FY07 Interim Results & Performance of Mid-term corporate strategy Millea Holdings, Inc

Transcription

1 FY07 Interim Results & Performance of Mid-term corporate strategy 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 3,757.0 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% 3.6% Dividend total * bn yen 19.7 bn yen 18.9 bn yen 25.2 bn yen 29.8 bn yen 39.0 bn yen Dividend per share *3 20 yen 22 yen 22 yen 30 yen 36 yen 48 yen Share buy back * bn yen 92.4 bn yen 70.1 bn yen 85.0 bn yen 90.0 bn yen T.B.D. Sales of business related equity holdings bn yen bn yen bn yen bn yen 45.0 bn yen 45.0 bn yen Share price *5 1,472 yen 3,240 yen 3,120 yen 4,660 yen 4,360 yen 4,030 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 3,322.8 bn yen *1 FY2005: excludes the effect of precondition changes in the domestic life insurance business *2 FY2007: figure is calculated on the ground that the number of stocks is unchanged from that of FY2006 *3 All figures are shown as a basis after share-split implemented in Sep *4 The corresponding fiscal year covers the year starting on the day when the regular shareholders meeting of the next year is convened. On FY05, 57.8 billion yen of stock exchange with Nisshin Fire has been excluded. The figure shown for FY06 is the share repurchases amount cap for one year *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 November 21, % 250% Millea HD TOPIX Relative price performance starting from April 2002 when Millea HD was incorporated 200% 150% 100% as of 21st, November %

3 Section FY07 Interim Results 1. Tokio Marine & Nichido a) b) c) Profit & Loss statement Overview Asset management performance Nisshin Fire Profit & Loss statement TMN Life Profit & Loss statement TMN Financial Life Profit & Loss statement Millea Holdings a) Consolidated Profit & Loss statement b) Comparison with TM & N results c) Contribution of major group companies d) Consolidated Balance sheet FY07 projections a) Tokio Marine & Nichido b) Nisshin Fire c) Tokio Marine & Nichido Life d) Tokio Marine & Nichido Financial Life e) Millea Holdings Adjusted earnings projections for FY Return to shareholders page 2 Topics - Millea consolidated results Ordinary income decreased by bn yen y/y due to a substantial decline in sales of TMN Financial Life, despite a 0.2% increase in Tokio Marine & Nichido, the effect of Nisshin Fire being as a 100% subsidiary and the contribution of newly consolidated overseas insurance subsidiaries in Asia. Ordinary profit increased by 42.4 bn yen y/y and net income increased by 55.3 bn yen y/y, mainly due to the increase in profit of domestic non-life insurance business and the decrease of large-size natural disasters in overseas, the contribution of newly consolidated subsidiaries in Asia, and the effect of extraordinary income caused by the corporate pension fund being transformed to 401(k). Topics - Domestic non-life insurance results NPW of Tokio Marine & Nichido increased by 0.2% y/y, while Nisshin Fire decreased by 1.9% y/y due to the effect of conducting proper business operations. The incurred losses from natural disasters that occurred in FY07 1H decreased substantially. Expense ratio of Tokio Marine & Nichido increased by 0.3% y/y, Nisshin Fire increased by 0.4% y/y due to the effect of conducting proper business operations. In Tokio Marine & Nichido, interest and dividend income increased by 12.2 bn yen y/y and capital gains from security holdings sold increased by 11.4 bn yen y/y. Ordinary profit and net income of Tokio Marine & Nichido increased by 29.6 bn yen and 41.0 bn yen y/y respectively. In Nisshin Fire, ordinary profit and net income increased by 2.8 bn yen and 1.6 bn yen y/y respectively due to the decline of natural disasters. Topics - Domestic life insurance results In Tokio Marine & Nichido Life, ANP of in-force policies increased by 12.9% y/y, while ANP of new policies decreased by 16.2% y/y mainly due to the suspension of sales of policies with increasing amounts payable at death. Net income and core operating profit increased by 3.3 bn yen and 4.8 bn yen y/y respectively thanks to the growth of underwriting income corresponding to the growth of volume of in-force policies, however, net income of the end of FY07 is projected to 0 bn yen due to the obligatory standard underwriting reserves. In Tokio Marine & Nichido Financial Life, in-force policies increased steadily although new policies declined by half due to the launches of new products by competitors on OTC at banks. Net income increased by 14.8 bn yen y/y and this is the first time the company is in 'black' at 1.3 bn yen. Topics - Projections to the end of FY07 results In Tokio Marine & Nichido, NPW is projected to increase by 0.4% y/y, which was planned 1.2% at the start of FY07, mainly due to the effect of the conducting proper business operations. Ordinary profit is expected to be 170 bn yen from the original plan at the start of FY07:153 bn yen, supported by the increase of interest and dividend income, however, net income is projected to increase by only 5 bn yen to the original plan effected by extraordinary losses such as extraordinary amortization expenses of real-estates which was not to be booked in the original plan. In Millea consolidated basis, although ordinary income is projected to decrease by bn yen y/y (-264 bn yen to the original plans) mainly due to the sluggish sales of TMN Financial Life, ordinary profit and net income are expected to increase by 13.9 bn yen y/y (+1 bn yen to the original plans) and 35.9 bn yen y/y (-8 bn yen to the original plans) respectively. Dividend per share is planned to increase by 12 yen, with yearly dividend being 48 yen, plus 33%.

4 Tokio Marine & Nichido FY07 1H Profit & Loss statement FY06 1H FY07 1H FY06 YoY changes YoY YoY Ordinary income 1, % 1, % 2, % Underwriting income 1, % 1, % 2, % Net premiums written % % 1, % Deposit premiums from policyholders % % % Investment income % % % interest and dividend income % % % Transfer of investment income on deposit premiums % % % Other ordinary income % % % Ordinary expenses 1, % 1, % 2, % Underwriting expenses % % 1, % Net claims paid % % 1, % Loss adjustment expenses % % % Agency commissions and brokerage % % % Maturity refunds to policyholders % % % Provision for outstanding claims % % Provision for underwriting reserves % % % Investment expenses % % % Underwriting and general administrative expenses % % % Other ordinary expenses % % % Ordinary profit % % % Extraordinary gains % % % Extraordinary losses % % % Income before income taxes % % % Income taxes % % % Net income % % % Underwriting profit % % % Loss ratio 59.7% 59.8% 0.1% 61.5% Expense ratio 30.7% 31.0% 0.3% 30.7% Combined ratio 90.4% 90.8% 0.4% 92.3% Net investment income % % % Solvency margin ratio % % 46.3% % 3 Underwriting profit Net premiums written in total increased by 0.2 %. Despite some factors contributing to growing business expenses affected by an implementation of proper business operations, incurred losses resulting from natural disasters that had occurred in the period considerably dropped by 23.4 bn yen to 8.8 bn yen, compared to losses of 32.3 bn yen in the previous interim period. This has mainly led to a substantial increase of the overall underwriting profit. Business expense increase affected by proper business operations Due to additional cost incurred by the production of customers confirmation documents in response to suitability rules, an increase of the number of staff involved in document procedures and delivery cost for sending out direct mails to inform policyholders of their policy maturity, business expenses of 6.8 bn yen were produced, including underwriting and general administrative expenses involved in insurance underwriting of 5.6 bn yen and loss adjustment expenses of 1.2 bn yen. Extraordinary gains/losses Extraordinary gains: Extraordinary gains of 26.1 bn yen brought from the transfer of part of the corporate pension funds to defined contribution pension plan (401k) etc. Extraordinary losses Extraordinary depreciation of fixed assets (*1) of 4.6 bn yen and provision of the demolition expense reserves of fixed assets (*2) of 3.4 bn yen etc. *1: Regarding real estates to be re-built before the end of the tax-defined durable years, a difference from the original depreciation expense is to be recognized after the set durable period is shortened according to the date of rebuilding. *2: Regarding real estates to be torn down, such demolition expense is to be recognized ahead of demolition. Solvency margin ratio The solvency margin ratio increased by 24.2 % mainly because of addition of the net income of this interim period to net asset and decrease in huge disaster risk due to ceded insurance rise.

5 Tokio Marine & Nichido FY07 1H Overview Net premiums written and loss ratio by lines FY07 1H NPW YoY FY07 1H Loss ratio YoY Fire -3.1% 42.6% 3.1% Marine 12.8% 49.6% -4.8% Personal Accident 0.3% 47.0% 5.6% Auto 0.5% 63.4% -0.1% CALI -1.1% 76.5% -1.3% Others 0.2% 54.2% -2.6% Total 0.2% 59.8% 0.1% Incurred losses from natural disasters that occurred in the period FY06 1H FY07 1H change Incurred losses Net premiums written Fire Remained flat in the direct premiums, but net premiums written in total fell due to an increase of ceded premiums. Marine Increased due to the growing underwriting businesses affected by economic recovery. Personal Accident Increased upon the expanded policy sales in the previous fiscal year although there was a negative impact from suspension of business operation of third sector products. Auto Increased due to the continued robust sales of FLEET and an increase of in-force policies. CALI Decreased due to a drop in the sales of new cars and the declining number of cars undergoing safety inspections. Others Increased due to the sales of large-sized policies in spite of a backlash of the gain in strong business lines of FY06. Ref. Premium income on a managerial accounting basis per channel in the company Premium income YoY changes Personal % -9.4 Commercial % 5.9 Dealer % Loss Ratio The total loss ratio deteriorated by 0.1 point to 59.8 % due to the deteriorations in fire (large-scale accidents) and in personal accident (third sector products) in spite of slight improvement of auto-insurance. Situations of natural disasters that occurred in this interim period Losses significantly decreased by 23.4 bn yen due to a backlash of losses caused by Typhoon No. 13 in the previous period of FY06 and the fact that there was no large-scale natural disaster in this interim period. Catastrophe reserves A total of 13 million yen was reserved for "Catastrophe Reserve II"(*1) that had been introduced since this period. However, there was no reserve needed for "Catastrophe Reserve IV"(*2) because it was determined so as a result of the stress test which is performed to see whether or not the reserves based on the current rates can meet the level of to ensure that they could cover possible losses even in the case of a future claims payments increase. *1: Prepared for risks from assumed interest rates *2: Prepared for risks of third sector product Expense Ratio The total expense ratio increased by 0.3 point to 31.0% due to an increase of business expenses mainly spent for implementing proper business operations.

6 Tokio Marine & Nichido Asset management performance Composition Composition of of assets assets under under management management bn yen bn yen 0.5 bn yen cash payable monetary claims bought 11.7 bn yen bn yen Net Net investment investment income income 66.1 bn yen bn yen 11.4 bn yen 76.4 bn yen 23.1 Capital gains from securities holdings sold 20.9 domestic bonds bn yen 53.3 Excluding capital gains 0 06/09 07/ domestic equities foreign securities loans real estate others other assets Details Details of of net net investment investment income income (bn yen) 06/09 07/09 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 Total assets of Tokio Marine & Nichido were 11,706.4 bn yen, an increase by 529 bn yen from FY06. Net investment income of Tokio Marine & Nichido were 76.4 bn yen, an increase by 10.3 bn yen from FY06 1H. This increase was mainly due to capital gains from securities holdings sold, which increased by 11.4 bn yen from FY06 1H. On the other hand, excluding the effect of capital gains from securities holdings sold, net investment income amounted to 53.3 bn yen, a decrease of 1.1 bn yen which was substantially a level-off from FY06 1H. This was primarily due to an increase of 11.8 bn yen in net interest and dividend income, major components of which were an increase in dividends receipt backed by brisk corporate earnings or payout ratio improvement and the increase in dividends from overseas subsidiaries, while loss on derivative transactions increased by 13.4 bn yen, major components of which were hedge transactions for foreign exchange risk associated with assets denominated in foreign currencies. In this regard, however, the value of assets denominated in foreign currencies for which hedge transactions were applied increased to a comparable extent. The increase in payable monetary claims bought was mainly due to the increase of assets in short-term CPs which produce relatively higher yield in this segment. Most of CPs are single named exposures and we do not hold foreign ABCPs. Composition of asset by asset class (bn yen) Interest & dividend income (bn yen) 07/03 07/09 changes 06/09 07/09 changes Cash & cash equivalents Domestic bonds Payable monetary claims bought etc. *1 1, , Domestic equities Domestic bonds 2, , Foreign securities Domestic equities 4, , Other securities Foreign securities , Loans Loans Real estate Real estate Others * Others Sub-total 10, , Total Other assets * Total assets 11, , Payable monetary claims bought + Recievable under resale agreements + Guarantee deposits for bond loan transaction Monetary trust + Other securities Cash + Real estate + Construction in process + Deposit of earthquake insurance + Customer's liabilities for acceptance/guarantees + Bad debt reserve

7 Risk exposure to U.S. sub-prime loans Millea Milleagroup's risk risk exposure exposure to to U.S. U.S. sub-prime sub-prime loans loans ("SPLs") ("SPLs") is is approximately approximately bn bn yen yen The The estimated estimated loss loss as as of of the the end end of of September September is is approximately approximately bn bn yen, yen, which which is is included included in in FY07 FY07 interim interim results results Categories Breakdown of SPL-related risk exposure Risk exposure related to SPLs as of August 2007 Risk exposure related to SPLs as of the end of September 2007 changes Investments CDSs in CDOs (1) (super senior risk portion (2) ) approx. 5.0 approx. 8.0 approx. 3.0 Hedge fund investments (net (3) ) approx. 3.3 approx. 1.5 approx RMBS (4) investmentsaaa rated approx. 2.6 approx. 1.2 approx Subtotal approx approx approx Financial Guaranty Treaty Reinsurance Written Reinsurance written from a financial guaranty insurance company under our reinsurance treaties (approx. 91% thereof is rated AAA). approx approx approx. 0.9 Total approx approx approx. 0.7 Notes: 1 CDO Collateralized Debt Obligation A type of asset backed security where the underlying assets are corporate bonds and loans. CDOs supported by credit default swaps ( CDS ) are referred to as synthetic CDOs. 2 Super senior risk portiona security which has higher payment seniority and has higher credit quality than AAA rated securities (the highest rating granted by the rating agencies). 3 Hedge fund investments: Include long (buy) positions and short (sell) positions on SPL-related investment vehicles, the figure set forth in the table is the net of the long and short positions. 4 RMBSResidential Mortgage Backed SecurityA type of asset backed security where the underlying assets are residential mortgage loans. 6 Risk exposures Millea group's risk exposure to U.S.SPLs identified as of September 30, 2007 was approximately 26.9 bn yen. The amount of risk exposure identified increased by 0.7 bn yen from approximately 26.2 bn yen, the amount previously disclosed in August This increase resulted partly from the CDS transactions referring to CDOs which are indirectly linked to US SPLs, further found through a detailed review of the components of such CDOs conducted after the disclosure in August Indirect impact of SPL woes The unrealized loss of credit derivatives, excluding those effected by credit contraction triggered by SPL's woes, was approx. 800 million yen in the 1st half of FY07. Financial guaranty treaty reinsurances of FSA The major part of the financial guaranty treaty reinsurances written from Financial Security Assurance ("FSA") relates to financial guaranties on municipal securities, and our risk exposure stemmed from financial guaranty treaty reinsurance to subprime mortgage related securities structured in 2006, which are causing the highest concern, is limited to approx. 0.5 bn yen, in approx bn yen, the total amount of financial guaranty treaty reinsurances written. We currently expect no significant impact associated with the US SPL's woes. Reflecting FSA's conservative underwriting policy for financial guaranties, the amount of risk exposure held by FSA in relation to sub-prime mortgages is the smallest of the four largest financial guaranty companies in the US. In addition, FSA's risk exposure to ABS of CDO is controlled at a notably low level. State of SIV Vetra The turmoil in the financial markets triggered by the sub-prime mortgages problem affected the operation of Structured Investment Vehicle ("SIV") on a worldwide basis. However, Vetra Finance Corporation ("Vetra"), an SIV consolidated in our financial statements, owns no asset relating to SPL's and has no impact on our FY07 1H net income. In addition, Vetra has sufficient liquidity to maintain sound operation.

8 Three diversifications of absolute return return investment )Diversification of asset classes Structured Private equities B/S of Tokio Marine & Nichido Basic Policy lower products, etc. etc. as of Sept. 30, 2007 Deposit type Mid to long-term Asset for insurance Hedge funds, etc. investments in global bonds/equities ALM higher31% Liability lower risks higher Absolute return Keys of investment diversification investment 7% Correlation with the overall Business Capital market fluctuation related account Liquidity (Marketability) equities 38% Diversification of styles Short term funds 5% Net assets *The ratios are on the basis Outsourcing of capital allocation 59% Other assets 19% 100% Diversification of investment timing * Other assets Asset total Avoid risk concentration and correspond deliberately to Stocks of subsidiaries, real-estates, non-investment assets etc. 11,706.4 bn yen overheated markets. 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 Tokio Marine & Nichido Asset management Secure stable return for each fiscal year and increase the value of of net assets in in the mid- to to long- term ALM Utilize interest rate swaps and other measures for deposit-type insurance premiums: in principle we hold surplus value into the neutral positions against a rise in interest rates in the market, which is called 'surplus management style ALM'. We have built and held strong positions against a rise in interest rates in some part of long-term liability, however in FY07 1H, we managed to lower interest-rate sensitivity against the situation of market destabilization due to sub-prime woes. 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. Liquidity (Marketability) Three diversifications of Control risks while receiving benefits of longterm investments and enjoying liquidity premium In-house 41% 7 Reference Interest-rate sensitivity of ALM surplus value as of the end of September 2007 Fluctuation of ALM surplus value on condition that interest rates rise by 1% FY06 FY07 1H Tokio Marine & Nichido General account Deposit-type insurance accounts Tokio Marine & Nichido Life * * On the basis taking dynamic lapse into consideration Business related equity holdings Unrealized gains as of March 31, 2007 were approx. 3.5 trillion yen and break-even TOPIX level that would offset the unrealized gains is approx. 400 points. The possibility of massive losses by market price decrease is remote. In the mid- to long-term we will 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. We sold approx. 45 bn yen in FY06 and additionally sold approx. 30 bn yen as of the end of Sept Effect of exchange risk to investment income Portfolio as a whole is constructed to accommodate foreign exchange fluctuationin alternative investment, including ALM and mid-to-long term assets, basically we do not assume exchange risks. In addition, the exchange risks from reserves in foreign currency held at foreign offices are managed, by hedge in principal, collectively at asset management division to support global expansion of insurance business. In some parts of shotterm market risk management, we assume foreign currencies exchange risks and aim to earn profit in a flexible manner. Basic policy of absolute return investment Aim to improve RORACReturn on Risk Adjusted Capital as the average total return on a marked-to-market basisinvestment profitrealized capital gain/lossincrease or decrease of unrealized gain/lossrisk base capital by implementing three diversifications and enhance net asset value in the mid- to long- term. (*excluding risk-free interest rate, cost and tax) State of FY07 1st half of absolute return investment In market arbitrage investment, in spite of the temporary disruption in the market due to credit contraction concerns, both in-house and outsourcing investments secured profits. In alternative investment, there was a limited effect from temporary turmoil of some parts in the market, however good returns have been maintained as before due to realized gains from the past investments as the result of proactive investments in advanced financial products. In hedge fund investment, there was an approx. 1.2 bn yen of appraisal loss resulting from sub-prime mortgage woes: however secured profit in total due to diversification investment based on accurate due diligence on individual funds.

9 Nisshin Fire FY07 1H Profit & Loss statement FY06 1H FY07 1H FY06 YoY changes YoY YoY Ordinary income % % % Underwriting income % % % Net premiums written % % % Deposit premiums from policyholders % % % Investment income % % % Interest and dividend income % % % Transfer of investment income on deposit premiums Other ordinary income % % % Ordinary expenses % % % Underwriting expenses % % % Net claims paid % % % Loss adjustment expenses % % % Agency commissions and brokerage % % % Maturity refunds to policyholders % % % Provision for outstanding claims % % % Provision for underwriting reserves % Investment expenses % % % Underwriting and general administrative expenses % % % Other ordinary expenses % % % Ordinary profit % % Extraordinary gains % % % Extraordinary losses % % % Income before income taxes % % Income taxes % % Net income % % Underwriting profit Loss ratio 58.9% 58.4% -0.5% 62.1% Expense ratio 36.5% 36.9% 0.4% 36.4% Combined ratio 95.5% 95.3% -0.2% 98.5% Net investment income % % % Solvency margin ratio 998.7% 977.5% -21.2% % Net premiums written The sale of new policies grew at a sluggish pace in all lines as a result of implementation of voluntary-inspections and instructions to agents for proper business operations. Net claims paid Net claims paid in total decreased mainly in the fire insurance line due to a backlash of the decrease caused by the major effects of snow disasters that had occurred in FY06. Underwriting profit Underwriting profit improved mainly due to a reactive loss of the provision of claims reserves resulting from the effects of natural disasters represented by Typhoon No. 13 and the introduction of statistical IBNR, both of which occurred in FY06. Investment income While the interest and dividend income increased, investment income decreased due to the increase in loss on revaluation of securities. Loss ratio The loss ratio improved due to a drop in the claims paid in spite of a decrease in premium income. Expense ratio The expense ratio rose by 0.4 point mainly due to a decrease in premium income and higher personnel expenses resulting from increase of employees. Solvency margin ratio The solvency margin ratio declined mainly due to the decrease in unrealized gain of securities upon fall of share prices. 8 Tokio Marine & Nichido + Nisshin Fire Tokio Marine & Nichido Nisshin Fire Total FY06 1H FY07 1H changes YoY FY06 1H FY07 1H changes YoY FY06 1H FY07 1H changes YoY Net premiums written % % 1, , % Underwriting profit Net investment income % % % Ordinary profit/loss % % Extraordinary gains/losses % Net income % %

10 Tokio Marine & Nichido Life FY07 1H Profit & Loss statement FY06 1H FY07 1H FY06 YoY changes YoY YoY Ordinary income % % % Income from insurance & reinsurance premiums % % % Insurance premiums % % % Investment income % % % Interest & dividends % % % Foreign exchange gains % % % Other ordinary income % % % Ordinary expenses % % % Insurance claims & other payments % % % Death & other claims % % % Health & other benefits % % % Surrender benefits % % % Provision for policy reserves & other reserves % % % Provision for policy reserves % % % Investment expenses % % % Foreign exchange losses Operating expenses % % % Other ordinary expenses % % % Ordinary profit % % % Extraordinary profits % % - - Extraordinary loss % % % Provision on reserve for dividends to policyholders % % % Income before tax % % % Income tax % % % Net income % % % Core operating profit % % % Solvency margin ratio % % % Sales performance New policies In-force policies * Number of policies Sum insured ANP Number of policies Sum insured ANP YoY changes YoY YoY Individual insurance % % % Medical/cancer etc % % % Individual annuity % % % Total % % % Individual insurance % % 1, % Individual annuity % % % Individual insurance % % % Medical/cancer etc % % % Individual annuity % % % Total % % % Individual insurance 1, % 2, % 2, % Medical/cancer etc % % % Individual annuity % % % Total 2, % 2, % 2, % Individual insurance 12, % 13, , % 12, % Individual annuity % % % Individual insurance % % % Medical/cancer etc % % % Individual annuity % % % Total % % % New policies The number of individual insurance policies decreased by 8.3% compared to a year earlier mainly due to a decline in sales of the third sector insurance. The number of individual annuity insurance policies decreased from FY06 1H by 43.1%, due primarily to a decline in sales of Anshin Dollar Annuity. Although the sum insured of individual annuity insurance decreased by 33.5% compared to FY06 1H, that of individual insurance increased by 9.3% from a year earlier mainly due to the growth in sales of Household Term Insurance of which unit price is rather high. Annualized new premiums declined by 16.2% from a year earlier, due to factors such as suspension of sales of policies with increasing amounts payable at death and decreased sales in the third-sector market (Medical Mini) in addition to a substantial decline in sales of Anshin Dollar Annuity policies. In-force policy Regarding the sum of individual insurance and individual annuity, the number of policies, the sum insured and the annualized newpremiums increased in FY07 1H, while annualized new premiums in individual annuity decreased slightly due to both sluggish sales and increase of cancellations of Anshin Dollar Annuity. Income from insurance & reinsurance premiums Although single-premium decreased, factors such as the buildup of in-force policies led to an increase of 3.7 bn yen, or 2.0% y/y. Net income / Core operating profit Factors such as growth in insurance underwriting income corresponding to the growth in the volume of in-force policies led interim net income to increase by 3.3 bn yen y/y, to 8 bn yen. Similarly, core operating profit grew by 4.8 bn yen over FY06 1H to 13.5 bn yen. Solvency margin ratio The solvency margin ratio remains high at 2,630.8% (reflecting an increase of 45.2 pionts since the end of FY06), indicating a very high level of soundness. FY06 1H (number of policies: 000 omitted) FY07 1H FY06 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 9

11 Tokio Marine & Nichido Financial Life FY07 1H Profit & Loss statement (unit: bn yen) FY06 1H FY07 1H FY06 YoY changes YoY YoY Ordinary income % % 1, % Income from insurance & reinsurance premiums % % 1, % Insurance premiums % % 1, % Investment income % % % Interest & dividends % % % Gains from separate accounts, net % % % Other ordinary income % % % Ordinary expenses % % 1, % Insurance claims & other payments % % % Death & other claims % % % Surrender benefits % % % Reinsurance premiums % % ,546.1% Provision for policy reserves & other reserves % % 1, % Provision for policy reserves % % 1, % Investment expenses ,667.6% % % Operating expenses % % % Other ordinary expenses % % % Ordinary profit Extraordinary profits 0.0 5,983.9% % ,101.9% Extraordinary loss ,034.6% % 0.0 2,546.7% Income before tax Income tax % % % Net income Core operating profit Solvency margin ratio 676.5% 1,076.1% 744.6% 10 Sales performance New policies In-force policies Number of policies Sum insured ANP Number of policies Sum insured ANP FY06 1H FY07 1H FY06 YoY changes YoY YoY Individual insurance % % % Individual annuity 96, % 49,369-47, % 184, % Total 97, % 49,542-47, % 184, % Individual insurance % % % Individual annuity % % 1, % Individual insurance % % % Individual annuity % % % Total % % % Individual insurance 43, % 42,116-1, % 42, % Individual annuity 183, % 314, , % 268, % Total 227, % 356, , % 311, % Individual insurance % % % Individual annuity 1, % 2, % 1, % Individual insurance % % % Individual annuity % % % Total % % % Income from insurance & reinsurance premiums / Net income Although income from insurance & reinsurance premiums was cut by half as a result of the launches of new products by competitors at the OTC at banks, in-force policies grew steadily. As a result, profitability has increased, leading to a major increase of 14.8 bn yen over FY06 1H in interim net income, putting income figures into the black (at 1.3 bn yen). Solvency margin ratio In addition to efforts continued from FY06 to reduce minimum guarantee risk using reinsurance, the results of an injection in capital of 10 bn yen, intended to strengthen the financial foundation, led to an increase of 331.5% from a year earlier in the solvency margin ratio, to 1,076.1%.

12 Millea HD FY07 1H Consolidated Profit & Loss statement FY06 1H FY07 1H FY06 YoY changes YoY YoY Ordinary income 2, % 1, % 4, % Underwriting income 1, % 1, % 3, % Net premiums written 1, % 1, % 2, % Deposit premius from policyholders % % % Life insurance premiums % % 1, % Investment income % % % Interest and dividend income % % % Profit on sales of securities % % % Profit on derivative transactions % % % Profit on special accounts % % % Other ordinary income % % % Ordinary expenses 2, % 1, % 4, % Undrwriting expenses 1, % 1, % 3, % Net claims paid % % 1, % Agency commissions and brokerage % % % Life insurance claims % % % Provision for outstanding claims % % % Provision for underwriting reserves % % 1, % Investment expenses % % % Loss on derivative transactions Underwriting and general administrative expenses % % % Other ordinary expenses % % % Ordinary profit % % % Extraordinary gains % % % Extraordinary losses % % % Income before income taxes % % % Income taxes -current % % % Income taxes -deferred Minority interest % % % Net income % % % Ordinary income Net premiums written from non-life insurance businesses increased by 9.7% due to the consolidation of Nisshin Fire from FY06 2H as well as favorable results of overseas subsidiaries and contributions of newly consolidated AGH group which we acquired in the previous fiscal year. Net premiums written from life insurance business fell substantially by 43.0% due to decrease in sales of variable annuity products of TMN Financial Life. Investment income grew mainly due to increase of interest and dividend income, in particular dividend income of our equity holdings. Ordinary profit / Net income Although ordinary income decreased in FY07 1H, ordinary profit increased mainly due to the decrease in the provision for underwriting reserves accompanied by decreases of premium income from life insurance and the decrease in the provision for outstanding claims affected by fewer natural disasters occurring in this interim period. Net income increased due to income resulting from the corporate pension funds transfer to 401k etc. The composition of ordinary profit and ordinary income composition of ordinary profit and ordinary income for each business segment to external customers) Ordinary income: Non-life insurance 73.7% Life insurance 25.5% Others 1.3% Ordinary profit: Non-life insurance 78.0% Life insurance 18.2% Others 3.5% 11 Net income analysis Floating bar from FY06 1H to FY07 1H Net income of FY06 1H Underwriting reserve Net premiums written Extraordinary gain/loss Interest and dividend Loss reserve Separet account Sales of securities Life p remiu m in co me Claims paid Administration cost Deposit premiums from policy holders Claims paid for Life Taxes Derivatives gain/loss Commission Others Net income of FY07 1H

13 Millea HD Comparison with Tokio Marine & Nichido results Comparison between Millea group and and Tokio Marine & Nichido FY06 1H FY07 1H YoY Millea TM&N ratio Millea TM&N ratio Millea TM&N Net premiums written 1, , % 0.2% Ordinary profit % 64.2% Net income % 189.6% Relation between Millea group and and Tokio Marine & Nichido Millea consolidated 75.0 bn yen Tokio Marine & Nichido 62.7 bn yen Other consolidated subsidiaries Investment income under equity method Amortization of goodwill Accounting method Intragroup elimination 26.4 bn yen -0.4 bn yen 1.5 bn yen 7.6 bn yen 7.6 bn yen 12 Net premiums written Consolidated and non-consolidated ratio increased due to the contribution of newly consolidated subsidiaries represented by Nisshin Fire (equity method affiliated in the previous interim period) and increased revenues from overseas subsidiaries. Ordinary profit / Net income The ordinary profit of Tokio Marine & Nichido also increased due to the decrease of the losses incurred from natural disasters. However, consolidated and non-consolidated ratio in the ordinary profit rose due to the increased profits from growing in-force policies of TMN Financial Life as well as profit increase in reinsurance companies resulting from the decrease of large-scale accidents. Likewise, consolidated and non-consolidated ratio in the net interim income also rose, but since the major cause of the increase in extraordinary loss is attributed to Tokio Marine & Nichido, the ratio of the net interim income is slightly lower than that of the ordinary profit. Relation between Consolidated Results (Millea group) and Non-consolidated Results (Tokio Marine & Nichido) Consolidated results of Millea group are calculated from non-consolidated results of Tokio Marine & Nichido, by adding 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 the tax effect from retained income and the elimination of intragroup transactions) Accounting Method = Differences between the purchase method and the pooling of interests method in the business integration. In 2002, Tokio Marine completed its business integration with Nichido Fire by creating a holding company, Millea HD. The integration was accounted for by the purchase method in a manner that Tokio Marine had acquired Nichido Fire. 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 to 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 in the debit column in cases where the parent company s investments are larger than the subsidiary s net assets and a negative goodwill should be accounted in the credit column in cases where the 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 and amortization of goodwill is posted in a consolidated profit & loss statement. For FY07 1H, Millea HD posted 1.5 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 on the market on the business day just before the announcement of the stock conversion ratio for business integration. -The difference between the consolidated net asset value of Nisshin Fire at the time of the management integration and Nisshin Fire's market capitalization calculated by stock price quoted on the market on the business day just before the announcement of the stock exchange 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 difference between the purchase price and net assets when acquiring Asia General Holdings. The investment gain/loss under the equity method also includes the amortization of goodwill relevant to our equity method subsidiaries.

14 Millea HD Contribution of major group companies Ordinary profit Net income Net income after amortization of goodwill Tokio Marine & Nichido Nisshin Fire Tokio Marine & Nichio Life Tokio Marine & Nichido Financial Life Overseas insurance subsidiaries FInancial business subsidiaries Genral business subsidiaries * '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' 13 The net income after amortization of goodwill Tokio Marine & Nichido Net income of FY07 1H after amortization of goodwill was lower than that of the non-consolidated results (Tokio Marine & Nichido) due to a decrease caused by the difference between purchase method and the pooling of interests method and the elimination of the dividends from overseas subsidiaries in spite of the negative goodwill which was capitalized when Tokio Marine & Nichido integrated management (when Millea Holdings was established). Nisshin Fire Net income for FY07 1H in consolidated results was smaller than the net income of non-consolidated results (or the net loss of Millea Holdings after amortization of goodwill was larger than that of Nisshin Fire) due to substantial decrease caused by the difference between purchase method and the pooling of interests method in spite of the amortization of goodwill at its business integration. Tokio Marine & Nichido Financial Life Due to the amortization of goodwill accounted at its acquisition, the net income (net loss) of TMN Financial Life recognized in Millea Holdings consolidated results was lower than the net income of TMN Financial Life. Overseas insurance subsidiaries Due to the tax effect of retained earnings of Tokio Millenium Re and the amortization of goodwill accounted on the acquisition of Real Seguros in Brazil, the net income of Millea Holdings in consolidated results was smaller than the net income of Real Seguros which was capitalized before amortization of goodwill.

15 Millea HD FY07 1H Consolidated Balance sheet item FY07 1H changes from changes from item FY07 1H the end of FY06 the end of FY06 Cash, deposits and savings Underwriting funds 11, Monetary receivables bought 1, Corporate bonds Securities 13, Payables under securities lending transactions 1, Loans Reserve for retirement benefits Tangible fixed assets Deferred tax liabilities Intangible fixed assets Negative goodwill (good will) Others 1, Deferred tax assets Total liabilities 14, ,146.1 Others 1, Stockholders' equity 1, Valuation and transaction adjustments 2, Others Net assets 3, Total assets 18, ,121.3 Total liabilities and Net assets 18, , Total Assets In spite of the decrease caused by price decline in the stock market, total assets increased by 1,121.3 bn yen (+6.5%) to 18,348.2 bn yen due to increase of assets of TMN Financial Life buoyed by the sales increase of insurance policies and increase of operating assets accompanied by the increase of repurchase transactions. Assets Monetary receivable bought Increased mainly due to short-term investment of commercial papers managed by Tokio Marine & Nichido. Securities In spite of the decrease caused by price decline in the stock market, assets increased due to increase of assets of TMN Financial Life in line with its incremental sales increase of its life insurance policies. Liabilities Underwriting funds Increased due to increase in policy reserves of consolidated subsidiaries and the sales increase of life insurance policies of TMN Financial Life. Payables under securities lending transactions Increased due to the rise of repurchase transactions for the company-owned securities with a view to increasing investment income of Tokio Marine & Nichido. Net Assets Valuation and transaction adjustments Decreased due to the decline in the stock market which impacted on "unrealized gain/loss on available for sales securities."

16 FY07 projections Tokio Marine & Nichido FY06 results FY07 original plans FY07 projections YoY YoY changes YoY Net premiums written 1, % 1, % 1, % Underwriting profit % % % Net investment income % % % Ordinary profit % % % Extraordinary gains/losses % Net income % % % Loss ratio 61.5 % 61.9 % 61.2 % -0.3 % Expense ratio 30.7 % 31.2 % 31.6 % 0.9 % Combined ratio 92.3 % 93.1 % 92.8 % 0.5 % 15 Difference between original plans and projections Revised projections minus Original plans Net premiums written bn yen Loss ratio -0.7 % Underwriting profit ±0.0 bn yen Expense ratio +0.4 % Investment income bn yen Combined ratio -0.3 % Ordinary profit bn yen Extraordinary gains/losses bn yen Net income +5.0 bn yen Net premiums written: Based on the expected income increase of this interim result, a downward revision was made against the original plan. Loss ratio: Expected to improve against the original plan due to the decline of incurred losses from natural disasters. Expense ratio: Expected to increase slightly against the original plan, accompanied by a downward revision of net premiums written. Underwriting profit: Expected to maintain at least the same level as the original plan due to declining profits and the effects of large-scale accidents despite decrease of incurred losses from natural disasters. Investment income: Revised upward against the original plan, in anticipation of stable interest and dividend income, an increase in dividends of domestic stocks and a growth of profit from hedge funds. Net income: Ordinary profit after its upward revision exceeded the extraordinary loss from extraordinary depreciation of fixed assets after its downward revision. For this reason, an upward revision against the original plans was made for net income.

17 FY07 projections Nisshin Fire FY06 results FY07 original plans FY07 projections YoY YoY changes YoY Net premiums written % % % Underwriting profit Net investment income % % % Ordinary profit % % % Extraordinary gains/losses Net income % % % Loss ratio 62.1 % 60.8 % 59.9 % -2.2 % Expense ratio 36.4 % 36.7 % 37.1 % 0.7 % Combined ratio 98.5 % 97.5 % 97.0 % -1.5 % 16 Difference between original plans and projections Revised projections minus Original plans Net premiums written -1.0 bn yen Loss ratio -0.9 % Underwriting profit +2.3 bn yen Expense ratio +0.4 % Investment income -2.4 bn yen Combined ratio -0.5 % Ordinary profit -0.3 bn yen Extraordinary gains/losses +0.2 bn yen Net income -0.1 bn yen Underwriting profit: Net premiums written are expected to be revised downward against the original plan due to sluggish sales performance in the 1st half of FY07 and the decline of shares representing direct insurance of CALI. On the other hand, underwriting profit was revised upward due to a downward revision of the incurred losses from natural disasters. Investment income: Revised downward against the original plan mainly due to the decline of the price of specific equity holdings. Ordinary profit / Net income: Net investment income after its downward revision exceeded the underwriting profit after its upward revision. For this reason, downward revision against the original plan was made in terms of ordinary profit and net income. Net premiums written FY06 results Tokio Marine & Nichido + Nisshin Fire Tokio Marine & Nichido Nisshin Fire Total FY07 projections FY06 FY07 projections FY06 FY07 projections YoY results YoY results YoY Fire % % % Marine % % % P.A % % % Auto % % % CALI % % % Others % % % Total 1, , % % 2, , %

18 FY07 projections Tokio Marine & Nichido Life Of the numerous indicators available to represent the state of life-insurance business performance, we use increase in EV as one management indicator; strong growth is also projected to be maintained at the end of the 2007 fiscal year (unit: bn yen) Individual insurance Individual annuity ANP of new policies 60.1 (unit: bn yen) Embedded value capital injections FY03 FY04 FY05 FY06 FY07 projections 0 FY03 FY04 FY05 FY06 FY07 projections 17 Business performance projections FY03 FY04 FY05 FY06 FY07 original plans projections changes EV at the end of FY Increase/decrease of EV * Increase/decrease of EV * ANP of new policies *1 excluding the capital injections *2 excluding the capital injections, effects of the changes of preconditions and interest rates Although the amount of increase in EV has fallen by 6.9 bn yen from the figure of 30.4 bn yen in FY06(excluding 50 bn yen capital injection), it has increased by 700 million yen vs. the planned amount at the start of the year, to 23.5 bn yen. As a result, EV at the end of this fiscal year is projected to increase from bn yen to bn yen, with steady growth expected to continue. Projected ANP for new policies is 37.5 bn yen, or 57.1% of the figure for the previous year. The largest factor leading to this result was the fact that ANP for individual insurance was 54.5% of the figure for the previous year, due to the effects of suspension of sales of policies with increasing amounts payable at death and fewer cancellation returns Since due to factors including the nature of life insurance with its high cost burden at the start of a policy, at present we are working to reach the amount of standard underwriting reserves. For this reason, net income will rise once this amount of standard underwriting reserves has been achieved Reference Other projections for FY07 Revenues bn yen Income from premiums bn yen Operating income 6.1 bn yen (22.3 bn yen) Core operating profit 0.7 bn yen (16.9 bn yen) Net income 0 bn yen (10.3 bn yen) ( ) : before statutory reserves 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.

19 FY07 projections Tokio Marine & Nichido Financial Life Although single-payment premiums for variable annuities fell by half from the previous year, factors such as stable growth in income resulting from in-force policies lead to projections of an increase of bn yen in EV at the end of the 2007 fiscal year Single premium of valuable annuities Embedded value 1,200 1, <Business size> , <Profit> capital injections (bn yen) FY04 FY05 FY06 FY07 projection 0 (bn yen) FY04 FY05 FY06 FY07 projection 18 Sales conditions During this fiscal year, we have begun sales at nine financial institutions by the end Reference Other projections for FY07 of September. Expansion of the sales network is continuing. (The number of partner financial institutions as of the end of September 2007 was 106.) Revenues bn yen At the same time, intensification of competition with other companies products has Income from premiums bn yen led to the projection that the amount of single-payment premiums for variable Operating income 1.0 bn yen annuities across the entire FY07 will decline by half from FY06, to 550 bn yen. Core operating profit 6.1 bn yen Net income 1.0 bn yen Business performance projections Although premiums have declined by half, since we have been able to secure stable income as a result of steady growth on in-force policies, the amount of increase in EV (not including capital injections) is projected to be 8.7 bn yen. FY04 FY05 FY06 FY07 original plans projections changes EV at the end of FY Increase/decrease of EV * Increase/decrease of EV * *1 *2 excluding capital injections excluding capital injections, the difference between actual and assumed investment performance, changes of preconditions, subordinated loans, and the effects from reinsurance on policies in past FY Product strategy Name of products Features 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 Reaching the initial target set up at the time of an annuity contract after three years, investment results will automatically be retained Investing in a separate account 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 Launch of the new product "GOOD NEWS ", which is a renewed "GOOD NEWS", in November 2007 <Main features> Short-term return, minimum 1 year after making contract GMAB, the principal amount will be guaranteed in lump sum terms even if it loses value at the maturity of an annuity contract

20 FY07 projections Millea Holdings FY06 results FY07 original plans FY07 projections Ordinary income YoY YoY 4, % 4, % changes from FY06 results YoY to FY06 results 3, % Ordinary profit % % % Net income % % % Dividends per share FY06 FY07 original plans FY07 projections interim year end interim year end interim year end 36 yen 15 yen 21 yen 36 yen 18 yen 18 yen 48 yen 18 yen 30 yen 19 The difference between original plans and projections Revised projections minus Original plans Ordinary income bn yen The ordinary income is expected to decrease because the projections of sales of TMN Financial Life were revised down. Ordinary profit +1bn yen / Net income -8 bn yen The ordinary profit in total is expected to stay unchanged against the original plan due to the downward revision of overseas subsidiaries, although the investment income is expected to improve in Tokio Marine & Nichido. Net income is expected to decline by 8.0 bn yen because the extraordinary losses posted in the interim results including reserves for demolition expense in Tokio Marine & Nichido were factored into the projection. Dividends per share The dividend amount per share is expected to increase by 12 yen. on a full year basis, +12 yen Y on Y, a level of +33 %.)

21 Adjusted earnings projections for FY07 Business domains FY06 FY07 original plans FY07 projections changes Note Domestic non-life insurance Tokio Marine & Nichido ref. chart described below Nisshin Fire Domestic life insurance TMN Life ref. P.17 Increase of EV TMN Financial Life ref. P.18 Increase of EV Others Overseas insurance ref. P.31Adjusted earnings Asia ref. P.31Adjusted earnings North & Central America ref. P.31Adjusted earnings Europe, Africa, Middle-east ref. P.31Adjusted earnings South America ref. P.31Adjusted earnings Others ref. P.31Adjusted earnings Reinsurance ref. P.31,P.32 Adjusted earnings Financial & General businesses Group total Adjusted ROE 3.8% 3.4% 3.6% +0.2% Tokio Marine & Nichido Net income Provision for catastrophe reserves etc. (after tax) Provision for price fluctuation reserves (after tax) Realized gains/losses and/or unrealized losses on bonds and swaps related to ALM, and those of security holdings, realestates (after tax) Other extraordinary items (after tax) Tokio Marine & Nichido Adjusted earnings not arising from non-life insurance business Tokio Marine & Nichido Adjusted earnings bn yen 18.6 bn yen 4.2 bn yen 22.3 bn yen 9.7 bn yen 10.1 bn yen bn yen Primary factors leading to increases and decreases Domestic non-life insurance: The effects of a decrease in incurred losses due to the small number of natural disasters and factors such as an increase in dividend income from Japanese stocks and other sources have led to projections of an increase of 18.1 bn yen over the planned figure, to bn yen Domestic life insurance: The effects of factors such as a decrease in new policies due to intensification of competition in the variable annuity business and an increase in reinsurance premiums due to increased stock-market volatility have led to projections of a decrease of 3.9 bn yen from the planned figure, to 32.2 bn yen Overseas insurance: Although projections include increased profits in the reinsurance field due to the small number of natural disasters or large-scale accidents, inclusion of factors such as decreased income due to poor sales of auto insurance in South America leads to projections of a decrease of 2.5 bn yen from the planned figure, to 25.3 bn yen Financial and general businesses: Factors such as the effects of fluctuations in financial markets lead to projections of a decrease of 3.8 bn yen from the planned figure in the finical business, to -200 million yen Definition of adjusted earnings The Millea group uses adjusted earnings, as defined below, as an indicator for business planning and return to shareholders. Adjusted earnings is an indicator that makes pure profit or loss for the period clear by eliminating the effects of various reserves exclusive to the Japanese nonlife insurance business as well as deducting factors such as realized gains/losses and unrealized losses of assets, the sources of which are not necessarily attributable to the current period alone. For income the recognition of which is delayed on an accounting basis, such as that in the life insurance business, the results of investment and other efforts are recognized by considering the increase in embedded value (EV) for the period to represent income for the period. Adjusting for the unique characteristics of Japanese insurance accounting makes it easier to to compare performance with that of overseas insurers by enabling recognition of profits more closely resembling that conducted under U.S.GAAP and other international accounting standards. 20 (1) Non-life insurance business Adjusted earnings Net inco m e Pro visio n fo r catastrophe reserves etc. *2 = + + P ro visio n fo r price fluctuation reserves *2 - Gains/losses from assets under ALM *3 Gains/losses from stocks and properties etc. - - Other extraordinary item s (2) Life insurance business *4 <Illustration> Increase in EV A djusted earnings C apital injectio ns etc. Adjusted earnings Increase in EV - *5 Capital injections etc. EV at the end of the previous fiscal year EV at the end of the fiscal year (3) Other businesses --- Net income shown in financial statements *1 Adjusted earnings are after tax basis *2 Negative figures in case of reversal of catastrophe reserves or price fluctuation reserves *3 ALM: Asset Liability Management Realized and unrealized gains/losses arising from debt securities and interest rate swap transactions utilized in ALM *4 Some life insurance business, such as that in Brazil, is based on the scheme of (3) general businesses *5 EV: Embedded Value Indicator computed as the sum of net asset value and the value of in-force calculated as the discounted present value

22 Return to shareholders FY07 dividends (yearly basis) Yearly dividends per share projection : 48 yen (+12 yen) (39 bn yen in total : +9 bn yen) increase the pay-out ratio up to 28% to projected average of adjusted earnings 140 bn yen Dividends 33% up! Continue toplevel returns to shareholders among listed companies in Japan Total amount of average of adjusted earnings are distributed to shareholders Stable profit-sharing with shareholders Dividends Basic concept Aim to increase the pay-out ratio (dividends total/average of adjusted earnings) by up to 30% FY06 dividends Yearly dividends per share 36 yen 29.8 bn yen in total FY07 interim dividends 18 yen per share (14.6 bn yen in total) Total bn yen Flexible profit-sharing with shareholders Share repurchases Basic concept Implement up to the amount as average of adjusted earnings minus yearly dividends July June 2008 Annual limit 90.0 bn yen July November 2007 Implemented amount 51.4 bn yen ( 11,120 thousands shares in total) 21 Return to shareholders unit:bn yen projections Adjusted earnings Total amount T.B.D. Dividends to shareholders Share repurchases T.B.D. Figures for 2001 are the sum of Tokio Marine and Nichido Fire The corresponding fiscal year covers a year starting the day when AGM(June) of the next year is convented * As for share repurchase 2006, 90 bn yen is an annual limit for the term from June 06 to June 07 Pay-out ratio to average of adjusted earnings Dividends 40% 30% 20% 10% Trend of Pay-out ratio 19% 20% FY02 FY03 FY04 Per share *1 (yen) Total amount (bn yen) Average of adjusted earnings (bn yen) Pay-out ratio *2 19% 20% 19% 23% 25% 28% *1 Figures for 2003/3-2006/3 are shown on a basis after share-split *2 Based on average of adjusted earnings 19% 23% FY05 25% FY06 28% FY07 projections 30% after FY08 Share repurchase ranking in FY07 1H (bn yen) Rank Name Amount 1 Mizuho FG Canon Mitsubishi Corporation Takeda JFE HD Sumitomo Corpotarion NTT DoCoMo Nippon Steel Toyota Motor Sumitomo Metals Millea HD 37.8 NOMURA SECURITIES Financial & Source: Economics Research Center

23 Section Performance of Mid-term corporate strategy 1. Tokio Marine & Nichido Efforts to conduct proper business operations Tokio Marine & Nichido Business Renovation Project Current status of Mid-term corporate strategy Revision of FY08 projections Stage expansion of products & services Stage expansion of sales networks Tokio Marine & Nichido Life The Second Inauguration Project Stage expansion of regions Concentration of group's comprehensive strength Improvement of capital efficiency Millea group organization chart page 22 Stage expansion for strategy General business Non-life insurance Life insurance Financial business Stage expansion of products & services Domestic market Temporary personnel services Risk consulting Health care for senior citizens Diabetesdedicated casualty insurance Facility management Assistance B.P.O. -platform for all strategies- Business renovation project Super insurance Investment advisory Investment trust Derivatives Structured finance Thirdsector market Total Assist Private equity Real estate investment advisory 401(k) Variable annuity Group-wide marketing Bancassurance Multi channel strategy Stage expansion of sales networks Reinsurance business Direct business Overseas market Growth strategy based on strengthening the existing subsidiaries: Tokio Millennium Re Tokio Marine Global Re Tokio Marine Global Development strategy combined with organic growth and strategic options (M&A, capital investment/cooperation) Current targets: Maintain and enhance these markets Southeast Asia Taiwan, Malaysia, Thailand BRICs Brazil, Russia, India, China New targets: Europe & USA Entry into local markets Stage expansion of regions Concentration of group's comprehensive strength Improvement of capital efficiency Utilizing the holding company Millea Holdings function for distribution of management resources to the fullest extent, to build the optimal business portfolio with high levels of profitability, growth potential, and capital efficiency Strengthening the structure for promoting cross-functional groupware business strategies, to respond to customers' needs optimally by providing a wide range of products and services via diverse channels Through integrated risk management conducted on a quantitative and systematic basis, quantitatively ascertaining the risks affecting businesses and managing these to keep the volume of risks within the scope of capital. To ensure capital in excess of that needed to cover risks, focusing on strategic business fields and new businesses with high profitability and growth potential and on increasing capital efficiency by enhancing measures for return to shareholders.

24 Tokio Marine & Nichido Efforts to conduct proper business operations Enhancement of managing system from external viewpoints, e.g. customers Enhancement of framework for finding problems Voice of customers external indication Internal audit internal indication Enhancement of managing for insurance claim payment Enhancement of solicitation system & underwriting system Persistent efforts to restore public confidence Improvement of Quality Management Enhancement of compliance system 23 Progress of proper business operations in Tokio Marine & Nichido, the Millea group's core business Enhancement of managing system from external viewpoints, e.g. customers Two customers participated in the Quality Management Improvement Committee as independent members to represent customers' needs. The Committee under the new framework held the meetings in July and September The Compliance Committee also appointed an existing member from outside the company as chairperson and at the same time, the said chairperson was appointed as an independent director of the company. The Committee under the new framework held the meetings in June and October One more independent auditor was appointed in June Enhancement of framework for finding problems Voice of customers External suggestions to point out problems The Voice of Customers Dept. was established in July 2007 to analyze problems based on the customers opinions, form corporate-wide business improvement measures, and propose the measures to the promoting and/or related departments and follow them up. In order to further increase transparency relating to "voice of customers", the company has periodically announced the number of customer opinions, details of those opinions and cases of improvements. Internal Auditing Internal suggestions to point out problems In order to establish an effective internal audit system, the company increased the number of its internal audit staff from 76 to 100 in August In order to increase internal audits of its agents, the company has planned the annual audits for its approximately 1,500 agents and, so far, completed close to one-third of them. Enhancement of managing for insurance claim payments As part of the review of re-examination functions for claim payments, the Complaint Response Committee was established in July The Committee consists of physicians and attorneys outside the company and conducts examinations of all the non-payment cases of its third sector products and processing of cases that require a high degree of medical and legal expertise. The company has established a qualification system for employees as a prerequisite to deal with claim payments for its third sector products. Since July 31, 2007, only staff members who have obtained qualifications under this system have been handling claims relating to its third sector products. Enhancement of solicitation system and underwriting system Introducing an Insurance Coverage Confirmation Sheet, the company has accordingly started, since April 2007, confirmation of actions for customers to confirm their intentions, coverage contents and premiums before they sign insurance contracts. The company launched a Sales Qualification System for insurance solicitors who handle third sector products in May As of September 2007, about 52,000 solicitors have obtained such sales qualifications. Enhancement of compliance system The company implemented business quality improvement training for all its employees including staff by the end of June. The company increased the number of staff members in the Compliance Dept. by 10 in July and August 2007 to improve its function to check insurance solicitation and claim payments.

25 Tokio Marine & Nichido Business Renovation Project Project outline Significant improvement of service quality and increase of business efficiency FY07 plans Promote operational process improvement centering on renewal of agent operation system and cashless transactions Simplify policy clauses and riders drastically Renovate and advance basic IT system Reduce workload of both agents and employees by 10-30% Reduce product lines by Half Improve system development effectiveness by 30% Revise the development 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 Business Renovation Project Schedule outline FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 Launched the project in view of the coming 3-5 years Conduct proper buseiness operation Reform of infrastructure e.g. the core IT system, agency network system Innovation of Auto insurance Innovation of Fire insurance Revised the schedule and the related costs of Business Renovation Project in order to conduct proper business Innovation of Other insurance 24 Numerical trend related to business process renovation Steady development 'Examples of Auto insurance' Apr.05 Mar.06 Mar.07 Oct.07 Changes Apr.05 - Oct.07 Policies booked at agents Cashless premium payments Early rollover of policies Percentage of policies booked at agents Percentage of policies for which premiums are paid from bank accounts directly etc. not by cash Percentage of policies that completed thier renewal procedure by 4 weeks prior to thier maturity date 91.1% 93.7% 96.4% 97.6% +6.5% 42.1% 63.0% 75.1% 77.5% +35.4% 29.4% 34.7% 50.7% 49.1% +19.7% Trends in annual costs of proper business operations and Business Renovation Projects unit : bn yen Actions for proper business operations Initial cost Business Renovation Project FY06 FY07 FY08 FY09 FY10 after FY11 Total results projections projections projections projections projections projections Initial cost Reduction of operating cost some some some Renewal of core IT systems (i) Eliminating complexities in the product accounting system resulting from repeated addition to and modification of products (ii) Strengthening linkage of policy information with claims system to improve claims payment processes (iii) Converting operational processes from a policy basis to a policyholder basis, to base operations on inquiries into customer information (iv) Strengthening agent support by sharing information between internal and agent systems (v) Unifying computer-system infrastructures for Super-Insurance and other products

26 Current status of Mid-term corporate strategy Stage expansion for strategy -Three foundations- Products & Services Develop & launch new products to implement "Stage expansion of insurance business" Enhance business fields of general business by utilizing the merits of insurance holding company Sales networks Actions in accordance with Full-liberalization of OTC at banks & Privatization of postal services Regions - Global strategy Further enhancement in Asia market by M&A e.g. AGH Concentration of group's comprehensive strength Establishment of the one-dimensional department through TM&N, TM&N Life and TM&N Financial Life Enhancement of Financial business & General business Improvement of capital efficiency Promote M&A strategy Continue top-level returns to shareholders among listed companies Improve pay-out ratio steadily 25 Stage expansion for strategy Outcome of Stage expansion of products & services Revision of Total Assist (Tokio Marine & Nichido : December 2006) Launch of Cancer cure-support insurance (Tokio Marine & Nichido Life : September 2007) Injection of Millea HD capital to general business group companies (since 2006) Tokio Marine & Nichido Medical Service (February 2007) Tokio Marine & Nichido Anshin Consulting (April 2007) Tokio Marine & Nichido Risk Consulting (October 2007) Agreement to invest in small-amount & short-term insurer "Nihon Kosei Kyousaikai"August 2007 Outcome of Stage expansion of sales networks Establishment of Financial sales promotion department (Tokio Marine & Nichido, Tokio Marine & Nichido Life and Tokio Marine & Nichido Financial Life : July 2006) Successful acquisition of an appointment as a proxy application company and as a leading underwriting company to Postal service company (Tokio Marine & Nichido : Sales start in October 2007) Outcome of Stage expansion of regions Establishment of Hong Leong Takaful (June 2006) Completion of M&A of AGH (March 2007) Establishment of International business development department (August 2007) 1. Enhancing functions to develop strategies for individual region, direct insurance, and reinsurance in overseas insurance business, and developing and accomplishing unified strategy for the purpose of optimization for entire Millea group 2. Building efficient and effective governance and risk management system unique to overseas insurance business International Business Development Dept. of Millea Holdings Strategic Planning Group Business Management Group China and East Asia Management Group Reinsurance Planning Group

27 Revision of FY08 projections Although in in light light of of the the fact fact that that the the environment in in which which the the Millea Milleagroup's four four core core insurers insurers operate operate has has undergone dramatic changes changes centered centered on onensuring proper proper business business operations, resulting in in revisions to to the the numerical targets targets for for the the final final year year of of the the mid-term corporate strategy, its its strategic strategic framework remains remains unchanged, and and efforts efforts already already initiated initiated will will continue steadily. steadily. Business domains FY06 FY06 projections FY08 otiginal plans FY08 projections changes Domestic non-life insurance Tokio Marine & Nichido Nisshin Fire Domestic life insurance TMN Life TMN Financial Life Others Overseas insurance Asia North & Central America Europe, Africa, Middle-east South America Others Reinsurance Financial & General businesses Group total Adjusted ROE 3.8% 3.6% 5% 4.0% - 26 Primary factors leading to increases and decreases Domestic non-life insurance business: In the 2008 fiscal year as well, factors such as booking in that fiscal year of initial costs (see p. 24) related to the Business Renovation Project at Tokio Marine & Nichido as a result of continued efforts giving priority to establishing more appropriate business operations and related scheduling changes led to a decrease of 25 bn yen from the initial plans, to a figure of 95 bn yen. Domestic life insurance business: No change from the initial plans Overseas insurance business: Despite the effects of market softening, projections for Asia include the output of consolidation of businesses already purchased and the growth of existing businesses, leading to an increase of 5 bn yen from the initial planned figure for Overseas insurance business as a whole, to 30 bn yen. Financial and general businesses: No change from the initial plans Target long-term business portfolio of Millea group Domestic non-life Domestic life Overseas Financial & General Adjusted earnings increase nearly threefold 4% 6% 25% 65% FY % 20%25% 40%50% 20%25% till FY2015 Adjusted ROE: 3.7% Adjusted ROE: 8%

28 Stage expansion of products & services Non-life Life & Non-life fusion Life high-value-added auto insurance with assistance services combining all the compensation needed in a single policy conducting a campaign to protect policyholders from cancer Provides policyholders with complete protection Compensation for the policyholder Compensation for car Compensation for the other party Traditional products Providing Auto, Fire, Life etc. respectively Super-insurance Providing a combined single policy This insurance provides a higher level of support for cancer treatment, reflecting the latest cancer treatments and based on interviews with cancer patients and their families about their concerns. Paying benefits for diagnosis multiple times, covering 100% of carcinoma in situ Damaged accident assist Loss prevention assist Support with 6 assistance services Road assist Medical site assist Ex post selection assist Auto P.A. Fire Medical Life Auto Property Baggage Liability Expenses Injury Life Shortening periods and standardizing amounts in requirements for payment of outpatient coverage Applying fixed amounts to surgery coverage, and making such coverage subject to special contracts New New Applying more freedom of design <Addition of special contracts, benefit amounts, policy terms, payment periods> New Upon renewal, enabling policyholders to renew policies for life without an examination <Special rules on renewal of insurance policies> New 27 Advanced method High-level of know-how such as Alternative Risk Transfer (ART) utilizing actuarial finance Advanced know-how accumulated by the risk hedging experiences of the group -1997: Securitization of earthquake-caused risks with the pioneering parametric method developed by us. -Aug. 2006: Securitization of Japan's typhoon caused risks of 23.0 bn yen. -Swap transactions made between the Japan's natural disaster-caused risks and those overseas. -Underwriting of overseas natural disastercaused risks with an advanced risk model in the reinsurance company founded in British Bermuda in Provision of risk finance utilizing its know-how Making good use of the world's most advanced technology, TM&N has provided its business customers the risk hedging methods totally different from those for conventional insurance coverage, such as weather derivative, typhoon derivative and earthquake derivative etc. Moreover, by taking advantage of such know-how, TM&N has offered insurance products to hedge the risk from weather change in India. Safety before accidents Effective consulting services for business risks offered by TMN Risk Consulting (TRC) Major Consulting Cases BCP-related TRC supports a series of customers business continuity from planning to constructing the system. Car Accident Reduction TRC proposes the idea to reduce auto mobile accidents involving companyowned car by using a camera-mounted driving recorder in a scientific and rational manner. Food Safety and Product Safety TRC provides a comprehensive support for its customers to secure food safety and to respond to Consumer Product Safety Law. Internal Control Construction Support TRC supports its customers to take proper actions required by both the Corporation Law and J-SOX Act. TRC also offers services to reduce customers' damage/loss even after suffering disasters through crisis management and early recovery back-up. Security after accidents World-wide reliable network INTAC, assistance company for overseas travelers Overseas Assistance Services 24/7 services available) Emergency assistance for overseas 24 travelers Total support for overseas crisis mgt. Assistance for customers to handle overseas political climate change Emergency assistance in Japan Medical Services We analyze and assess customers' medical expense provided by the non-life insurance policies and prepare an opinion paper from experts.

29 Stage expansion of sales networks We We will will build build optimum contact points (distribution channels) with with customers, by by taking advantage of of future changes in in the the business environment, such such as as the the full full liberalization of of over-the-counter sales sales at at financial institutions. Over the counter sales at banks Supporting establishment of compliance readiness for individual financial institution Enhancing supporting system for sales of various product (e.g. sales training) Prepare sales tools, etc. Strengthen basic relationship with financial institution Launch attractive product Auto insurance sales at postal service "Atarashii-Futsu-wo-Tsukuru." Slogan of Japan Postal Service ( We create the new norm") Start Start selling selling Auto Auto insurance insurance at at postal postal service service on on Oct. Oct. 1, 1, the the first first new new financial financial business business as as postal postal service service after after privatization privatization Complete preparation for solicitors seeking qualification, as proxy application company Offering products which are easy to sell and explain, as a leading underwriting company Enhance support system Enrich sales support system powerful nationwide network of Tokio Marine & Nichido Developing consulting sales, with compliance in mind Superior product development capability represented by Total Assist Starting sales, initially at 23 offices in Tokyo metropolitan area Number of the allied financial institutions as of the end of March, 2007: 401 (Tokio Marine & Nichido) ; 236 (TMN Life); 90 (TMN Financial Life) Gradual expansion of number of offices in the future 28 Full-liberalization of over-the-counter sales at banks Prepared for the full liberalization of over-the-counter sales at financial institutions slated for December 22, 2007, the Millea group is proceeding with its related efforts to support the compliance framework represented by measures to prevent negative effects of liberalization, to put the sales support system in place through training in selling insurance products, and to improve our response to inquiries from customers and bank personnel. We will continue to further reinforce our support system and network to meet the needs of financial institutions. Privatization of Postal Service Regarding the postal service sales channel, Tokio Marine & Nichido, as a proxy application company, has been promoting acquisition by post office staff of qualifications required to be an insurance solicitor. Also, as a leading auto-insurance underwriting company, Tokio Marine & Nichido completed registration of the 23 postal offices in the metropolitan area as non-life insurance agents on Oct and accordingly, launched the sale of auto-insurance. In 2008 and subsequent years, Tokio Marine & Nichido will support Japan Post Group to increase its nation-wide sales channels through postal offices by making best use of the consulting sales method and taking compliance into account.

30 Tokio Marine & Nichido Life The Second Inauguration Project Rapid changes of the market and sales channels The Second Inauguration Project To become "Japan's most trusted life insurance company from customers and agents" Renovation of business models Renovation of sales channel strategy Stage expansion of products & services Anshin Quality Promote strategy for maintenance of in-force policies Enhancement of non-life insurance agency channels Reformation of life partners Respond aggressively to new channels Campaign for protecting customers from cancer Exercise customer first sales and realize sustainable growth Renovation of business model While promising the customers "Anshin Quality," a quality level indispensable to them, TMN Life is reviewing a series of insurance business processes such as solicitation, new policy contract, policy maintenance and claim payments from the customers perspectives. Build up a full customer support system for a total of 2.25 millions of in-force policies that have increased at high speed. Promotion of the strategic policy maintenance: TMN Life has allowed its customers to pay premiums of all lines of its insurance products by credit card. Switching their payment method for existing policies to payment by credit card is also available.) TMN Life is the first insurance company to introduce credit card payment made from customers' cellular phones without the need to use special-terminals). This affords the customers greater convenience and leads TMN Life to enhance its business process efficiency through prevention of lapsed policies. Increase of the business speed by paperless processes: plans are in place to put the paperless application process via Internet into action. Promotion of simplification and streamlining of business processes Renovation of the claim payment process: TMN Life renovates its claim payment system. Renovation of sales channel strategies Drastic reform of our distinctive sales channels using cross-selling and Life Partner and positive response to new channels. Cross-selling: TMN Life has provided its agents and staff with practical training aiming to accelerate the expansion of the sales force through TMN Life Training College) and encourages the developments of sales personnel of its agents. Also, the company has endeavored to consolidate its sales channels with a comprehensive consulting capability for both life and non-life insurance businesses. Life Partner: TMN Life strives to enhance its consulting capability with a newly completed educational curriculum. Large-scale Life Professional and sales shop: TMN Life focuses its energy on these channels as the pillar of its growth strategy and will increase their dominance in TMN Life sales channels. Full liberalization of OTC sales at banks / privatization of postal service: Supported by the entire group efforts in cooperation with Tokio Marine & Nichido and TMN Financial Life, TMN Life explores new sales markets. Stage expansion of products & services New concept beyond the conventional insurance business domains to support everything that the customers may worry about. As the first step to put the concept into practice, TMN Life is developing a nation-wide "campaign to protect customers from cancer*." *Upon launching "Cancer cure-support insurance", TMN Life started the campaign with a view "to knowing more about cancer," "to providing the information" and "to assisting those suffering from cancer". 29

31 Stage expansion of regions It It is is important important to to develop develop overseas overseas insurance insurance business business in in order order to to reduce reduce dependence dependence on on the the domestic domestic property property and and casualty casualty insurance insurance business business Merger Merger and and acquisition acquisition strategies strategies conducted conducted so so far far have have been been successful, successful, and and we we plan plan to to realize realize steady steady expansion expansion in in overseas overseas insurance insurance businesses businesses centered centered on on local local business business in in Asia Asia and and South South America America We We plan plan to to turn turn the the merger merger and and acquisition acquisition expertise expertise and and management management abilities abilities built built up up through through business business expansion expansion in in Asia Asia and and South South America America into into new new strengths strengths for for the the Millea Millea group group Growth of Overseas insurance business Premium income Reinsurence Other regions South America Asia (unit: bn yen) FY04 FY05 FY06 FY07 projections 30 Expansion in Asia and BRICs Aiming to reduce the dependence on domestic non-life insurance business and to accomplish sustainable growth, we have been conducting expansion plans and actions mainly in Asia and BRICs under our overseas business strategy. FY04 weight FY05 weight FY06 weight FY07 projections weight Asia % % % % South America 8.0 7% % % % Other regions % % % % Reinsurance % % % % Total % % % % Major investments in Asia/BRICs since FY00 <Non-life> India ITGI (FY00) Taiwan Newa (FY02) China Tianan (FY05) Brazil Non-life (FY05) Singapore/Malaysia AGH (FY06) <Life> Thailand Life (FY01) China Sino-life (FY03) Brazil Annuity (FY05) Singapore/Malaysia AGH (FY06) Expansion of Local business Weight of local business in Asia region exceeded 70% and continues to increase. FY05 FY06 FY07 1H 73.0% 74.6% 78.8% * excl. China non-life business

32 Stage expansion of regions Overseas business (unit: bn yen) Premium income Adjusted earnings FY2006 FY2007 FY2006 FY2007 FY2006 FY2007 FY2006 FY2007 1st half 1st half results projections 1st half 1st half results projections Asia (177%) (178%) (260%) (367%) Non-life (151%) (125%) (100%) (109%) Life (268%) (392%) - - North & Central America (111%) (117%) (81%) (91%) Europe, Africa & Middle-east (141%) (121%) (73%) (47%) South America (128%) (131%) (58%) (5%) Non-life (118%) (128%) - - Life (163%) (136%) (229%) (163%) Others (87%) (97%) (86%) (120%) Non-life total (125%) (123%) (67%) (60%) Life total (208%) (213%) (1750%) - Direct total (137%) (139%) (107%) (86%) Reinsurance (123%) (119%) (176%) (115%) Grand total (136%) (137%) (130%) (88%) ROE % 9.0% 9.5% 7.2% * Figures in : Y on Y 31 Factors of increase/decrease in FY07 1H Life insurance in Asia: Addition of the two companies of the AGH group to the Millea group boosted both premium income and adjusted earnings. Supported by profits from stable asset management, embedded value (EV) of Sino Life Insurance substantially rose. Europe, Africa and Middle East: Adjusted earnings decreased due to the large-scale accidents caused by floods occurred in the UK. Non-life insurance in South America: Tokio Marine Segradora S.A. reported its adjusted earnings as an deficit of approx. 500 million yen in this interim period. A major factor attributable to this stagnation was in drop of premium income due to the intensifying auto-insurance market. Life-insurance in South America: OTC products including annuities and life insurance policies sold very well at the branch offices of Real Bank, a joint venture partner of Millea Holdings. Reinsurance: Against the backdrop of the on-going softening market, we restricted our underwriting criteria to select risks without loosening restrictions set for the underwriting businesses. As a result, the net premiums written increased by 23 % from a year earlier. In the meantime, net income for the current term significantly increased since there were no large-scale accidents. Topics of FY07 1H With the aim of further improving the group's consistent development of overseas insurance business strategy including reinsurance, we carried out organization reform in July 2007 to unify overseas business strategic planning and corporate management functions into the International Business Development Dept. at Millea Holdings. By strengthening the group's regional control functions represented by the International Business Development Dept. of Millea Holdings, Tokio Marine Europe for Europe and Tokio Marine Asia for Asia joined by Tokio Marine Americas newly founded as a company to manage the subsidiaries in the Pan American Area, Millea Holdings established a system allowing group companies to continue implementing strategy in a more flexible manner. Millea group's strengths in overseas insurance business Strong capital base, higher credit ratings and corporate brand with a competitive edge Know-how of insurance technologies and business promotion that have been built up through domestic and overseas direct non-life insurance businesses. i.e. product development; cumulative natural disaster risk management; sales promotion of the automobile dealing business Product development capability allowing for rapid growth of its domestic life insurance businesses and profit operation and asset management capabilities found in ALM that have been accumulated through product development experience Business techniques for underwriting and risk quantification relating to natural disaster risks and engineering risks which the group has gained through its domestic and overseas reinsurance businesses Business management related capability and strategic capability seen in M&A activities that the group has acquired from its insurance business expansion in the markets of Asia and BRICs attracting many insurers throughout the world.

33 Stage expansion of regions Reinsurance Purposes of expanding overseas reinsurance business: (i) Strengthening geographical diversification of underwriting risks (ii) Pursuing income Business development policy: Since reinsurance is a business with relatively high volatility in business performance, our policy will be to thoroughly implement profit-focused underwriting based on advanced risk-management techniques (unit: bn yen) NPW Adjusted earnings FY FY07 projections While the market has shown some softening in FY07, as a result of seeking to achieve steady growth while maintaining underwriting discipline, net premiums written are projected to increase by about 15% over the previous year Due to factors such as the lack of large-scale accidents (a state that has continued since last year), adjusted earnings are projected to increase over last year s figure 32 Trends in reinsurance market Natural-disaster reinsurance in Europe and North America: The demand and supply balance in the natural-disaster reinsurance market in North America, which had been tight as a result of the booming reinsurance market in 2006, showed a trend toward softening in London reinsurance and specialty insurance market: In addition to intensification of competition due to factors such as the inflow of Bermuda capital to London and expanding underwriting capacities of existing London market participants, the fact that there have been no major accidents in recent years has led the softening trend to continue. Asia: Overall softening of the market continues, resulting in severe competitive conditions. The Millea group s strengths in the reinsurance business High credit rating and sufficient capital The strength of the Tokio Marine brand and its high presence in reinsurance markets The Group s own advanced risk-management techniques Reinsurance facilities The Millea group currently conducts its reinsurance business through the following three subsidiaries: Tokio Millennium Re Bermuda Established March 2000 Capital US$650 million Main businesscatastrophe disaster risk reinsurance Tokio Marine Global London Operation startedjanuary 2005 Capital 125 million Main Business Underwrite facultative reinsurance Direct business included in part) Specialty Treaty insurance Tokio Marine Global Re Dublin EstablishedDecember 1996 Base Head office in Dublin Labuan branch Malaysia Capital US$63 million Main business Treaty insurance in Asian region Retention base for group's reinsurance

34 Concentration of group's comprehensive strength General businesses General businesses serving to expand the foundation of the insurance business by providing customers with safety and security Assistance BPO General human resources services Health care for senior people Conventional insurance Facility management Medical services Risk consulting The Millea group will develop its general business areas aggressively with the focus on creating new added value related to 'Safety and Security' before and after incidents to meet various customers' needs. These are beyond the framework of conventional insurance products that offer only monetary benefits. 33 Major topics in business expansion since January Millea Mondial established Integrated assistance services & BPO 2006 February Tokio Marine & Nichido Samuel established Health care facilities for the elderly 2007 February Tokio Marine & Nichido Medical Service set as a direct subsidiary of Millea HDMedical services 2007 October Tokio Marine & Nichido Risk Consulting set as a direct subsidiary of Millea HD Risk consulting Since 2006, we have made full-fledged entries into the new business fields of integrated assistance services and health care facilities for the elderly. Beginning in 2007, the two companies have become direct subsidiaries of Millea Holdings. By making them general operating direct subsidiaries, we can plan even greater expansion of business domains and scope than in the past. In the future too, we plan to continue developing new business fields and to expand sales through efforts such as developing new businesses in existing fields, to contribute to growing the revenues of the Millea group. Main group companies in General businesses Business category Human resources Facility management Risk consulting Medical services Health care for the elderly Assistance BPO Main group companies Tokio Marine & Nichido Career Service Tokio Marine & Nichido Facility Management Tokio Marine & Nichido Risk Consulting Tokio Marine & Nichido Medical Service Tokio Marine & Nichido Better Life Services Tokio Marine & Nichido Samuel International Assistance Millea Mondial FY2006 results FY2007 projections Earnings 69.6 bn yen 72.5 bn yen Profits after tax 0.9 bn yen 0.3 bn yen In the FY2007, earnings are projected to increase as expected, although increased costs due to restructuring of the internal infrastructure at Tokio Marine & Nichido Career Service and increased labor costs due to aggressive hiring at Tokio Marine & Nichido Medical Service are projected to lead to reduced income.

35 (trillion yen) Concentration of group's comprehensive strength Financial businesses Total assets under management in in the financial group reached 5.4 trillion yen, an increase of of 0.6 trillion yen y/y Trend of assets under management /03 05/03 06/03 07/03 07/09 Expansion of of investment trust trust In retail, promote investment trust sales through overthe-counter sales at banks 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. Profiles and activities of major financial business group companies Increase in in assets assets in in investment advisory Asset balance of investment advisory managed by TMA increased 300 bn yen from the end of the previous fiscal year to 4,200 bn yen at the end of Sept The 3rd largest discretionary account balance of pension investment in Japan as of the end of June 2007 The balance is steadily increasing, especially for products specializing in foreign bonds managed by Tokio Marine Rogge Asset Management.* *Joint venture with Rogge, the British asset management company. < 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, in addition to traditional assets (stocks and bonds in domestic and overseas markets). The end 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 the 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 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 and funds of hedge funds for institutional investors. < 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. 34

36 Improvement of capital efficiency Through Through integrated integrated risk risk management management conducted conducted on on a a quantitative quantitative and and systematic systematic basis, basis, the the Millea Milleagroup quantitatively quantitatively ascertains ascertains the the risks risks affecting affecting its its businesses businesses and and manages manages these these to to keep keep the the volume volume of of risks risks within within the the scope scope of of capital. capital. To To ensure ensure capital capital in in excess excess of of that that needed needed to to cover cover risks, risks, the the Millea Milleagroup is is focusing focusing on on strategic strategic business business fields fields and and new new businesses businesses with with high high profitability profitability and and growth growth potential potential and and on on increasing increasing its its capital capital efficiency efficiency by by enhancing enhancing measures measures for for return return to to shareholders. shareholders. ROE improving strategy, from both numerator and denominator Earnings Shareholders' equity Total amount of adjusted earnings for each segment Increase business revenue Manage capital level Total net asset in B/S Price-fluctuation reserves Catastrophe reserves Embedded value Total net asset in B/S Average capital at the beginning and end of the fiscal year and after tax basis Non-life insurance Life insurance Other business 35 Capital management strategy Flow Earnings Allocate normalized earnings to distribute to shareholders Stock (adjusted shareholders' equity) Excess Capital Several hundred bn yen as of Sep Invest in businesses with good profitability and growth prospects Minimum capital requirement Required capital Amount of capital required to continue business after risks materialize Risk capital Quantitative measurement of risk exposures such as underwriting and asset management risks applying with 99% shortfall method 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 also aim to conduct business investments and share repurchases using our excess capital

37 Improvement of capital efficiency Expansion of revenue and M&A strategy Track of business investment FY02 FY03 FY04 FY05 FY06 FY07 1H Total Business investment Domestic non-life Domestic life Overseas Financial General FY02 FY03 FY04 FY05 FY06 FY07 1H Total Major overseas business investment 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) Domestic non-life Domestic life Overseas Financial General 36 Development in Asia Apply our know-how to Asia market China Alliance with PICC (China) and Samsung Fire (Korea) Investment into Sino Life Investment into Tianan Investment into Zhong- Sheng Int'l Ins. Brokers Planned corporatization of TMNF Shanghai Branch India Establishment of ITGI Taiwan Investment into Newa Acquisition of Allianz President Merged Newa and Allianz President Thailand Investment into MLITH Entered into an alliance with BankThai Malaysia Acquired operation of Amanah General Obtained Takaful license (JV company) Acquisition of AGH Singapore Establishment of Millea Asia Establishment of TMN Retakaful Acquisition of AGH Premium income (bn yen) FY02 FY03 FY04 FY05 FY06 FY07 projection Key points for implementing merger and acquisition activities: (i) Clarification of objectives (profit, scale, sales network, customer base, etc.) (ii) Holding fast to disciplined corporate-value calculation and entry and exit rules (iii) Formulation of post-m&a plans and swift implementation of harmonized policies (iv) Securing management resources for M&A In particular, when implementing M&A activities in emerging markets, the possibility of additional post-m&a investment is a significant factor affecting growth potential and profitability

38 Improvement of capital efficiency Management of Capital level and Return to shareholders Total amount of return to shareholders (unit: bn yen, %) FY03 FY04 FY05 FY06 Average adjusted earnings Return to shareholders Dividends Share repurchases Consolidated net income Ratio of total return to shareholders 101% 132% 123% 129% FY03 FY04 FY05 FY06 Share repurchases Dividends Consolidated net income Adjusted earnings Adjusted earnings Ratio of total return to shareholders 65% 172% 79% 71% * Amounts of share repurchases are based on the terms from AGM(June) of the next year to AGM(June) of the year after the next year: accordingly the figure of 90 bn yen shown in FY06 is not completed 37 FY02 FY03 FY04 FY05 FY06 Cumulative Total FY07 projections *1 *2 *3 *4 *5 *6 *7 *8 Ordinary income 2, , , , , , ,757.0 Net income Adjusted earnings * Dividend total * Dividend per share *3 20 yen 22 yen 22 yen 30 yen 36 yen 48 yen Share repurchase * T.B.D. Amount of return to shareholders * T.B.D. Ratio of shareholder returns *6 209% 101% 132% 123% 129% 131% - Average of adjusted earnings * Pay-out ratio *8 19% 20% 19% 23% 25% 21% 28% For FY05 part, impacts made by a change of assumptions for calculating EV of domestic life insurance business have been already excluded. The figure for FY07 (projection) is based on the assumption that the number of stocks would be same as those of FY2006. All dividends above are shown on the basis of calculation after the stock split (into 500 shares) conducted in September, The corresponding fiscal year covers the year starting on the day when the regular shareholders meeting of the next year is convened. On FY05, 57.8 billion yen of stock exchange with Nisshin Fire & Marine Insurance has been excluded. The figure shown for FY06 is the share repurchases amount cap for one year. Amount of return to shareholders means the total amount of all dividends based on the previous financial settlement + share repurchases amount for the year. The ratio of shareholder returns means the percentage divided by the net income of the same fiscal year. Average of adjusted earnings are to be determined after the amount of shareholders return for each year was actually adjusted, considering the following rates/values of the past 3 to 5 years: "Average of adjusted earnings" and "separation of adjusted earnings for each year"; Actual shareholders equity base varied by share price fluctuations," "Percentage of increased EV of life insurance accounting for average of adjusted earnings," "Proportion of S/M of non-life insurance" and "Funding schedule of the fiscal year" etc. Proportion of dividend total of the fiscal year to the average of adjusted earnings for the corresponding year. Cancellation of repurchased shares Date Shares cancelled Amount cancelled (million yen) 2004/7/9 35,000,000 91, /3/14 30,000,000 88, /3/28 20,000,000 70, /3/19 19,000,000 80,629 Total 104,000, ,591 Share repurchase total for return to shareholders as of March 2007 Cancel ratio 106,383, %

39 Millea Holdings, Inc (Listed holding company) Tokio Marine Bluebell Re Tokio Marine & Nichido Tokio Marine & Nichido Life Tokio Marine & Nichido Financial Life Tokio Marine & Nichido Anshin Consulting Tokio Marine & Nichido Risk Consulting Tokio Marine & Nichido Medical Service Tokio Marine & Nichido Career Service Tokio Marine & Nichido Facilities Tokio Marine & Nichido Samuel Millea Mondial Millea Real-estate-risk Management Nisshin Fire Tokio Marine Asia Asia General Holdings Tokio Marine Newa Insurance IFFCO-TOKIO General Insurance The Tokio Marine & Fire Insurance Company Tokio Marine Insurans Sino Life Insurance Millea Life Insurance Tokio Marine Seguradora S.A. Brazil Non-life Singapore Holding company Taiwan Non-life India Non-life Singapore Non-life Malaysia Non-life China Life Thailand Life etc. Real Vida e e Previdencia S.A. Brazil Life Tokio Marine & Nichido Adjusting Services Tokio Marine & Nichido Systems Tokio Marine & Nichido Outsourcing Management Tokio Marine & Nichido Better Life Service International Assistance Tokio Marine Asset Management Tokio Marine Capital Tokio Marine Financial Solutions Tokio Marine Europe Insurance Tokio Marine Brasil Seguradora Tokio Millennium Re Tokio Marine Global Tokio Marine Global Re Tokio Marine Management Claims investigations System development & management Insurance office works Elderly related services Emergent assistance services Investment advisory & trust Private equity investment Derivatives Insurance Insurance Reinsurance Reinsurance Reinsurance Insurance agent etc. 38 Credit ratings & Solvency margin ratios Rating agencies Types of ratings Millea Holdings Tokio Marine & Nichido Nisshin Fire Tokio Marine & Nichido Life (as of Nov.20, 2007) Tokio Marine & Nichido Financial 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 JCR Senior long-term credit rating AA+ / stable AA / stable Insurance claims paying ability AA+ / stable AA+ / stable Long-tern rating AAA / stable AAA / stable AA / stable AAA / stable Insurance claims paying ability AAA / stable Solvency margin ratio (as of Sep. 30, 2007) 1,122.4% 977.5% 2,630.8% 1,076.1% Global Top 20 Insurance group < Market Capitalization > (as of Nov.21, 2007) Rank Short Name Market Cap 1 CHINA LIFE 211,571 2 BERKSHIRE HATHAWAY 207,440 3 AIG 130,185 4 PING AN 102,394 5 ALLIANZ 90,022 6 ING 80,486 7 AXA 80,067 8 GENERALI 63,677 9 MANULIFE 59, METLIFE 45, PRUDENTIAL US 41, ZURICH 39, MUNICH RE 38, AVIVA 33, PRUDENTIAL UK 31, TRAVELERS 32, MILLEA HOLDINGS 30, GREAT WEST LIFE 29, SUN LIFE 29, AFLAC 29,191 (unit: million $)

40 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 : 39