Nichido, Nisshin Fire Report submitted to FSA on follow-up investigation Tokio Marine & Nichido, Nisshin Fire FSA issued report requirement order regarding investigation completion timing on non-payment of collateral insurance claims Tokio Marine & Nichido, Nisshin Fire Report submitted to FSA acknowledging completion by the end of Mar. '07 Tokio Marine & Nichido, Nisshin Fire TMNF 84,785 cases TMNF 6,854 million yen Report on survey result submitted Tokio Marine & Nichido, Nisshin Fire NF 14,422 cases NF 867 million yen FSA issued report requirement order regarding payment of third sector products Inappropriate nonpayment for third sector products Oct. 31, 2006 Mar. 14, 2007 Apr. 13, 2007 Report submitted to FSA Tokio Marine & Nichido, Nisshin Fire FSA imposed administrative penalty on 10 non-life insurance companies including Tokio Marine & Nichido and Nisshin Fire, regarding non-payment of third sector products Suspension of conclusion and solicitation of contracts for third sector products (3 months: Tokio Marine & Nichido) Suspension of application for approval or registration of third sector product contracts (3 months: Tokio Marine & Nichido, 1 month: Nisshin Fire TMNF 1,190 cases TMNF: 391million yen Business improvement plan submitted to FSA (Tokio Marine & Nichido, Nisshin Fire) NF 54 cases NF 103 million yen Underwriting of insurance contracts Check regarding appropriate solicitation of fire insurance Dec. 20, 2006 Mar. 30, 2007 FSA required inspection on the accuracy of the fire insurance solicitation system Report on survey result of simultaneous check of fire insurance submitted TMNF 26,979 cases TMNF 2,020 million yen At each contract renewal, a survey and check are currently conducted regarding the appropriateness of the contract details by the end of May '08. NF 2,812 cases NF 169 million yen

26 To restore public confidence Preventative measures in non-life insurance Maintaining high quality of business (e.g. thoroughly implementing business renovation projects or business improvement plans) Continuous fostering of human resources Enhancement of communications between customers or agents Persistent activities Thorough confirmation of customer s intention at the time of contract closing by using confirmation document for contract details, in response to the 'suitability rules' Conducting survey and check for appropriateness of contract details at renewal and other opportunities (by end of May 2008 Responding to administrative penalty on third sector Progressing training and taking certifications Completing payment of inappropriate nonpayment for third sector products (by end of May 2007 Efforts for a Dependable Recovery Restoration of public confidence End of July, 2007 End of May, Enhancement of managing system from external viewpoints, e.g. customers 2 external members as representative of customers for the Business Quality Improvement Committee Enhancement of compliance committee s supervision function by having the majority consist of external members Increase of number of external auditors Enhancement of framework for finding problems [Voice of customers] external indication Establishment customers voice department Creation of consumer monitor system and expansion of agent monitor system [Internal audit] internal indication Increase in number of internal auditors Enhancement of internal audit for insurance claim payment division, and improvement of audit for agents Enhancement of management for insurance claim payment Review of business process by the new system support Fundamental review of reexamination request system Increase number of staff in insurance claim payment division Review of rules and manuals to conduct appropriate business management Enhancement of solicitation system Development of quality criteria for solicitation Taking certifications for insurance solicitor Creation of sales qualification system unique to Tokio Marine & Nichido Thorough confirmation of customer s intention at the time of contract closing using Anshin Map (confirmation document for contract details)

27 Outline To restore public confidence Establishment of mid- to long-term growth foundation by Business Renovation Project Significant improvement of service quality and increase of business efficiency Reform of agent system and innovation of business process to enable business operations to be conducted in a cashless manner Significantly simplifying contractual conditions and supplementary contracts Reform and simplification of the core IT system Effects of business curtailments at the company and agents are 10% to 30% Product lineup halved as a result of unification 30% improvement in system development efficiency FY07 plans Revise the developing schedule to improve business operations thoroughly and accordingly implement the enforcement of the claims payment management system and underwriting management system prior to the Business Renovation Project Steady development of the project Policies booked at agents 91.1% 94.7% Cashless premium payments 42.1% 75.1% Early rollover of policies 29.4% 50.7% Improvements since April 2005 examples of auto insurance Making policies promptly and correctly Level peaks of workload of booking policies Spare time for employees and agents Improve the efficiency of existing administrative tasks Improve the ratio of keeping renewal policies Spare time for consulting sales cf. early rollover of policies complete renewal procedures of policy by four weeks before its renewal date 26 Outline of project Fully adopting IT systems for business operations (accounting operation, premium estimates, application forms and others) at agents based on efficient business support using agent system, and sparing the task of collecting premiums and administrative work by making business operations fully cashless through the promotion of credit-card payments and the full-scale introduction of payment systems at convenient stores. Making product lineup easy to understand and simplifying clerical work by curtailing, unifying and simplifying product lineup and supplementary contracts. Downsizing main-frame systems in order to significantly improve system development efficiency in the future. Establishment of infrastructure to ensure proper business operations Analyzing problems that have been reported in each business process, from the time of insurance contracts to the time of claim payments, and consider incorporating a mechanism for preventing such problems into the project. Making business operations transparent in view of the need to ensure information security, protect personal information, respect SOXrelated law and observe compliance by implementing the Business Renovation Project and improving service quality at the Company and agents. Revising the developing schedule to improve business operations thoroughly and accordingly implement the enforcement of the claims payment management system and underwriting management system prior to the Business Renovation Project. Cost Initial costs for the Business Renovation Project are estimated at about 63 bn yen, covering a five-year period between FY2006 and FY2010. previous estimation was about 60 bn yen in four years (Costs for a three-year period covered under the Medium-Term Corporate Strategy are estimated at about 38 bn yen) Schedule of Business Renovation Project FY06 FY07 FY08 FY09 FY10 Conduct proper business operation Improvements of business quality Reform of infrastructure Reform of the core IT system Reform of agency system Innovation of Auto Innovation of Fire & Others Implemented simultaneously with the Business Renovation Project * Operating expense : 32 bn yen Business Renovation Project * Initial cost : 63 bn yen Effects of reducing operating expenses About 8 bn yen is expected to be saved yearly after the project is completed.

28 To restore public confidence Survey on payment of insurance claims by life insurance companies Survey On Feb. 1st, 2007, FSA issued a report requirement order based on article 128, section 1 of the insurance business law. We checked whether there were non-payment, mispayment, or non-suggestion for request on all cases (total 202,093 cases) in which insurance claims have been paid from FY01 to FY05. non-payment and mis-payment 1,026 cases 136 mil yen (1) Insurance claim and benefit (2) Various refund and other 931 cases (135 mil yen) 95 cases (1 mil yen) Result Other 22% 20% Insufficient payment of hospitalization benefit 58% Insufficient payment of operation benefit Miscalculation in manual process 31% 69% Miscalculation by system failure Cases in which non-suggestion for request is possible 2,036 cases We found 2,036 cases in which the "customer may be qualified for insurance claim or benefit, with suggestion by us". Note: The above is the result of a survey in TMN Life only. In addition to this, there are 5 cases with 0.4 million yen of insufficient payment (2 cases of insufficient payment of operation benefit: 0.2 million yen, 3 cases of insufficient payment of surrender value: 0.2 million yen) in TMN Financial Life (no non-suggestion for request cases) 27 Non-payment and mis-payment Following the completion of this survey, we have completed all additional payments of insurance claims and benefits, except cases where payment was difficult for specific reasons (e.g, customer cannot be located, etc.). Refunds will be paid completely by the end of June As of May 16, 965 cases out of 1,026 have been completed (completion rate is 94.0%)) Non-payment' and 'mis-payment' cases Completed cases among the left column Number of cases Amount (mil yen) Number of cases Amount (mil yen) Completion ratio Insurance claims % Benefits % Various refunds % Total 1, % Non-suggestion for request We have located 2,036 cases in which customer may be qualified for claims with our suggestion. We will make suggestions to customers taking a matter of disease name notification into consideration, and will complete all payment by the end of September 2007, except for the cases with specific reasons, such as where the customer cannot be located.

29 To restore public confidence Preventative measures for non-payment and mis-payment of insurance claims Causes <Major preventative measures> Insufficient framework (staff, training, system, or checking system, etc.) in line with the substantial increase in the number of claims or environmental changes (e.g. more professional medical knowledge or experience becomes necessary for appropriate payment of insurance claims of third sector products) 1. Recruiting staff and enhancement of training system Improve framework [this will be maintained in the future] 2. Enhancement of check system Establishment of payment deliberation team [in Mar. 06] Establishment of administrative group in customer service department [in Nov. 06] Building framework of follow-up checks for cases in which payment was rejected [in Nov. 06] Establishment of payment examination board [Nov. 06] 3. Enhancement of suggestion system for requests Improvement of suggestions to customers [ongoing] Establishment of request encouraging team (tentative name) [Oct. 07] 4. Improvement and enhancement of system Enhancement of existing system [ongoing] Renewal of system [FY08-FY09] 5. Enhancement of management involved Establishment of claim payment management committee (tentative name) as subcommittee of the board [FY07-] Further improvement of internal audit [FY07-] 6. Enhancement of framework for development and revision of products Establishment of product development and revision meeting [Jan. 07] 7. Enhancement of response to customers demands Establishment of customers voice division [Nov. 06] Establishment of insurance claim counseling section and expanding its function [established in Feb. 07] [function will be expanded from FY07] Enhancement of framework to respond to objections or complaints from customers introducing counseling system by external lawyers and application for reexamination system [Oct. 07-] 28 The number of non-payments of insurance claims and benefits had increased until FY04 in line with the increase in cases of insurance claims and benefits due to the launch of third sector products in January In FY05, the number of non-payment cases began to decline as a result of various preventative measures, and the incidence rate has been dropping since FY01. Transition of 'non-payment' and 'mis-payment' number of claims payment 70,000 60,000 50,000 40,000 30,000 20,000 10, % 26, % 32, ,315 46, % 0.47% ,237 FY01 FY02 FY03 FY04 FY05 number of omissions and non-payment for claims 0.28% occurrence ratio

30 Non-life insurance-tokio Marine & Nichido: Future plans Expected net premiums written for FY07 1,951 bn yen, increase by 101.2% y/y Auto insurance: 101.6% NPW FY07 projection Unit price increase by effects of total assist switch Increased persistence rate, and improved cashless ratio Fire insurance: 103.6% NPW FY07 projection Products for corporate expansion, such as extended coverage earthquake Thorough communication Offer high quality services Expand coverage to inspire new needs by customers Extend supports for quality improvement of the existing sales infrastructure Actively develop measurements for new sales structures such as over-the-counter sales at banks or Japan Post Shift to careful management of sales infrastructure quality (from agent unit care to solicitor care Improve business quality Complete confirmation of policy holder intentions in accordance with suitability rule Completely resolve problems in underwritings Promote Business Renovation Project P26 Build infrastructure for sustainable growth Establish and foster new excellent sales base P32 Respond appropriately to over-the-counter sales at banks and Japan Post P33-P34 Offer solutions in line with corporate customers' needs P31 Enhance treatment of global customers P39-P41 Improve sales productivity of car dealer agents P30 etc. Prioritized efforts for restoration of public confidence 29 Build infrastructure for maintenance of brisk performance and sustainable growth Trend of cumulative premiums on a managerial accounting basis y/y by channels as of March 2007 Personal :100.7% Commercial :103.4% Dealer :107.3% y/y Trend of cumulative premiums on a managerial accounting basis y/y All channels stayed beyond the results of previous year constantly 100 Apr.06 May 06 Jun.06 Jul.06 Aug.06 Sep.06 Oct.06 Nov.06 Dec.06 Jan.07 Feb.07 Mar.07 Personal Commercial Dealer Sales bases in Tokio Marine & Nichido are divided into three sectors; the personal sector which deals with the sales base for individuals, the commercial sector which deals with the sales base for corporations, and the dealer sector which deals with the sales base for automobile dealer agents. Tokio Marine & Nichido conducts management and allocation of business resources, in line with the characteristics of each sector. 100

31 Non-life insurance-tokio Marine & Nichido: Auto insurance Trend of cumulative auto premiums on a managerial accounting basis y/y FY06 number of new cars sold y/y 95.9 FY06 number of cars insured y/y FY y/y FY06 Auto premium increase y/y Effect of premium discount due to improvement of accident rates and changes of policy conditions Constantly surpassing the results of the previous year FY06 average unit premium y/y Apr.06 May 06 Jun.06 Jul.06 Aug.06 Sep.06 Oct.06 Nov.06 Dec.06 Jan.07 Feb.07 Mar Substantial increase in policy retention ratio FY06 FY07 changes Policy retention ratio Auto early rollover ratio 31.7% 42.2% 10.5% Auto cashless premium payment ratio 52.1% 67.8% 15.7% 0.7 point Note: early rollover: complete renewal procedures of policy by 4 weeks prior to maturity Efforts to maintain insurance unit price Keeping effect of unit price increase by product revision in December Expecting an increase in the Total Assist proportion, which was launched in August Former product TAP Navi 20 th ranked customer Vehicle value of 1.4 m yen Covered older than 35 Gold licensed driver For daily use and leisure Without attorney clause Premium 61,230 yen approx. 5% up TOTAL ASSIST Conditions shown on the left plus various assists Attorney expense clause Ex-post accident assist including occasional driver coverage clause as a standard condition New premium 64,020 yen after the premium level revision implemented in Dec Improve sales productivity of car dealer agents Restoration of customer confidence through proper business operation is the first priority Building car dealer insurance agent business model, based on customers ground Always analyze customers recognition, to reflect it in action policies or business proposals for car dealer agents Improve quality as insurance agents in an integrated manner with car dealer agents Foster dealer agents who are able to offer values to customers 70% 68% 66% 64% 62% 60% 58% 56% 54% 52% Apr.06 May 06 Jun.06 Jul.06 Aug.06 Sep.06 Oct.06 Nov.06 Dec.06 Jan.07 Feb.07 Mar.07 Trend of the proportion of Total Assist among all auto insurance policies

32 Non-life insurance-tokio Marine & Nichido: Commercial market Brisk performance of of domestic companies and and progress of of full-scale globalization FY y/y Brisk sales sales performance of of insurance for for corporate, and and recognition of of new new risks risks for for companies Constant growth Offering solutions in in line line with with corporate customers --taking taking advantages advantages of of the the integrated integrated capability capability of of Millea Millea group group Apr.06 May 06 Trend of cumulative marine premiums on a managerial accounting basis y/y Jun.06 Jul.06 Aug.06 Sep.06 Oct.06 Nov.06 Dec.06 Jan.07 Feb.07 Mar.07 Enhancement Enhancement and and establishment establishment of of solutions solutions Sustainable growth Enhancement Enhancement of of human human resource resource development development as as a a base base Thanks to expanded international trade, brisk international water transport, and extended tonnage, hull insurance and marine cargo insurance are increasing. Hull insurance increased by 111.3%, due to the increase in development projects of oil and natural gas in the sea. Marine cargo insurance increased by 110.1%, with increases in freight to East Europe, Middle and South America and Africa, in addition to China, Asia, North America and Europe. These good performance showed the biggest increase in domestic market, which brought us a substantial increase in market share of marine insurance. 31 Recognition of new risks Overseas: Sophistication of supply chain management in accordance with globalization increased impact of business discontinuity Domestic: Establishment of Financial Products Exchange Law and New Corporation Law growing need for building framework related to internal control Common: Building framework not to cause accidents preventative measures leading to lower risks Liability indemnity information leak, IT, malpractice, D&O, PL/recall Finance (insurance) and control (consulting) Natural disasters response to huge natural disaster risk (earthquake) corporate earthquake insurance/derivatives, development of business continuity plan Enhancement and establishment of various solutions Risk consulting subsidiary consulting for system building support including BCP and internal control, various risk evaluation Medical service subsidiary Employee assistance programs (EAP), measurement against life-style diseases, call center business Facility business subsidiary Building management business, facility management business Derivative house subsidiary Fund raising support business, asset management support business Asset management subsidiary Investment advisory business, investment trust business Venture capital subsidiary Private equity investment business Assistance service subsidiary Nursing service subsidiary * see P43-P44 Enhancement of sales force base in commercial sectors Thoroughly require taking underwriting training and completing it in commercial sectors Enhance risk solution training for management staff in commercial sectors Conduct training for enhanced capability in line with globalization and strengthen English training Share information or new know-how, utilizing studying-other-department program system (open training) Conduct various training to foster a sales force of "arrangers" who use a financial approach

33 Non-life insurance: Existing agents & proper business operation Common education between agents and solicitors, and employees New support system for agents for appropriate solicitation Supporting all agents and solicitors satisfaction Solicitation minimum criteria (1)Promoting appropriate underwriting (2)No inappropriate issues related to solicitation Revise existing support system for agents unit support (about 60,000), to achieve satisfaction of 1 million solicitors by thorough education and support Further supports such as cooperation with core agents, outsourcing of administrative work, and restriction of handling products. Improve support capability of employees for agents When satisfaction is not achieved Establish new qualifications and conduct various training to provide know-how and skills. 32 Main actions by sales sector based on business improvement plan Development of solicitation quality July 2007 : develop solicitation quality criteria which should be achieved by insurance solicitors, and familiarize sales staff and agents with it. Qualification system for third sector products May 2007 : Establish an education and qualification system for employees, ahead of solicitor education for third sector product. Sales qualification system for third sector product agents May 2007 : Require all solicitors of third sector products to take training on appropriate solicitation, receipt of announcement and response to suitability rule, and to pass the exams. Education of solicitors at the time of new product launches July 2007 : Conduct training and education to solicitors at the time of new product launches. Number of agents FY04 FY05 FY06 Tokio Marine & Nichido 64,669 63,413 61,641 Industry total 286, ,753 * 253,810 FY06: preliminary stats Number of IP newly hired and agents newly set up (Personal sales divisions) FY04 FY05 FY06 Number of IPs hired Management course Employee course Number of agents set up 1,788 2,448 2,302 No. of agents passing min. mark * min.mark : general lines premium income 2 mil yen or more life & third sector premium income 10 mil yen or more Partners agents ( premium income unit: million yen) FY04 FY05 FY06 Number of newly set up (aggregate) 7(58) 8(66) 7(70 * Premium income total 12,579 16,118 18,689 % of full time agents total Average premium income * 3 mergers implemented: = 70 Number of agents & premium income weight by category (as of March 31, 2007) Number of agents % of premium income Full-time / professional agents 12, Insurance Partners * 1, Business organizations 7, Financial institutions 1, Car dealers / Manufactures 2, Used car dealers / maintenance shops 19, Others 19, Total 62, including all types of IPs * Partners agents: Among core agents who are certified by us as agents offering the best quality customer service, partner agents are agents whose president is one of our employees (including previous employees) and is funded by our group company.

34 Over-the-counter business at financial institutions: Future plans Improve customers' convenience Respond to diversification of customers' needs Full liberalization in December 2007 (projection) Expansion of over-the-counter sales market Implement comprehensive measures with our various resources establish a compliance system provide suitable insurance products support sales activities Weather derivative Third sector Variable annuity Claims adjusting service Fixed annuity Non-life insurance Millea group's comprehensive strength Human resources training Investment trust Risk consulting Life insurance 33 Expansion of market of over-the-counter sales at financial institutions Financial institutions are organizing one-stop service for diversified needs including asset management needs or endowment insurance needs, in advance of the full-liberalization of over-the-counter sales at financial institutions slated for December These will facilitate customers convenience and eventually expand the over-the-counter market for financial institutions substantially. Millea group s strategy Millea group is offering various products and services such as non-life insurance, variable annuity, fixed annuity, investment trust, 401k, and weather derivative, through business corporations including Tokio Marine & Nichido, Tokio Marine & Nichido Life Insurance and Tokio Marine & Nichido Financial Life. In addition to continuing to offer products and services by taking advantage of the integrated capability of the Millea group, we will enhance the sales support system for financial institutions. Also, we will take preventative measures against harmful effects which ban financial institutions' adverse influence on sales or tie-in sales, and continue to actively address keeping compliance for appropriate solicitation management. Number of allied financial institutions (including banks and shinkin-banks, but excluding security firms) (as of the end of March 2007) Tokio Marine & Nichido 401 TMN life 236 TMN Financial Life 90 Trend of sales results Non-life insurance (premium income of general lines on a managerial accounting basis) Unit : bn yen Financial institution channels total FY FY FY FY FY FY Life insurance (premium income basis) Unit : bn yen Fixed annuity Variable annuity FY FY FY FY FY ,042.6

35 Privatization of Postal Service: Future plans Background of public solicitation for auto insurance offering company (1) In Oct.2007, 23 post offices in the Tokyo Metropolitan area will start auto insurance sales (2) In Mar.2007, it was determined that co-insurance by 7 companies, being Tokio Marine & Nichido as a leading underwriting company (3) Tokio Marine & Nichido, in addition to support activities as a proxy application company (appointed in Aug.2006), also conducts sales support as a product offering company (a leading underwriting company) Establishment of the Japan Postal Service Division by Tokio Marine & Nichido and Tokio Marine & Nichido Life Japan Postal Service Division Tokio Marine & Nichido Cooperation and integration Japan Postal Service Division Tokio Marine & Nichido Life One-dimentional response as Millea group Japan Postal Group Japan Post Post service providers Post Office Company Yucho Bank Kampo Insurance 34 Background of solicitation for auto insurance offering company 23 post offices in the Tokyo Metropolitan area will start auto insurance sales in Oct (considering this is handled by solicitors). Phased expansion of handling offices will be considered. Public solicitation for a product offering company was held in Jan.2007, and co-insurance by 7 companies, being Tokio Marine & Nichido as managing underwriter was adopted in Mar Product details will be decided hereafter. Tokio Marine & Nichido, in addition to supporting activities as a proxy application company which was appointed in Aug.2006, will also conduct sales support as a product offering company (a leading underwriting company). Establishment of the Japan Postal Service Division As a one-dimensional response as Millea group to the privatization of postal services, both Tokio Marine & Nichido and Tokio Marine & Nichido Life will establish the Japan Postal Service Division on July 7, Both companies will integrate the divisions and cooperate with each other, and conduct a one-dimensional response to the Japan Postal Service Group.

36 Asset management-tokio Marine & Nichido: Absolute return investment & effect of interest rate and exchange rate Secure stable return for for each fiscal year and increase the value of of net assets in in the mid- to to long-term Basic policy Steadily increase surplus value (asset value minus liability value) on a marked-to-market value basis Improve ROE RORAC Strategic investments to augment relation with insurance customers. Continue to reduce the exposure to improve the overall capital efficiency Sustain the relevant liquidity position to firmly service insurance obligations while improving profitability * Other assets Stocks of subsidiaries, realestates, non-investment assets etc. B/S of Tokio Marine & Nichido (as of Mar.31, 2007) Asset for ALM 33% Absolute return investment 7% Business related equities 40% Short term funds 5% Other assets * 15% 100% Asset total 11,177.4 bn yen Saving type insurance Liability General account Net assets Effect Effect of of interest interest rate rate risks risks Surplus management style ALM Rise in interest rates Decline in asset values (bond prices) invested assets Insurance liabilities Rise in interest rates Decline in values of insurance liabilities A rise in interest rates has a positive impact on the return of interest & dividend income Effect Effect of of exchange risks risks Portfolio as a whole is constructed to accommodate foreign exchange fluctuation In principle, hedge against currency risks on ALM and alternative investment as mid- to long-term assets Foreign currency denominated loss reserves etc. at branches outside of Japan are managed by the financial planning division at the head office (those risks are hedged in principle) Aim to secure profits in short-term funds investments in some part 35 ALM Maintain conservative investment of funds from saving-type insurance. Utilize interest rate swaps and other measures, in principle we hold surplus value into the neutral positions against a rise in interest rates in the market, which is called as 'surplus management style ALM'. However, we may build and hold the strong positions against a rise in interest rates in some part of long-term liability, with expecting interest rates to rise in the future. Especially to the securities with long maturity, the unrealized losses in the financial accounting basis will be bigger when interest rates rise substantially, while there is no substantial problem on a surplus basis. Reference Interest-rate sensitivity of ALM surplus value as of the end of FY05 & FY06 Fluctuation of ALM surplus value on the condition that interest rates rise by 1% ( unit : bn yen ) FY05 FY06 Tokio Marine & Nichido General account Deposit-type insurance account Tokio Marine & Nichido Life Total Business related equity holdings Unrealized gains as of March 31, 2007 was approx. 3.5 trillion yen and break-even TOPIX level that would offset the unrealized gains is approx. 400 points. It is remote from having massive losses by market price down. In the mid- to long-term we will build our policy to reduce the portion of business related equity holdings from the current level of approx. 40% of total assets, and during FY06-FY08 we plan to sell approx. 150 bn yen. In FY06, we sold approx. 45 bn yen. Short-term funds Utilizing the opportunities of BOJ's termination of its zero-interest-rate policy and following the increase of its rate, we improved the profitability of short-term funds by flexible ways such as shifting short-term JGB to CP with higher interest rates. [Income yield] Income yield in Fiscal Year 2006 was 2.45%. Tokio Marine & Nichido makes flexible use of considerable levels of interest-rate swap transactions. This is in addition to purchasing cash bonds in order to control the interest-rate risk in our ALM portfolio. Although both interest-rate swap transactions and cash bonds purchases have the same economic effect of controlling interest-rate risk on insurance liabilities, interest income from cash bonds are included in income yield whereas interest revenue from interest-rate swap transactions are not included in income yield. For this reason, the income yield becomes lower than actual performance because we are relying heavily on interest-rate swap transactions.

37 Asset management-tokio Marine & Nichido: Basic policy & overview of absolute return investment Balance the portfolio components with a focus on (1) liquidity, and (2) correlation with the overall market fluctuation ( ), and diversify them in accordance with each characteristic Liquidity risks premium Flexibility on asset allocation Basic Basic portfolio policy policy Liquidity (Marketability) lower higher Private equities Structured products, etc. Hedge funds, etc. etc. Mid to long-term investments in global bonds/equities lower risks higher Achieved a good performance due to diversified investments in various financial products in spite of two global equity market slumps Secure high profitability RORAC 16% Succeeded in keeping stable and good profitability in consecutive four years 20% 15% Overview of of FY2006 Trend of RORAC 16% Acquire 'plus alpha' by duediligence know-how etc. Risk premium with long-term investments 10% Promote positive diversification of styles i.e. utilize external asset managers and diversification of asset class and investment methods In-house 42% distribution of capital basis Outsourcing 58% 5% 0% * excluding risk-free interest rate, cost and tax 36 Basic policy of absolute return investment A core foundation to increase asset management profitability. Aim to improve RORAC Return on Risk Adjusted Capital as the average total return on a marked-to-market basis investment profit realized capital gain/loss increase or decrease of unrealized gain/loss risk base capital and enhance net asset value in the mid- to long- term. (*excluding risk-free interest rate, cost and tax) Aim to secure stable profit through diversified investments in multiple categories, i.e. liquidity and correlation with overall market movement. In addition to diversification of asset classes and diversification of investment methods, promote diversification of styles with utilizing positive selection skills of external asset managers and in-house investment skills. State of FY06 of absolute return investment In alternative investment, good returns have been maintained as before due to the realized gains from the past investments as a fruit of proactive investments into advanced financial products. In market arbitrage investment, both in-house and outsourcing investments show positive returns in spite of the difficult market environment such as equity prices falling down on a global basis in May 2006 and February As a result, RORAC of total absolute return investment reached approx. 16%. Examples of alternative investments Credit derivatives (Off-balance transactions on credit risks) Asset Backed Securities (ABS) (securitized products backed by a pool of financial assets) Securitized real estate products (securitized products backed by a pool of real estate assets) Private equities (investments in equity securities of unlisted companies) Buyouts (investments in opportunities for corporate acquisition or turnaround) Hedge funds (outsource of investment management to external asset managers) Strategy and challenges ahead of absolute return investment Aim to improve profitability by maintaining basic policy on asset allocation on a long-term basis without being deluded by short-term market fluctuations. Aim to secure stable profits by promoting diversification of invest timing in addition to diversification of asset classes and investment methods. In terms of outsourcing investment, continue to enhance good relation with external managers in order to obtain better opportunities to invest in the global market.

38 Tokio Marine & Nichido Life: Future plans To become Japan s most trusted insurance company from customers and agents The second inauguration project Innovation of the operation process from the viewpoints of customers Enhancement of sales base Improvement of earnings structure Review of sales plan Consideration of allocation of management resources staff, system, and costs for measures Review mid-term strategy (stage expansion 2008) Appropriate operation management Improve a series of operation process of proposal - maintenance of contract payment of insurance claims and benefits speedy, accurate and high quality Enhance sales base to exercise Customer First sales Foster solicitation staff who are capable of conducting appropriate and secure solicitation Foster solicitation staff who are capable of conducting consulting for both non-life and life insurance Build framework to pay insurance claims and benefits appropriately 37 Summary of the second inauguration project Innovation of operation process from the viewpoints of customers The number of policies in force has already exceeded 2.25 million, which has rapidly increased the importance of the maintenance of those policies in force. To respond to this situation, we will review the whole operational processes by returning to our starting point of Customers First. In October 2006, a special unit (the 'operational innovation group' in the planning department) was established and it is reviewing such operational processes. Enhancement of sales base While cross-selling is one of our features and strengths, it has become more and more difficult to maintain growth as in the past by implementing the same measures when the business environment is changing. As non-life insurance agency is our core sales channel, we will focus on further enhancement of countermeasures in order to achieve higher growth. On the other hand, in line with market circumstance such as intensified competition within the life insurance industry and diversification of customer needs, new channels such as life-professionals and boutique-type agents have grown significantly. Sales channels themselves are also diversifying e.g. over-the-counter at banks and privatizes post offices. In order to respond to the pace of such changes in new channels, we will consider new additional countermeasures. * Premium composition by sales channels based on a managerial accounting basis) FY05 FY06 Cross-selling 73% 67% Life partners 9% 8% Life professionals 12% 21% Over the counter 5% 2% Mail-order 2% 1% Improvement of earnings structure As a relatively new life insurance company in Japan, the improvement of profits is one of the largest issues for the company because life insurance products have the characteristic that initial cost is relatively high and profit will emerge afterwards over the long-term. With this in mind, we are reviewing the current status of the profits, and considering measures for the further improvement of profitability.

39 Tokio Marine & Nichido Financial Life: Sales strategy & risk control Sales strategy Sales channel strategy Product strategy To enhance the collective strength of the Millea group in the over-the-counter business, we will exert our best efforts to develop close business relationships already existing with our allied financial institutions by providing them with groupwide fine-tuned supporting services Already established solid sales bases with 97 associated financial institutions as of the end of March 2007 Aim to reinforce sales powers both in quality and quantity in FY07 by increasing the number of wholesalers and refining training methods and systems etc. Launched new products 'Todokundesu' in April 2006, 'Sanmi-ittai' in May 2006 Amid intensified competition in the market, we are developing and reviewing product lines by focusing our attention on the profitability and risk elements of products, the power with which they appeal to customers, and salability Risk control The volume of minimum guarantee risks (GBAB/GMIB, GMDB risks) is quantitatively assessed with the decreased value of the annuity asset that is presumed on a 99% shortfall-basis in the event of a price drop of the invested funds To cope with increasing minimum guarantee risks as a result of growing VA business, we have begun hedging with financial derivatives in FY05 and then introduced reinsurance in FY06 By utilizing Tokio Marine Bluebell Re, the joint venture reinsurance company with JP Morgan, various measures are taken to control risks, and a framework is established where continuous and stable sales of variable annuity are possible. In FY07, risk control in line with product characteristics will be conducted through utilization of Tokio Marine Bluebell Re and external reinsurance companies. 38 Variable Individual Annuities GF with a guarantee of a minimum principal amount of annuity receivable BEST SCENARIO, GOOD NEWS, TODOKUNDESU, SANMI-ITTAI and MARINE WAVE When hitting the initial target set up at the time of an annuity contract, investment results will automatically be retained. Investing in a special fund with a relatively high equity weighting. The principal amount of annuity receivables will be 100% guaranteed in terms of GMIB, even if it loses value at the maturity of an annuity contract. Because of its innovative character as the first launched in the annuity market in the 'short-term-return' category, it swiftly penetrated the overthe-counter market. 2 million yen 450 million yen 0 75 years old Name of Products Features Competitiveness Basic insured amount Acceptable age Multi-functional Variable Individual Annuities GF AS YOU LIKE and NENKIN-SHINSEDAI Freely selectable from among the basic plan, a principal guaranteed plan and a principal accumulation plan, with change over from on a plan to another also being possible. In the principal guaranteed plan, the principal amount will be 100% guaranteed in lump sum terms, even if it loses value at the maturity of an annuity contract. The principal accumulation plan is a version of the GMAB type annuity that currently constitutes the main stream of variable annuity products, for which the strong point is investing in a special fund with relatively high equity weighting. 2 million yen 500 million yen 0 75 yeas old (Principal guaranteed plan) Actualized risk of guaranteed minimum accumulation benefit Single-premium Outstanding balance GMDB Actualized risk of guaranteed minimum death benefit GMAB GMIB duration

40 Overseas insurance business: Continuous enhancement of premium income Premium income unit : bn yen FY04 FY05 FY06 FY07 projection FY04 FY times growth 200 bn yen increase Factors of of growth Direct Increase of of insurance business with with local local corporations and and individuals backed backed by by good good developments of of subsidiaries invested since since Reinsurance Enhancement of of underwriting low- low-to to middle middle layers layers of of natural natural disasters in in the the US US 39 Premium income Major investments since FY2000 FY00 India Non-life FY01 Thailand Life FY02 Malaysia Non-life, Taiwan Non-life FY03 China Life FY04 Retakaful (Singapore), Tokio Marine Global (UK) FY05 Brazil Non-life & Annuity, China Tianan, China Broker FY06 Hong Leong Takaful (Malaysia), AGH (Singapore & Malaysia) unit : bn yen FY04 FY05 FY06 Y on Y FY07 projections Y on Y Asia % % Non-life % % Life % % North & Central America % % Europe, Africa, Middle-East % % South America % % Non-life % % Life % % Others % % Non-life total % % Life total % % Direct total % % Reinsurance % % Grand total % % * Non-life: Net premiums written, Life: Premium income * Overseas subsidiaries: Proportional to investment ratio

41 Overseas insurance business: Continuous enhancement of adjusted earnings Adjusted earnings unit : bn yen 27.9 FY04 FY05 FY06 FY07 projection FY04 FY times growth 20 bn yen increase Factors of of growth Expansion of of premium income income in in growing market market such such as as Asia, Asia, BRICs BRICs with with profitability Steady increase of of profit profit in in mature mature markets such such as as the the US US and and Europe Europe Active and and steady steady development in in the the reinsurance business 40 Adjusted earnings Significant increase of adjusted earnings in FY06 included the following factors (total in 9 bn yen) Good result of reinsurance business due to few large-size natural disasters Reverse in IBNR of US operations Effect of boost in profit caused by weaker yen FY07 adjusted earnings could drop due to the elimination of the above factors, but when excluding them, increase in comparison with FY06 in essential. unit : bn yen FY04 FY05 FY06 Y on Y FY07 projections Y on Y Asia % % Non-life % % Life North & Central America % % Europe, Africa, Middle-East % % South America % % Non-life % % Life % % Others % % Non-life total % % Life total Direct total % % Reinsurance % Grand total % % * After tax of Japan, Total figures exclude home office expenses * Overseas subsidiaries: Proportional to investment ratio ROE 4.0% 2.7% 9.5% - 7.8% -

42 Overseas direct insurance business: Future plans Growing markets Asia and BRICs Matured markets Europe and US Maintain existing path of expansion Develop new growth strategy in huge markets Expand local businesses through local entities already acquired or contributed Develop further M&A strategy mainly in target countries in Asia Expand operation as international pioneer of promising Takaful business Expand local business utilizing accumulated experience, know-how and human resources Develop disciplined but bold M&A strategy, by assessing market conditions Both markets Continuously offer excellent products and services in accordance with Japanese companies needs Enhance framework for governance, risk control and compliance, which are necessary for global development 41 Development Development in in Asia Asia is is now now started started by by Asia Asia General General Holdings Holdings (AGH (AGH Acquired in January 2007, and completing TOB in March 2007 (our equity position is 92.1%) Acquired in January 2007, and completing TOB in March 2007 (our equity position is 92.1%) Changed the names of life insurance companies in Singapore and Malaysia to TM Asia Life in March 2007 Changed the names of life insurance companies in Singapore and Malaysia to TM Asia Life in March 2007 Will merge non-life insurance company in Malaysia with our local company (TMIM) at the end of July 2007 Will merge non-life insurance company in Malaysia with our local company (TMIM) at the end of July 2007 (scheduled) (scheduled) Aiming for further development of local operations in Singapore and Malaysia by synergy effect of sales base or Aiming for further development of local operations in Singapore and Malaysia by synergy effect of sales base or insurance techniques of Millea group. insurance techniques of Millea group. New New growth growth strategy strategy Plan and conduct growth strategy not only in Asia or BRICs, but in Europe and US also, putting M&A in Plan and conduct growth strategy not only in Asia or BRICs, but in Europe and US also, putting M&A in perspective. perspective. Conduct thorough and careful market research and progress strategies with due diligence and in Conduct thorough and careful market research and progress strategies with due diligence and in compliance with each legal structure. compliance with each legal structure. New New framework framework for for overseas overseas insurance insurance business business Establish overseas business planning department in Millea Holdings as part of structural reform in July 2007, in order Establish overseas business planning department in Millea Holdings as part of structural reform in July 2007, in order to integrate and strengthen functions of strategy planning or business administration related to overseas insurance to integrate and strengthen functions of strategy planning or business administration related to overseas insurance business of the group (direct non-life insurance, reinsurance of non-life insurance, and life insurance), responding to business of the group (direct non-life insurance, reinsurance of non-life insurance, and life insurance), responding to changes in quality of operation such as rapid expansion of overseas insurance business and development of changes in quality of operation such as rapid expansion of overseas insurance business and development of localization. localization.

43 Overseas reinsurance business: Current status & future plans Reinsurance subsidiaries and their scope of business Tokio Marine & Nichido Tokio Tokio Marine Marine Global Global Facultative reinsurance Specialty Treaty reinsurance Tokio TokioMillennium Re Re Catastrophe disaster risks reinsurance Tokio Tokio Marine Marine Global Global Re Re Treaty reinsurance in Asia Business strategy Direction of the future Business results sum of three companies FY2006 results & FY2007 projections - High ratings and ample capital - Brand advantage and high reputation in the market - Unique technique of risk control Utilizing the above strengths, continue to expand this business by maintaining stable and disciplined underwriting in order to ensure profitability FY bn yen FY07 projections NPW Net income Net income: before tax 42 Trend in reinsurance market As a whole, demand for natural disaster reinsurance in FY06 has been increasing, due to the effect of Hurricane Katrina, revision in the risk amount models (which increases the risk of the direct underwriting company), or strict risk assessment by rating agencies. On the other hand, for risks other than US natural disasters, demand is decreasing due to the recent lack of huge disasters. Reinsurance business in the future Millea group is targeting to raise adjusted earnings from overseas business from 20 to 25% in the portfolio in the long term, and the adjusted earnings have been rising steadily in FY06. The strategies are to improve risk control measures such as quantification of insurance underwriting risks, and to expand operation by maintaining underwriting rules, with a focus on profitability. Tokio Millennium Re Bermuda Established March 2000 Capital US$650 million Main business Catastrophe disaster risk reinsurance Results of 2006 Premium income 29.8 bn yen Net income before tax 14.8 bn yen Tokio Marine Global London Operation started January 2005 Capital 125 million Main Business Results of 2006 Underwrite facultative reinsurance Direct business included in part) Specialty Treaty insurance Premium income 14.8 bn yen Net income before tax 2.1 bn yen Tokio Marine Global Re Dublin Established December 1996 Base Head office in Dublin, and Labuan branch Malaysia Capital US$63 million Main business Treaty insurance in Asian region and retention base for group's reinsurance Results of 2006 Premium income 9.3 bn yen Net income before tax 2.0 bn yen

44 Financial businesses: Current status & future plans Total assets under management in the financial group reached 4.8 trillion yen, an increase of 1.0 trillion yen y/y trillion yen Trend of assets under management FY03 FY04 FY05 FY06 Expansion of of investment trust trust In retail, promote investment trust sales through overthe-counter sales or alliance with Shinko Securities. Expand assets, by introducing new products in line with customers needs, such as products investing in stocks in Southeast Asia, or products for wrap accounts. Increase Increase in in assets assets in in investment investment advisory advisory Asset balance of investment advisory managed by TMA increased 600 bn yen y/y to 3,800 bn yen at the end of March 2007 The 4 th largest discretionary account balance of pension investment in Japan as of the end of Dec The balance is steadily increasing, especially for products specialized in foreign bonds managed by Tokio Marine Rogge Asset Management.* * Joint venture with Rogge, the British asset management company. 43 Results in FY2006 Tokio Marine Asset Management (TMA) significantly increased both investment advisory and investment trust assets. Tokio Marine Capital (venture capital), Tokio Marine Financial Solutions (derivatives) and Millea Real-Estate Risk Management (real-estate investment management company) also had favorable developments. As a result, net income was 2.8 bn yen in fiscal year 2006 (after adjusting Millea's interest in each subsidiaries). Profiles and activities of major financial business group < Tokio Marine Asset Management Co., Ltd. > Established in Started as an investment advisory company, and expanded into the investment trust business in Provides a wide variety of investment products such as alternative, private equity, commodity-related funds, etc., in addition to traditional assets (stocks and bonds in domestic and overseas markets). The ending balance has been steadily increasing in both annuities and investment trusts through the alliance with Shinko Securities. < Tokio Marine Capital Co., Ltd. > Established in Operates private equity fund business that invests in venture capitals and buyouts. Aggregate amount of funds under management (on the basis of commitment amount): 72.0 bn yen (5 funds) < Tokio Marine Financial Solutions Ltd. > Established in After dissolution of a joint venture with Bank One in 2002, it became our wholly owned subsidiary. Provides financial solutions to customers by using derivative instruments. It has diversified its product line-ups to PFI-related arrangement businesses and securitization-related arrangement businesses. < Millea Real-Estate-Risk Management, Inc. > Established in Engaged in the support of origination of real estate investment funds for institutional investors and execution of commissioned business. Total trust balance is approximately 150 bn yen on a value basis. In addition to the conventional Fixed type real estate funds, a Blind pool investment fund was launched to allow flexible rotation of the target real estates. < AIFAM Inc.> Tokio Marine Nichido acquired 31% of the common stock of AIFAM in August AIFAM is an asset management consulting company established in 2001, and its principal businesses are to provide consulting services related to alternative investments for institutional investors and funds of hedge funds. < Tokio Marine Rogge Asset Management Ltd. > Established in October A 50/50 joint venture founded by TMA and Rogge Global Partners (UK) based in UK and providing high quality investment services in Japan as Rogge which has achievement and experience in global bonds investments.

45 Millea Holdings, Inc (listed holding company) Tokio Marine & Nichido Tokio Marine & Nichido Life Tokio Marine & Nichido Financial Life Tokio Marine & Nichido Anshin consulting Tokio Marine & Nichido Career Service Tokio Marine & Nichido Samuel Tokio Marine & Nichido Facilities Tokio Marine & Nichido Medical Service Millea Mondial Millea Real-estate-risk Management Tokio Marine Bluebell Re Nisshin Fire Tokio Marine Asia Tokio Marine Newa Insurance Co., Ltd IFFCO-TOKIO General Insurance Co., Ltd. The Tokio Marine and Fire Insurance Company (Singapore) Pte. Ltd. Tokio Marine Insurans (Malaysia) Bhd. Sino Life Insurance Co., Ltd. Millea Life Insurance (Thailand) Public Co., Ltd. Taiwan Non-life India Non-life Singapore Non-life Malaysia Non-life China Life Thailand Life etc. Real Seguros S.A. Brazil Non-life Tokio Marine & Nichido Risk Consulting Tokio Marine Asset Management Tokio Marine Capital Tokio Marine Financial Solutions Tokio Marine & Nichido Better Life Service International Assistance Tokio Marine & Nichido Adjusting Service Tokio Marine & Nichido Systems Tokio Marine & Nichido Outsourcing Management Tokio Marine Europe Insurance Tokio Marine Brasil Seguradora Asia General Holdings Tokio Millennium Re Tokio Marine Global Tokio Marine Global Re Tokio Marine Management Real Vida e Previdencia S.A. Brazil Life Risk consulting services Investment advisory & trust Private equity investment Derivatives Elderly related services Emergent assistance services Claims investigations System development & management Insurance office works Insurance Insurance Holding company of Life & Non-life insurance Reinsurance Reinsurance Reinsurance Insurance agent etc. 44 Rating agencies Types of ratings Millea Holdings Tokio Marine & Nichido Nisshin Fire Tokio Marine & Nichido Life S & P Insurer financial strength rating AA / stable A / positive AA / stable Moody's Insurer financial strength rating Aa2 / stable Fitch Ratings Insurer financial strength rating AA+ / stable A.M.Best Best's rating A++ / stable R & I Senior long-term credit rating AA+ / stable AA / stable JCR Credit ratings & solvency margin ratios of Millea group companies (as of May 10, 2007) Tokio Marine & Nichido Financial Life Insurance claims paying ability AA+ / stable AA+ / stable Long-tern rating AAA / stable AAA / stable AA / stable Insurance claims paying ability AAA / stable Solvency margin ratio (as of Mar. 31, 2007) 1,097.5% 1,012.6% 2,585.6% 744.6% Market cap ranking: Global insurance group (as of May. 18, 2007) (unit: million $) Rank Short Name Market Cap 1 AIG 187,356 2 BERKSHIRE HATHAWAY 167,091 3 CHINA LIFE 130,453 4 ING 99,474 5 ALLIANZ 98,028 6 AXA 93,934 7 GENERALI 61,026 8 MANULIFE 56,088 9 PING AN 54, METLIFE 50, PRUDENTIAL US 47, ZURICH 45, AVIVA 42, MUNICH RE 40, ALLSTATE 38, PRUDENTIAL UK 37, TRAVELERS 37, SWISS RE 35, AEGON 33, HARTFORD 33, AGF 32, MILLEA HOLDINGS 32,131 Stockholders As of Mar. 31, 2007 As of Sep. 30, 2006 As of Mar. 31, 2006 As of Apr. 2, 2002 Financial institutions 37.4% 39.9% 39.3% 46.1% Foreign legal entities 36.0% 34.3% 36.8% 23.9% Individuals 15.6% 15.1% 14.0% 17.7% Other legal entities 9.9% 9.6% 9.5% 10.8% Security firms 1.2% 1.1% 0.5% 1.6%

46 Disclaimer These information materials are prepared based on the currently available information for us and described subject to our predictions and forecasts carried out at the time of preparation. It must be noted that what is described therein does not guarantee our future business performance and carries certain risk of misjudgment or uncertainty. Accordingly, you are kindly requested to bear in mind that there may be a possibility of sizable divergence between the actual business performance in the future and that of our predictions or forecasts described therein. For further information... Investor Relations Group, Corporate Planning Dept. Millea Holdings, Inc. toshihiko.aizawa@millea.co.jp Tel : , 3408 & 3415 Web-site : 45