Tokio Marine Group FY2014 Business Plan Update November 2014 Tokio Marine Holdings, Inc. 0
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Table of Contents I. Tokio Marine Group Business Strategy 1. Progress of the Mid-Term Business Plan P. 5 2. Return to Shareholders & ERM P.10 3. Direction of the Next Mid-Term Business Plan P.14 II. Business Plan and Strategy by Business Domain 1. Domestic Non-Life P.21 2. Domestic Life P.26 3. International Insurance P.32 Reference P. 40 Abbreviations used in this material TMNF: Tokio Marine & Nichido Fire Insurance Co., Ltd. NF : Nisshin Fire & Marine Insurance Co., Ltd. TMNL : Tokio Marine & Nichido Life Insurance Co., Ltd. FL : Former Tokio Marine & Nichido Financial Life Insurance Co., Ltd. 2
Key Message for adjusted earnings and ROE in FY2014, the final year of the Mid-Term Business Plan, are exceeding the initial targets due to strong growth driven by the strategies executed in each business domain Adjusted Earnings : Projected to increase by 43.9B YoY to 322.0B exceeding the initial target of the Mid-Term Business Plan As a result, adjusted EPS is projected to increase by 15% YoY to 419 Adjusted ROE : Projected to improve by 0.3 points YoY to 7.9% (Level exceeding the initial target (7%) of the Mid-Term Business Plan) Return to Shareholders : Dividends are projected to increase for three consecutive fiscal year in accordance with profit growth Annual dividends per share is projected to increase by 10 YoY to 80 (Increase by 5 from the original projections) Share repurchases of up to 50B in 2H FY2014 has been resolved 3
Key Financial Indicators Expanding Profit + Enhancing Capital Efficiency + Expanding Shareholder Returns Adjusted earnings +341.5 Adjusted ROE DPS (Dividends per share) +30 209.1 278.1 322.0 billion yen 291.0 +8.6pt 50 55 70 75 80 yen - 19.5 FY11 FY12 FY13 FY14 (Original Revised) 6.7% 7.6% 7.9% (Revised) 7.4% (Original) FY11 FY12 FY13 FY14 (Original Revised) Trend of total dividends Adjusted EPS (Earnings per share) - 25 272 +444 362 379 419 yen FY11 FY12 FY13 FY14 (Original Revised) -0.7% FY11 FY12 FY13 FY14 : Payout ratio to average adjusted earnings (excluding EV) 4 38.3 48% 42.2 +23.1 53.7 50% 49% Share repurchases 61.4 billion yen 57.5 FY11 FY12 FY13 FY14 (Original Revised) Resolved share repurchases of up to 50B in 2H FY2014
I. Tokio Marine Group Business Strategy 1. Progress of the Mid-Term Business Plan 2. Return to Shareholders & ERM 3. Direction of the Next Mid-Term Business Plan 5
1-1. Progress of the Mid-Term Business Plan (Adjusted Earnings / 2Q FY2014 Results) (billions of yen) Group Total 108.2 +84.7 192.9 Increased by 84.7B YoY due to profit growth in domestic non-life and domestic life, despite the impact of natural catastrophes etc. in international insurance FY2013 1H FY2014 1H Domestic Non-Life 33.6 75.7 FY2013 1H +42.0 FY2014 1H TMNF: Increased due to a steady growth in net premiums written and an improvement in underwriting results mainly in auto NF: Increased due to an improvement in underwriting results mainly in auto and fire Domestic Life 0.6 FY2013 1H +52.8 53.5 FY2014 1H TMNL: Increased due to the following factors: i. Increase in EV associated with a steady increase in policies ii. Reversal effect of the FY2013 decrease in EV due to the change in risk discount rate -9.9 International Insurance 71.0 61.1 FY2013 1H FY2014 1H Steady progress in line with the original projections, although decreased YoY mainly due to an increase in natural catastrophe losses and the reversal effect of the decrease in net incurred losses related to Thai flood recorded in FY2013 6
1-2. Remarkable Progress of the Mid-Term Business Plan Profit growth exceeding the initial target (Adjusted earnings, billions of yen) 209.1 278.1 291.0 34.0 106.0 322.0 (+31.0 from the original projections) 108.0 (+2.0) Initial Target of the Mid-Term Business Plan 230B - 260B Domestic Non-life 35% 48.3 110.3 104.5 75.0 89.0 (+14.0) 80-90 60-70 Domestic Life 25% International Insurance 40% -19.5 69.2 136.9 105.0 120.0 (+15.0) 90-100 Financial and General -18.7 (Original) (Revised) FY2014 FY2011 FY2012 FY2013 Mid-Term Business Plan "Innovation and Execution 2014" FY2014 (Target Level) *3 Domestic Non-life *1 Combined ratio NPW growth rate W/P: 103.3% (E/I : 103.8%) 102.3% 97.4% (99.6%) 104.9% 91.2% (97.2%) 105.2% 95.2% (93.5%) 102.4% 94.2% (93.5%) 102.4% (103.9%) *2 Combined ratio 95% No.1 growth in the industry Domestic Life EV increase 15.9B 110.3B 104.5B 75.0B 89.0B EV increase (3 year total) 180B International Insurance Adjusted earnings - 11.9B 69.2B 136.9B 105.0B 120.0B Adjusted earnings 100B Total Adjusted ROE -0.7% 6.7% 7.6% Adjusted ROE 7%~ *1: Figures of TMNF *2: NPW growth rate excluding the impact of the reorganization of the U.S. branch as an overseas subsidiary *3: Applied share price, FX rates, and interest rates are as of end-mar. 2012. Projected profit level is based on the assumption that natural catastrophes are projected to occur on an average level, etc. 7 7.4% 7.9%
1-3. Progress of the Mid-Term Business Plan (FY2014 Adjusted Earnings ) Business Domain Original (a) Revised (b) (billions of yen) Difference (b) - (a) Domestic Non-Life 34.0 106.0 108.0 2.0 TMNF 35.0 107.0 103.0-4.0 NF 2.7 3.0 8.0 5.0 Other - 3.7-4.0-3.0 1.0 Domestic Life *1 104.5 75.0 89.0 14.0 TMNL *2 90.9 75.0 90.0 15.0 FL *3 14.0 0.0 Other - 0.4 0.0-1.0-1.0 International Insurance 136.9 105.0 120.0 15.0 North America 73.4 67.0 74.0 7.0 Europe (incl. Middle East) 23.2 16.0 16.0 0.0 South & Central America 1.8 2.0 5.0 3.0 Asia 23.8 9.0 12.0 3.0 Reinsurance 14.9 9.0 9.0 0.0 International Non-Life *4 136.9 103.0 116.0 13.0 International Life 2.2 4.0 6.0 2.0 Financial & General 2.5 5.0 5.0 0.0 Group Total 278.1 291.0 322.0 31.0 Adjusted ROE (Group total) 7.6% 7.4% 7.9% 0.5% *1: Excluding capital transactions FY2013 Results FY2014 *2: FY2014 (Revised) reflects the impact of the merger of TMNL and FL in Oct. 2014 *3: From FY2014 (Revised), figures are included in TMNL *4: International Non-Life figures include some life insurance figures of composite overseas subsidiaries Group total adjusted earnings revised upward by 31B from the original projections to 322B. Projected Adjusted ROE is 7.9%. Domestic Non-Life TMNF:Downward revision by 4B to 103B Decrease in net incurred losses in auto Negative impact* from the depreciation of the yen *Increase in provision for reserves for foreign currency denominated outstanding claims and losses on FX derivatives Revision of net incurred losses occurred in the previous years in fire and other lines NF: Upward revision by 5B to 8B Decrease in net incurred losses mainly in auto and fire Domestic Life TMNL:Upward revision by 15B to 90B Change in risk discount rate reflecting the interest rate decline Increase in value of new business due to a steady increase in new policies Impact of the merger with FL International Insurance Upward revision by 15B to 120B Increase due to the depreciation of the yen Increase in North America and South & Central America, etc. TMNF Adjusted Earnings Net income of TMNF for accounting purposes + Provision for catastrophe reserves, etc. net of taxes + Provision for price fluctuation reserves, net of taxes - Gains/losses on sales or evaluation of ALM bonds and interest rate swaps, net of taxes - Gains/loses on sales or evaluation of stocks and properties held, net of taxes 8 - Other extraordinary profits/losses and valuation reserves etc., net of taxes = Adjusted earnings of TMNF 227.0B 2.8B 2.5B 1.2B 51.6B 76.5B 103.0B
1-4. Progress of the Mid-Term Business Plan (Asset Management) Group asset management concept With asset and liability management (ALM) at the core, we aim to secure sufficient liquidity and profit Aim to enhance profitability within the range of risk tolerance while taking the characteristics of insurance liabilities into consideration and continuously ensuring liquidity and risk controls through ALM We will carefully monitor the investment environment and respond in a flexible manner, although there are no changes to our Group's concept for asset management Continue the sales of business-related equities from the perspective of enhancing capital efficiency Asset composition of TMHD (Consolidated) (as of the end of Sept. 2014) Sales of business-related equities during the Mid-Term Business Plan (at TMNF) Others: 2.8T Mainly tangible fixed assets and intangible fixed assets, etc. Other securities: 1.9T Mainly assets in separate accounts held by Domestic Life (FL) Domestic equities: 2.5T Mainly business-related equities held by Domestic Non-Life (TMNF) Monetary receivables bought : 0.9T 9.9% 12.8% Mainly absolute return investment & lending by Domestic Non-life (TMNF) and overseas subsidiaries 5.0% 14.6% 1.9% Total assets 19.7T Cash and deposits: 0.4T 16.1% 2.3% 37.3% Domestic bonds : 7.3T Domestic government bonds (JGB): Approx. 6.6T Mainly bonds for the purpose of ALM by Domestic Life and Non-Life Foreign securities : 3.1T Mainly local country bonds held by overseas subsidiaries mainly in Europe and the U.S. 300B Target (Aggregate of 3 years) Approx. 324B Loans: 0.3T 9 Approx. 100 109 115 Progress FY2014 () FY2013 FY2012
I. Tokio Marine Group Business Strategy 1. Progress of the Mid-Term Business Plan 2. Return to Shareholders & ERM 3. Direction of the Next Mid-Term Business Plan 10
2-1. Return to Shareholders Attractive dividends Primary means of shareholder returns is dividends, which we plan to increase in line with profit growth Target payout ratio level is 40% to 50% of average adjusted earnings (excluding EV) Interim dividends is raised by 10 YoY to 40 per share FY2014 annual dividends per share is projected to be raised by 10 YoY to 80 ( 61.4B in total) + Flexible share repurchases We intend to conduct share repurchases in a flexible manner based on a comprehensive assessment of market conditions, our capital levels, business investment opportunities, and other relevant factors Resolved share repurchases of up to 50B in 2H FY2014 Regarding new business investments, continue to seek for high quality investment opportunities globally Expected trend for dividends per share 70 80 yen (Revised projection) : Dividends per share (yen) : Payout ratio *1 48 48 50 50 50 55 36 33% 39% 48% 46% 48% 48% 50% 49% (billions of yen) 2006 2007 2008 2009 2010 2011 2012 2013 2014 (Revised) Adjusted earnings 169.7 143.2-52.5 165.4 72.0-19.5 209.1 278.1 322.0 Adjusted earnings (excluding EV) 121.5 128.1 4.7 113.4 44.5-35.4 98.8 173.6 233.0 Average adjusted earnings (excluding EV) *2 90.0 100.0 80.0 85.0 80.0 80.0 85.0 110.0 145.0 Dividends Total 29.8 38.7 38.0 39.4 38.6 38.3 42.2 53.7 61.4 () *1: Proportion to average adjusted earnings (excluding EV) 11 *2: Average adjusted earnings (excluding EV) excludes effects from the Great East Japan Earthquake and Thai Flood
2-2. Enterprise Risk Management (ERM) / Economic Solvency Ratio Maintain financial soundness Balance risk and capital to maintain AA credit ratings Improve natural catastrophe risk management Ensure our financial base can withstand catastrophic risks Improve profitability Sustainable profit growth and improve capital efficiency Invest in new businesses to improve capital efficiency Improve the profitability of existing businesses Continue sales of business-related equities Control risk and capital in accordance with risk appetite* * Insurance risk control : Pursue sustainable growth, risk diversification (stabilization), and improvement of capital efficiency through global business expansion Investment risk control : Secure liquid assets and stable profits mainly through ALM Economic Solvency Ratio (ESR) 4.3 trillion yen Mar. 31, 2014 Factors causing change in net asset value Contribution of 1H FY14 adjusted earnings Increase in unrealized gains of business-related equities Adjustment of capital level etc. 140% 148% 3.1 trillion yen Factors causing change in risk capital Sales of business-related equities Increase in risks of businessrelated equities due to rise in stock price etc. 4.9 trillion yen 3.3 trillion yen Sep. 30, 2014 <Impact of market changes on ESR> Interest rates: Limit impact from interest rate changes through ALM FX rates: Limited positive impact, as depreciation of the yen increases net asset value of overseas subsidiaries, but also increases FX risks Share price: Significant impact on ESR due to the market value fluctuation of business related equities As of Sep. 30, 2014 148% 14,827 yen Nikkei Stock Average 16,173 yen Share price: +30% Net Asset Value: Consolidated net asset value + Various reserves (after-tax basis) + Value of life insurance policies in-force -Goodwill and other items -30% 142% Risk Capital: 99.95% VaR, after taking account of diversification effects ESR: Net asset value / Risk capital 12 154%
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I. Tokio Marine Group Business Strategy 1. Progress of the Mid-Term Business Plan 2. Return to Shareholders & ERM 3. Direction of the Next Mid-Term Business Plan Details of the plan including quantitative targets will be released following FY2014 results 14
Strategic Changes in Our Business Portfolio Enhancing our capabilities to accelerate profit growth momentum and improve profit stability through strategic changes in our business and asset portfolio FY2006 Insurance Premiums (Net premiums written + Life insurance premiums) 6% 12% International Insurance FY2014 ()* 31% Domestic Non-Life 2,464.0 billion yen 82% Domestic Life 8% 3,530.0 billion yen 61% Asset Composition 25% 5% 17.2 trillion yen 68% 22% 19.7 trillion yen 36% 41% *Asset composition is as of Sep. 30, 2014 Adjusted Earnings 17% 169.7 billion yen 28% 53% 37% 322.0 billion yen 34% 15 28%
From Profit Recovery to Sustainable Profit Growth We have seen profitability improvement in domestic non-life, which has been an important management issue Business portfolio is becoming well balanced as a result of growth in domestic life and international insurance Shifting to the stage of delivering sustainable profit growth by accurately capturing changes in the business environment and executing strategic moves for future growth Adjusted earnings (billions of yen) Sustainable profit growth stage Adjusted ROE (%) <Expected changes in the business environment> Demographics of Japan Customer needs and risks due to technological innovation Global economy and financial environment Climate and an increase in natural catastrophes Global based capital requirements FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 () Adjusted Earnings 169.7 143.2-52.5 165.4 72.0-19.5 209.1 278.1 322.0 Adjusted ROE 3.8% 3.5% -1.7% 5.8% 2.4% -0.7% 6.7% 7.6% 7.9% 16
Initiatives for Sustainable Profit Growth - 1 Achieving excellence in our business platform as the core of our growth accompanied by strategic moves for sustainable profit growth Enhancement Unlocking our potential Excellence Advancing our business platform Expansion Evolution Pursuing growth opportunities Capitalizing on changes Long-term Vision A global insurance group that delivers sustainable growth by providing safety and security to customers worldwide - Our timeless endeavor to be a Good Company - 17
Initiatives for Sustainable Profit Growth - 2 Enhancement Unlocking our potential Domestic insurance: Enhancing the integrated business model for life and non-life, strengthening claims-service capabilities, and further utilizing our risk consulting service International insurance: Enhancing organic growth Evolution Capitalizing on changes Effectively forecasting and proactively meeting the emerging and evolving needs of the market and our customers Strengthening R&D to convert new risks into our business opportunities Expansion Pursuing growth opportunities Promoting disciplined business investment to capture growth opportunities globally Enhancing our diversified business portfolio based on risk appetite Excellence Advancing our business platform Advancing ERM and improving risk portfolio to sustainably enhance profit growth, capital efficiency, and financial soundness Strengthening our business platform to further reinforce our globalized business Developing a diverse workforce with a strong customer orientation to drive sustainable growth 18
Framework of the Next Mid-Term Business Plan Implementing Enterprise Risk Management (ERM) to realize sustainable profit growth and higher capital efficiency, while maintaining financial soundness Generate capital and cash Achieve sustainable profit and improve the risk portfolio in each business domain Efficient deployment of capital and cash Achieve sustainable profit growth in each business domain Domestic non-life: Profit growth as the core business of the group Domestic life : Profit growth while maintaining financial soundness as a growth driver of the group International : Profit growth while globally diversifying risk as a growth driver of the group Improve the risk portfolio Reduce the risks associated with business-related equities Strengthen control of natural catastrophe risks Enterprise Risk Management (ERM) Invest for growth Invest in new businesses with high capital efficiency Invest today to build foundations for our growth tomorrow Return to shareholders Increase dividends through profit growth Achieve an appropriate level of capital via flexible repurchases of shares Improve capital efficiency by diversifying our business portfolio Sustainable profit growth + Enhance ROE 19 + Maintain financial soundness
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II. Business Plan and Strategy by Business Domain 1. Domestic Non-Life 2. Domestic Life 3. International Insurance 21
1-1. TMNF FY2014 Net premiums written is projected to exceed 2T as in the original projections as a result of the execution of growth strategies Adjusted earnings is revised downward mainly due to the impact of the depreciation of the yen (Excluding this impact, adjusted earnings is projected to exceed the original projections) Net Premiums Written (billions of yen) CAGR+4.1% 1,783.0 1,869.6 1,966.3 +2.4% 2,014.0 (±0) * Projected to increase by 2.4% YoY to 2,014B, a similar level as the original projections (3.9% increase YoY excluding the impact of the reorganization of the U.S. branch as an overseas subsidiary) CAGR during the Mid-Term Business Plan is projected to be 4.1% FY2011 FY2012 FY2013 FY2014 (Original Revised) Adjusted Earnings (billions of yen) - 18.7 54.6 35.0 +68.0 103.0 (- 4.0)* Despite the negative factors * associated with the depreciation of the yen, adjusted earnings is projected to be at a similar level as the original projections, reflecting an improvement in underwriting results in line with the projections * Increase in provision for reserves for foreign currency denominated outstanding claims and losses on derivatives FY2011 FY2012 FY2013 FY2014 (Original Revised) * Figures in ( ) show changes 22 from the original projections
1-2. TMNF Combined Ratio Despite the impact of the consumption tax hike, combined ratio is projected to improve in line with the original projections owing to measures to improve profitability Combined Ratio (Private insurance basis) 103.8% E/I basis *1 Major factors of change in FY2014 combined ratio (Change from the original projections) 103.3% 99.6% W/P basis 97.4% 97.2% 91.2% * Figures in ( ) show changes from the original projections 94. 2% (- 1.0pt)* 93.5% (±0.0pt)* FY2011 FY2012 FY2013 FY2014 (Revised) 1. E/I loss ratio (Same level as the original projections) Projected to improve in line with the original projections due to the progress of improvement in underwriting results in auto, despite factoring in the negative impact such as an increase in outstanding claims reserves associated with the depreciation of the yen Natural catastrophe losses projected at 40B, the same level as the original projections FY2014 FY2011 FY2012 FY2013 (Original) (Revised) E/I loss ratio 69.8% 66.8% 65.0% 61.2% 61.0% Excluding natural catastrophes 61.3% 62.8% 60.1% 58.9% 58.6% W/P loss ratio 69.3% 64.6% 59.0% 62.9% 61.6% Excluding natural catastrophes *2 59.4% 61.7% 57.0% 60.6% 59.3% Expense ratio 34.0% 32.8% 32.2% 32.3% 32.6% 2. W/P loss ratio (Improve by 1.0 point from the original projections) Projected to improve by 1.0 point mainly due to revising the projections for claims paid in auto *1: Net E/I C/R = E/I loss ratio + W/P expense ratio *2: Only natural disasters occurred in each fiscal year are excluded 23
1-3. TMNF Profitability Improvement in Auto Loss ratio is improving owing to the measures to improve profitability Continue to closely watch the trend of an increase in unit repair cost, etc. and implement timely and appropriate measures Loss Ratio W/P loss ratio 70.7% 70.4% 69.4% 67.8% E/I loss ratio 65.3% 63.6% * Figures in ( ) show changes from the original projections 63.1% 62.7% (- 2.7pt)* (- 2.2pt)* Major factors of change in FY2014 loss ratio (Change from the original projections) 1. E/I loss ratio (Improve by 2.7 points from the original projections) Reflecting the decrease in accident frequency in the first half 2. W/P loss ratio (Improve by 2.2 points from the original projections) Projected to improve due to the same factor above FY2011 FY2012 FY2013 FY2014 (Revised) Per-policy premium *1 101.2 103.1 105.2 107.1 *2 Policy renewal rate 95.1% 95.3% 95.6% 95.4% *2 * 1: FY2010 per-policy premium of non-fleet auto (managerial accounting basis) is set at index value of 100 * 2: FY2014 figures are as of the end of Sep. 2014 FY2014 FY2011 FY2012 FY2013 (Original) (Revised) W/P C/R 102.6% 98.5% 94.0% 95.5% 93.5% Net E/I C/R *3 102.9% 100.2% 95.7% 96.5% 94.0% Rate revisions and profitability improvements per FY (excluding revision of the Grade Rating System in non-fleet auto insurance) (billions of yen) Revision FY11 FY12 FY13 FY14 FY15 FY16 Jul. 2009 1.0 Jul. 2010 13.0 1.0 Jan. 2012 3.0 18.0 7.0 Oct. 2012 1.0 8.0 1.0 Oct. 2013 4.0 26.0 4.0 Oct. 2014 3.0 15.0 3.0 * 3: Net E/I C/R = E/I loss ratio + W/P expense ratio Total 17.0 20.0 19.0 30.0 19.0 3.0 24
1-4. TMNF - Business Strategy Going Forward Achieve sustainable profit growth by capitalizing on changes as the core business of the Group Pursuing further growth in the market and customer base Achieving sustainable growth by promoting measures such as the integrated business model for life and non-life, and pursuing further growth in the customer base Enhancing the service level of "sense of security before and after" provided to customers by strengthening claims-service capabilities and further utilizing our risk consulting service Proactive actions capturing changes Effectively meeting the emerging and evolving needs of the market and our customers Reinforcing our internal structure and strengthening R&D to establish a business model which will support future profit growth Stabilizing and improving the combined ratio Aiming a level that ensures stable profit by continuously strengthening underwriting discipline and controlling business expenses, etc. 25
II. Business Plan and Strategy by Business Domain 1. Domestic Non-Life 2. Domestic Life 3. International Insurance 26
2-1. Domestic Life FY2014 TMNL and FL merged on Oct. 1, 2014 (Name of the new company: Tokio Marine & Nichido Life Insurance Co., Ltd. (TMNL)) Annualized Premiums (billions of yen) New Policies Annualized Premiums In-force Policies Annualized Premiums Total of TMNL and FL (including impact of the merger in the revised projections) TMNL (excluding impact of the merger) FY2013 Results Original (a) FY2014 Revised (b) Difference (b)-(a) FY2013 Results Original (a) FY2014 Revised (b) Difference (b)-(a) 95.0 90.5 109.9 19.3 749.8 782.2 795.7 13.4 95.0 90.5 109.9 19.3 533.3 584.3 603.3 19.0 Fiscal Year-end EV and Adjusted Earnings (billions of yen) Fiscal Year-end EV Adjusted Earnings * Total of TMNL and FL (including impact of the merger in the revised projections) TMNL (excluding impact of the merger) FY2013 Results FY2014 Original Revised FY2013 Results Original (a) FY2014 Revised (b) Difference (b)-(a) 736.2 803.3 818.1 104.9 75.0 90.0 15.0 680.4 747.2 754.9 90.9 75.0 83.0 8.0 * Excluding capital transactions 27
2-2. TMNL FY2014 Annualized Premiums (billions of yen) New Policy TMNL In-force Policy FL In-force Policy <Excluding impact of the merger> 584.3 533.3 470.4 109.9 603.3 <Including impact of the merger> 109.9 795.7 FL TMNL Annualized Premiums Revised upward from the original projections in both new policies and in-force policies, reflecting the recent favorable results 80.6 95.0 90.5 FY2012 FY2013 FY2014 (Original) (Revised) FY2014 (Revised) Fiscal Year-end EV (billions of yen) <Excluding impact of the merger> EV increase *1 75.0 83.0 <Including impact of the merger> 90.0 FL TMNL FY2014 Year-end EV <Excluding impact of the merger> EV increase revised upward by 8B from the original projections Steady increase in new policies Change in risk discount rate reflecting the interest rate decline FY2012 FY2013 FY2014 (Revised) (Original) FY2014 (Revised) Fiscal Year-end EV 601.1 680.4 747.2 754.9 818.1 EV increase *1 89.7 90.9 75.0 83.0 90.0 <Including impact of the merger> EV increase revised upward by 15B from the original projections due to the above factors, as well as the recording of deferred tax assets of FL EV increase *2 61.5 73.2 74.0 76.0 *1: Excluding capital transactions Risk discount rate 7% 7.53% 7.53% 7.43% *2: Excluding capital transactions, and effects of changes in interest rates (including change in risk discount rate) and underlying assumptions 28
2-3. TMNL Product Strategy Sustainable growth with profitability by promoting "Premium Series" Life Insurance Revolution to Protect One s Living Hospitalization and surgical treatment <medical insurance> Outpatient treatment (after discharge) Inability to work (home care) Nursing care requirement (permanent disability) Cultivate potential market (Life insurance to protect one's living) Death <conventional life insurance> Whole life+nursing care "Long-life Support Whole Life" Lineup of "Premium Series" Released Nov. 2010 Medical+Inability to work "Medical Kit" with inability-to-work support Released Aug. 2011 Household income+inability to work "Household Income Term" with inability-to-work benefit Released Oct. 2012 Medical+Refund "Medical Kit R" Released Jan. 2013 Lenient-underwriting medical+refund "Medical Kit Love R" Released Feb. 2014 Growth exceeding market (Growth rate of in-force policies annualized premiums) +15% +10% +5% FY12 FY13 FY14 1Q TMNL Market total Source: The Life Insurance Association of Japan Sales of premium series is increasing as planned (New policy annualized premiums basis) 19.2 17.4 (billions of yen) Steady increase in EV (Trend of EV increase *1 ) 73.2 76.0 (billions of yen) 8.8 61.5 FY12 FY13 FY14 FY12 FY13 FY14 *1: Excluding capital transactions, and effects of changes in interest rates (including change in the risk discount rate) and underlying assumptions * FY2014 projections for TMNL shown in p.29-30 are individual company figures which do not reflect the impact of the merger with FL in Oct. 2014 29
2-4. TMNL Channel Strategy Utilization of Multiple Sales Channels Centering on Non-Life Agents Achieving growth in all channels Premiums written on a managerial accounting basis 55% Non-Life Agents Channel Non-life customer development by further promoting integration of life and non-life sales Life Partner * Non-life customer development through sales with consultation expertise Non-Life Agents Life Partner* 10% Life Professionals Market development centering on sales of unique products Life Professionals Bancassurance 25% 10% Bancassurance Cultivate banks' customer base through sales of highly unique products centering on installment plans FY12 FY13 FY14 * : Life Partner is TMNL's life insurance sales staff Non-life customer development through integration of life and non-life sales Roll out of solicitation (including proposal) using tablet PCs Auto Tokio Marine & Nichido Fire Tokio Marine & Nichido Life Non-life Insurance Agents Fire Death Non-Life Policy Holder (Individual & Corporate) P.A. Nursing Care 30 Medical Further promoting integrated consulting sales of life and non-life insurance
2-5. TMNL - Business Strategy Going Forward Achieve profit growth while controlling risks as a growth driver Strengthening growth potential Strengthening sales channel support by substantially enhancing our sales effectiveness and unlocking the potential of the integrated business model for life and non-life Promoting Life Insurance Revolution to Protect One s Living Expanding our unique product line-up (Premium Series) which is a source of stable profit, mainly focusing on the increasing demand in the living-protection market Developing highly competitive products that accurately meet the customer needs and thus contribute to the increase in the number of customers Establishing infrastructure for future growth Renovating our new-policy management IT system which will enable flexible product development Establishing infrastructure to support the advancement of our insurance business 31
II. Business Plan and Strategy by Business Domain 1. Domestic Non-Life 2. Domestic Life 3. International Insurance 32
3-1. International Insurance Business FY2014 Upward revision in both top-line and bottom-line despite the continuing softening of the market Net Premiums Written (billions of yen) +103.0 1,212.0 1,074.5 1,109.0 734.3 Net Premiums Written Upward revision by 103B from the original projections to 1,212B, mainly due to the effect of the depreciation of the yen and premium growth in North America, South & Central America, Reinsurance, and Life, etc. Adjusted Earnings Applied FX rate (USD/JPY) FY2012 JPY 86.5 As of end-dec. 2012 FY2013 JPY 105.3 As of end-dec. 2013 FY2014 (Original) JPY 102.9 As of end-mar. 2014 FY2014 (Revised) JPY 109.4 As of end-sep. 2014 Upward revision by 15B from the original projections to 120B, due to the effect of the depreciation of the yen and profit growth mainly in North America and South & Central America Adjusted Earnings (billions of yen) Special factors in FY2013* 136.9 Approx.100.0 69.2 105.0 +15.0 120.0 Business and Geographical Portfolio Breakdown (FY2014 projections / Adjusted earnings basis) Asia (Non-life) South & Central America Reinsurance 7% 4% 10% 5% Life 16% Asia (Life) Applied FX rate (USD/JPY) FY2012 JPY 86.5 As of end-dec. 2012 FY2013 JPY 105.3 As of end-dec. 2013 FY2014 (Original) JPY 102.9 As of end-mar. 2014 FY2014 (Revised) JPY 109.4 As of end-sep. 2014 North America 北米 61% 61% * Special factors in FY2013: Low level of incurred losses related to natural catastrophes, Decrease in reserves related to Thai flood etc. 33 Europe 13% Non-life 84%
3-2. International Insurance Business FY2014 by Region (billions of yen, except for %) Net Premiums Written Adjusted Earnings Applied FX rate USD/JPY FY2013 Results As of end- Dec. 2013 FY2014 FY2013 Results Original (a) Revised (b) Original (a) Revised (b) As of end- As of end- YoY (Ref.) As of end- As of end- As of end- Difference YoY Mar. 2014 Sep. 2014 Dec. 2013 Mar. 2014 Sep. 2014 (b - a) (Excluding FX effects) *3 FY2014 Difference (b - a) JPY 105.3 JPY 102.9 JPY 109.4 Change % JPY 105.3 JPY 102.9 JPY 109.4 Change % YoY (Ref.) YoY (Excluding FX effects) *3 North America 520.9 528.0 570.0 42.0 49.1 9% 5% 73.4 67.0 74.0 7.0 0.6 1% - 3% Philadelphia 260.8 270.0 293.0 23.0 32.2 12% 8% 36.0 33.0 34.0 1.0-2.0-5% - 8% Delphi 197.7 197.0 214.0 17.0 16.3 8% 4% 33.2 30.0 36.0 6.0 2.8 8% 4% Europe & Middle East Tokio Marine Kiln (Lloyd's business) South & Central America Asia Reinsurance Total Non-Life *1 157.6 164.0 156.0-8.0-1.6-1% - 3% 23.2 16.0 16.0 0.0-7.2-31% - 32% 130.7 136.0 130.0-6.0-0.7-1% - 3% 22.3 16.0 16.0 0.0-6.3-27% - 29% 107.1 119.0 126.0 7.0 18.9 18% 18% 1.8 2.0 5.0 3.0 3.2 167% 166% 100.6 105.0 114.0 9.0 13.4 13% 9% 23.8 9.0 12.0 3.0-11.8-47% - 49% 107.3 106.0 132.0 26.0 24.7 23% 19% 14.9 9.0 9.0 0.0-5.9-42% - 44% 993.7 1,022.0 1,098.0 76.0 104.3 10% 7% 136.9 103.0 116.0 13.0-20.9-15% - 18% Life 80.7 87.0 114.0 27.0 33.3 41% 36% 2.2 4.0 6.0 2.0 3.8 192% 181% Total *2 1,074.5 1,109.0 1,212.0 103.0 137.5 13% 9% 136.9 105.0 120.0 15.0-16.9-12% - 15% *1: Total Non-Life figures include some life insurance figures of composite overseas subsidiaries *2: After adjustment of head office expenses *3: Local currency basis 34
3-3. Growth Strategy in Developed Countries North America FY12 24.5 FY13 36.0 FY14 (Original Revised) NPW growth rate *1 + 10% +11% + 6% + 8% C/R Adjusted earnings (billions of yen) 93% 90% 93% (+2pt) *2 34.0 (+1.0) *2 Steady growth in both new and in-force policies due to a product strategy focusing on niche market Although C/R is projected to increase from the original projections due to the impact of natural catastrophes, adjusted earnings is revised upward due to the depreciation of the yen and strong top-line growth 110% 100% 90% 80% C/R compared with the market U.S. market average Philadelphia FY09 FY10 FY11 FY12 FY13 Source : A.M. Best FY14 FY12 FY13 (Original Revised) NPW growth rate *1 + 11% +10% + 2% + 4% C/R Adjusted earnings (billions of yen) 97% 97% 11.9 33.2 96% (±0pt) *2 Further expanding profit through continuous rate increase in excess workers compensation insurance and profound investment expertise Adjusted earnings is revised upward from the original projections mainly due to an increase in investment income, in addition to the depreciation of the yen 36.0 (+6.0) *2 Composition of premiums income (FY2013) Excess W/C Non-life 21% 34% *1: Local currency basis 35 *2: Figures in ( ) show changes from the original projections Others (Life) 7% Others (Non-life) 13% Life 66% Group life 24% Disability 35%
3-4. Growth Strategy in Developed Countries Europe Reinsurance (Lloyd s business) C/R Adjusted earnings (billions of yen) FY12 92% 5.6 FY13 FY14 (Original Revised) NPW growth rate *1 + 20% - 2% + 5% -3% 79% 86% (±0pt) *2 C/R 88% 85% Adjusted earnings (billions of yen) 22.3 16.0 10.2 (±0) *2 FY14 FY12 FY13 (Original Revised) NPW growth rate *1 + 24% + 12% + 1% + 19% 14.9 94% (+2pt) *2 9.0 (±0) *2 Under Tokio Marine Kiln, an intermediate holding company for European operations, further streamlining the business structure in Europe Despite the downward revision in top-line due to the softening of the market, projected to sustain profitability maintaining strict underwriting discipline Premium composition *3 of Tokio Marine Kiln (Lloyd s business) Opened U.S. branch in June 2014 and strengthened its strategic global expansion in Europe, North America, and Oceania Reduce earnings volatility by diversifying the portfolio Following a benign natural catastrophe activity in FY2013, project slightly reduced earnings in FY2014 due to normal catastrophe activity by line by region 2013 Re-domestication to Switzerland Expanding global network of offices 財物 Property 44% UK 19% Continental 2014 海上 Marine 15% 9% Europe Opened US branch 再保険 Reinsurance 23% USA 35% 航空 Aviation 4% Other 37% 傷害 医療 Accident & Health 9% 2010 その他 Other 3% *1: Local currency basis Opened Australia branch 生保 Life 2% *2: The figures in ( ) show changes from the original projections *3: GWP composition on a syndicate 100% basis, as of 31 Dec. 2013 36
3-5. Growth Strategy in Emerging Countries Key Strategies in Emerging Countries (billions of yen) Achieve further profit growth by accelerating business deployment to the retail market and expanding distribution channels Asia Non-life Asia Life South & Central America C/R *1 91% 88% 94%(+1pt) *2 C/R 105% 103% 97% (- 3pt)* 2 Net premiums written 79.9 100.6 114.0 (+9.0) *2 Net premiums written 51.3 80.7 114.0 (+27.0) *2 Net premiums written 79.7 107.1 126.0 (+7.0) *2 FY12 FY13 FY14 (Original Revised) <Key strategies> Thailand / Malaysia / India etc. Aim to expand distribution channels in the auto insurance business and develop new products FY12 FY13 FY14 (Original Revised) Singapore / Malaysia / Thailand Promote expansion of distribution channels and development of products FY12 FY13 FY14 (Original Revised) Brazil Continuous growth in the auto insurance business and sales expansion in commercial lines and life insurance China Maintain profitability in Japanese corporate customer business and establish growth platform in the local business India / Indonesia Achieve stable growth by establishing business platform such as distribution networks *1 Excluding the impact of Thai flood for Asia non-life *2 Figures in ( ) show changes from the original projections 37
3-6. International Insurance Business - Business Strategy Going Forward Achieved the current Mid-Term Business Plan of 100B adjusted earnings in FY2013, one year ahead of schedule Continue to pursue growth opportunities globally and build geographically diversified business portfolio as the driver of the TM Group's growth Pursue balanced growth in both developed and emerging markets through organic growth and M&A Growth Strategy 1: Organic growth Further utilize collective strength of the group 1. Expanding group synergies 2. Best practice sharing 3. Collaboration between domestic and international business Developed markets: Strengthen competitive advantage mainly in the commercial market to achieve continuous profit growth Emerging markets: Capture market growth mainly in personal market by expanding distribution and product base Growth Strategy 2: M&A Continue to consider new business investment opportunities in both developed markets and emerging markets while maintaining discipline Further enhance our business platform to support future growth of the International Insurance Business Global Corporate Functions Governance / Internal Controls Internal Audit ERM Investment Global HR Strategy Development of global leadership talent Deployment of local talents for global operations Business Process / IT etc. 38
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Tokio Marine Holdings Key Statistics - 1 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 Ordinary income *1 2,929.0 bn yen 2,775.7 bn yen 2,899.4 bn yen 3,399.9 bn yen 4,218.5 bn yen 3,710.0 bn yen 3,503.1 bn yen 3,570.8 bn yen 3,288.6 bn yen 3,415.9 bn yen 3,857.7 bn yen 4,166.1 bn yen - Net income 56.6 bn yen 111.4 bn yen 67.6 bn yen 89.9 bn yen 93.0 bn yen 108.7 bn yen 23.1 bn yen 128.4 bn yen 71.9 bn yen 6.0 bn yen 129.5 bn yen 184.1 bn yen 270.0 bn yen Adjusted earnings *2 105.0 bn yen 172.1 bn yen 51.8 bn yen 138.7 bn yen 169.7 bn yen 143.2 bn yen -52.5 bn yen 165.4 bn yen 72.0 bn yen -19.5 bn yen 209.1 bn yen 278.1 bn yen 322.0 bn yen Adjusted ROE *2 3.8% 5.9% 1.6% 3.7% 3.8% 3.5% -1.7% 5.8% 2.4% -0.7% 6.7% 7.6% 7.9% Dividends total *3 18.5 bn yen 19.7 bn yen 18.9 bn yen 25.2 bn yen 29.8 bn yen 38.7 bn yen 38.0 bn yen 39.4 bn yen 38.6 bn yen 38.3 bn yen 42.2 bn yen 53.7 bn yen 61.4 bn yen Dividends per share *4 20 yen 22 yen 22 yen 30 yen 36 yen 48 yen 48 yen 50 yen 50 yen 50 yen 55 yen 70 yen 80 yen Share repurchase *5-100.0 bn yen 92.4 bn yen 70.1 bn yen 85.0 bn yen 90.0 bn yen 50.0 bn yen - 50.0 bn yen - - - 50.0 bn yen (Plan) Sales of business related equity holdings 260.0 bn yen 130.0 bn yen 170.0 bn yen 120.0 bn yen 45.0 bn yen 60.0 bn yen 50.0 bn yen 95.0 bn yen 187.0 bn yen 206.0 bn yen 115.0 bn yen 109.0 bn yen approx. 100.0 bn yen Share price *6 1,472 yen 3,240 yen 3,120 yen 4,660 yen 4,360 yen 3,680 yen 2,395 yen 2,633 yen 2,224 yen 2,271 yen 2,650 yen 3,098 yen 3,857.5 yen Market capitalization *6 1,363.0 bn yen 2,896.6 bn yen 2,683.2 bn yen 3,930.8 bn yen 3,594.9 bn yen 2,960.6 bn yen 1,926.8 bn yen 2,118.3 bn yen 1,789.3 bn yen 1,827.1 bn yen 2,039.2 bn yen 2,383.9 bn yen 2,968.4 bn yen *1 Ordinary income projections are undisclosed *2 FY2005: excludes the effects of changes in assumption, etc. in EV calculation of domestic life *3 FY2014: projected figure assumes the number of stocks unchanged from that of March 31, 2014 *4 All figures are shown on a basis after a share-split 1-500 in Sep. 2006 *5 On a repurchase year basis. FY2006 figure excludes 57.8 billion yen of stock exchange between Nisshin Fire *6 FY2014 figures are as of November 19, 2014. Share prices are shown on a basis after a share-split 1-500 in Sep. 2006 41
Tokio Marine Holdings Key Statistics - 2 Adjusted Earnings / Adjusted Earnings (excluding EV) and Return to Shareholders Adjusted earnings (billions of yen, unless otherwise stated below) FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 () 169.7 143.2-52.5 165.4 72.0-19.5 209.1 278.1 322.0 Adjusted earnings (excluding EV) Average adjusted earnings (excluding EV) *1 Total distributions to shareholders 121.5 128.1 4.7 113.4 44.5-35.4 98.8 173.6 233.0 90.0 100.0 80.0 85.0 80.0 80.0 85.0 110.0 145.0 114.8 128.7 88.0 39.4 88.6 38.3 42.2 53.7 111.4 BPS and PBR of Tokio Marine Holdings Adjusted number of issued and outstanding shares (thousands of shares) Share price (yen) Percentage change (Reference) TOPIX Percentage change Shareholders' equity after tax on a financial accounting basis (billions of yen) BPS on a financial accounting basis (yen) PBR on a financial accounting basis Dividends total 29.8 38.7 38.0 39.4 38.6 38.3 42.2 53.7 61.4 Dividends per share 36 yen 48 yen 48 yen 50 yen 50 yen 50 yen 55 yen 70 yen 80 yen Payout ratio to average adjusted earnings (excluding EV) 33% 39% 48% 46% 48% 48% 50% 49% 42% Share repurchases* 2 85.0 90.0 50.0-50.0 - - - 50.0 (Plan) *1: Average adjusted earnings (excluding EV) excludes effects from the Great East Japan Earthquake and Thai Flood *2: On a repurchase year basis. FY2006 figure excludes \57.8B of stock exchange between Nisshin Fire 2007/3E 2008/3E 2009/3E 2010/3E 2011/3E 2012/3E 2013/3E 2014/3E 2014/9E 823,337 802,231 787,562 787,605 766,820 766,928 767,034 767,218 767,374 4,360 3,680 2,395 2,633 2,224 2,271 2,650 3,098 3,402.5-6.4% - 15.6% - 34.9% 9.9% - 15.5% 2.1% 16.7% 16.9% 9.8% 1,713.61 1,212.96 773.66 978.81 869.38 854.35 1,034.71 1,202.89 1,326.29-0.8% - 29.2% - 36.2% 26.5% - 11.2% - 1.7% 21.1% 16.3% 10.3% 3,398.4 2,563.5 1,627.8 2,169.0 1,886.5 1,839.6 2,340.7 2,712.7 3,014.9 4,128 3,195 2,067 2,754 2,460 2,399 3,052 3,536 3,929 1.06 1.15 1.16 0.96 0.90 0.95 0.87 0.88 0.87 Adjusted capital (billions of yen) 4,585.8 3,605.9 2,564.2 3,160.8 2,918.3 2,829.9 3,417.3 3,919.6 4,273.3 BPS on an adjusted basis (yen) 5,570 4,490 3,260 4,010 3,810 3,690 4,460 5,110 5,570 PBR on an adjusted basis 0.78 0.82 0.73 0.66 0.58 0.62 0.59 0.61 0.61 42
Adjusted Earnings (Group Total / 2Q FY2014 Results) Business Domain TMNF Adjusted Earnings FY2013 2Q Results FY2014 2Q Results (billions of yen) Change Domestic Non-Life 33.6 75.7 42.0 TMNF 32.0 69.7 37.7 NF 3.5 8.0 4.5 Other -1.9-2.1-0.1 Domestic Life *1, 2 0.6 53.5 52.8 TMNL -5.0 47.2 52.2 FL 6.0 7.6 1.6 Other -0.2-1.3-1.1 International Insurance 71.0 61.1-9.9 North America 34.9 30.6-4.2 Europe (incl. Middle East) 10.9 8.3-2.5 South & Central America 1.0 3.1 2.0 Asia 15.4 9.7-5.7 Reinsurance 7.2 5.6-1.5 International Non-Life *3 71.0 57.7-13.2 International Life 0.7 3.9 3.2 Financial & General 2.8 2.6-0.2 Group Total 108.2 192.9 84.7 *1: Excluding capital transactions *2: Simplified calculation method is applied for EV as of end of Sept. 2013 and as of end of Sept. 2014. The calculation is an unaudited basis *3: International Non-Life figures include some life insurance figures of composite overseas subsidiaries Group total adjusted earnings increased by 84.7B YoY to 192.9B. Domestic Non-Life TMNF: Increased by 37.7B YoY to 69.7B Increase in net premiums earned mainly in auto Decrease in net incurred losses related to natural catastrophes Decrease in net incurred losses other than the above, in auto and fire, etc. Domestic Life TMNL: Increased by 52.2B YoY to 47.2B Increase in EV associated with the steady increase in policies Reversal effect of the FY2013 decrease in EV due to change in risk discount rate International Insurance Decreased by 9.9B YoY to 61.1B Gains/loses on Net income of Provision for Provision for Gains/losses on sales or Other extraordinary sales or evaluation Adjusted TMNF for catastrophe price fluctuation evaluation of profits/losses and accounting + reserves, etc. net + reserves, net of - of ALM bonds and - stocks and - valuation reserves = earnings of interest rate swaps, purposes of taxes taxes net of taxes properties held, etc., net of taxes TMNF net of taxes 130.2B 16.5B 1.2B 0.9B 25.5B 51.8B 69.7B Increase in natural catastrophe losses Reversal effect of the decrease in net incurred losses related to Thai flood recorded in FY2013 43
Consolidated Results Overview (2Q FY2014 Results) FY2013 2Q (unit: billions of yen, except for %) FY2014 2Q YoY Change % Insurance Premiums (TMHD Consolidated) 1,583.4 1,718.7 + 135.3 + 8.5% Net premiums written (TMHD Consolidated) 1,415.0 1,517.6 + 102.5 + 7.2% Tokio Marine & Nichido 971.2 1,007.9 + 36.7 + 3.8% Nisshin Fire 69.1 68.7-0.4-0.7% Life insurance premiums (TMHD Consolidated) 168.3 201.0 + 32.7 + 19.5% Tokio Marine & Nichido Life (Insurance premiums and other) 294.2 344.7 + 50.5 + 17.2% Ordinary profit (TMHD Consolidated) 148.6 185.2 + 36.5 + 24.6% Tokio Marine & Nichido 107.6 155.0 + 47.3 + 44.0% Nisshin Fire 3.8 12.3 + 8.4 + 220.0% Tokio Marine & Nichido Life 8.3 9.0 + 0.7 + 9.1% Tokio Marine & Nichido Financial Life - 0.3 0.8 + 1.2 - Overseas subsidiaries 70.4 62.3-8.1-11.5% Financial and general 3.0 2.8-0.1-4.8% Others (Elimination, etc.) - 44.2-57.2-13.0 Net income (TMHD Consolidated) 91.4 142.9 + 51.5 + 56.3% Tokio Marine & Nichido 69.7 130.2 + 60.5 + 86.9% Nisshin Fire 2.5 11.4 + 8.9 + 356.2% Tokio Marine & Nichido Life 5.0 5.9 + 0.8 + 17.0% Tokio Marine & Nichido Financial Life - 0.3 0.8 + 1.2 - Overseas subsidiaries 54.5 50.8-3.7-6.8% Financial and general 2.0 1.8-0.1-8.2% Others (Elimination, etc.) - 42.1-58.3-16.1 Insurance Premiums (Net premiums written + Life insurance premiums) Net Premiums Written: Increased mainly due to an increase in domestic non-life mainly in auto, as well as organic growth and the positive impact from the depreciation of the yen at overseas subsidiaries Life Insurance Premiums: Increased mainly due to an increase in in-force policies at TMNL and revenue growth at overseas subsidiaries mainly in Asia life (excl. Japan), despite an increase in the number of surrender at FL associated with the recovery of the market environment Ordinary Profit TMNF: Increased mainly due to the following factors: i. Increase in net premiums earned due to revenue growth ii. Decrease in incurred losses mainly in auto iii. Increase in dividends from overseas subsidiaries Overseas Subsidiaries: Decreased mainly due to an increase in natural catastrophe losses and the reversal effect of temporary increase factors in FY2013 Net Income Increased mainly due to the same factors as in ordinary profit at TMNF, as well as a decrease in valuation allowance associated with a determination of liquidation of a securities subsidiary 44
Consolidated Overview (FY2014 ) FY2013 (unit: billions of yen, except for %) FY2014 Original Revised Difference Insurance premiums (TMHD Consolidated) 3,248.7 3,510.0 3,530.0 + 20.0 Net premiums written (TMHD Consolidated) 2,870.7 2,980.0 3,030.0 + 50.0 Tokio Marine & Nichido 1,966.3 2,014.0 2,014.0 - Nisshin Fire 137.2 137.9 136.5-1.4 Life insurance premiums (TMHD Consolidated) 378.0 530.0 500.0-30.0 Tokio Marine & Nichido Life (Insurance premiums and other) 645.5 707.0 727.9 + 20.9 Ordinary profit (TMHD Consolidated) 274.3 335.0 350.0 + 15.0 Tokio Marine & Nichido 146.5 270.0 285.0 + 15.0 Nisshin Fire 4.7 7.8 13.1 + 5.3 Tokio Marine & Nichido Life 18.2 16.8 9.7-7.1 Tokio Marine & Nichido Financial Life * 10.4 0.1 0.8 + 0.7 Overseas subsidiaries 146.0 120.4 134.4 + 14.0 Financial and general 5.6 5.5 5.9 + 0.4 Others (Elimination, etc.) - 57.2-85.6-98.9-13.3 Net income (TMHD Consolidated) 184.1 230.0 270.0 + 40.0 Tokio Marine & Nichido 90.8 205.0 227.0 + 22.0 Nisshin Fire 3.3 4.8 11.1 + 6.3 Tokio Marine & Nichido Life 10.7 11.2 21.1 + 9.9 Tokio Marine & Nichido Financial Life * 10.4 0.1 0.8 + 0.7 Overseas subsidiaries 117.3 90.8 106.0 + 15.2 Financial and general 3.4 3.4 3.7 + 0.3 Others (Elimination, etc.) - 52.0-85.3-99.7-14.4 * Since Tokio Marine & Nichido Financial Life was merged into Tokio Marine & Nichido Life on October 1st 2014, the projections for the first half of FY2014 projected at the beginning of the year are shown in the FY2014 "Original" column and its actual results are shown in the FY2014 "Revised" column. Insurance Premiums (Net premiums written + Life insurance premiums) Net Premiums Written: Revised upward from the original projections reflecting the organic growth and the impact of the depreciation of the yen at overseas subsidiaries Life Insurance Premiums: Revised downward reflecting an increase in the number of surrender in variable annuities associated with the recovery of the market environment Ordinary Profit Domestic Non-Life: Revised upward mainly due to an increase in dividends from overseas subsidiaries and domestic stocks at TMNF Domestic Life: Revised downward mainly due to an increase in provision for underwriting reserves Overseas Subsidiaries: Revised upward reflecting the recent favorable results and the depreciation of the yen Net Income Revised upward due to the same factors as in ordinary profit, as well as the following factors: i. Decrease in valuation allowance associated with a determination of liquidation of a securities subsidiary at TMNF ii. Projected recording of deferred tax assets at FL etc. 45
Factors of Change in Adjusted Earnings and Adjusted Capital Adjusted Earnings (billions of yen) + 84.7 +52.8 192.9 +42.0-9.9-0.2 108.2 2Q FY13 Results Domestic Non-Life Domestic Life International Insurance Financial and General 2Q FY14 Results Adjusted Capital (billions of yen) + 9% 3,919.6-30.6 +142.9 +242.4-43.3-9.2 +33.6 +17.8 4,273.3 519.7 738.7 1,540.3 Value of in-force policies in life insurance business Reserves of capital nature Accumulated other comprehensive income Items of net assets Adjustment items 1,474.5 Shareholders' equity Adjusted capital Value of Dividends Net income Unrealized Foreign Others Reserves of Adjusted capital as of end-mar. 2014 gains on currency capital nature in-force as of end-sept. 2014 securities, translation (after tax) policies in life insurance 46 net of taxes adjustments business