Tokio Marine Holdings, Inc. · TSE:8766
Tokio Marine — Q2 FY2017 Earnings Presentation
60 slides from Tokio Marine's earnings presentation, Nov 24, 2017
Slide 1: Tokio Marine Group Mid-Term Business Plan Update
Tokio Marine Group Mid-Term Business Plan “To Be a Good Company 2017” 2017 Business Plan Update November 24, 2017 Tokio Marine Holdings, Inc.
Slide 2: Table of Contents
Table of Contents Ⅰ Current Mid-Term Business Plan 1. Progress 2. Enterprise Risk Management （ERM）& Shareholder Return Policy 3. Group Asset Management 4. Business Plan and Strategy by Domain (1) Domestic non-life business (2) Domestic life business (3) International insurance business Ⅱ Direction o
Slide 3: Current Mid-Term Business Plan
Ⅰ Current Mid-Term Business Plan Copyright (c) 2017 Tokio Marine Holdings, Inc. 2
Slide 4: 2Q FY2017 Results
Ⅰ Current Mid-Term Business Plan 1-1. 2Q FY2017 Results Adjusted Net Income （Group Total） (billions of yen) - 75.7 Natural catastrophe net incurred losses (Business unit profits basis, billions of yen) 219.2 Adjusted Net 143.5 2016.1H 2017.1H Income Domestic non-life 39.4 25.1 Before tax Internati
Slide 5: FY2017 Full-Year Projections
Ⅰ Current Mid-Term Business Plan 1-2. FY2017 Full-Year Projections Adjusted net income and Adjusted ROE revised downward mainly due to an increase in natural catastrophe losses and the impact of large losses in domestic non-life, etc. Adjusted Net Income (billions of yen) Main downward revision
Slide 6: Progress of the Mid-Term Business Plan
Ⅰ Current Mid-Term Business Plan 1-3. Progress of the Mid-Term Business Plan • For FY2017, the final year of the mid-term business plan, main KPIs are projected to be lower than the original outlook due to the impact of large natural catastrophes, etc. • Normalized basis performance excluding extern
Slide 7: Promoting Strong ERM (1) (Controlling Risk and Capital)
Ⅰ Current Mid-Term Business Plan 2-1. Promoting Strong ERM (1) (Controlling Risk and Capital) Control risk and capital Maintain financial soundness Enhance profitability Balance capital and risk to maintain AA credit ratings Sustainable profit growth and enhance capital efficiency • • Advance natu
Slide 8: Promoting Strong ERM (2) (ESR as of Sep.30, 2017)
Ⅰ Current Mid-Term Business Plan 2-2. Promoting Strong ERM (2) (ESR as of Sep.30, 2017) Although net asset value decreased due to shareholder return, etc., risk capital also decreased. As a result, ESR as of Sep. 30, 2017 is 141% Business continuity is confirmed even in the event of stress scena
Slide 9: Shareholder Return Policy
Ⅰ Current Mid-Term Business Plan 2-3. Shareholder Return Policy Our primary means of shareholder return is dividends, which we plan to increase in line with profit growth Increase of We aim to pursue steady growth of dividends, and payout ratio as a guide is above 35% of dividends average adjust
Slide 10: Group Asset Management (1)
Ⅰ Current Mid-Term Business Plan 3-1. Group Asset Management (1) With asset and liability management (ALM) at the core, aim to enhance profit and ensure liquidity based on a portfolio reflecting the characteristics of insurance liabilities Group Asset Further strengthen investment capability by
Slide 11: Group Asset Management (2)
Ⅰ Current Mid-Term Business Plan 3-2. Group Asset Management (2) Continue to reduce business-related equities from the perspective of enhancing capital efficiency • Book value of business-related equities has decreased to less than half compared with the end of Mar. 2002 through steady measures • Si
Slide 12: TMNF FY2017 Projections
Ⅰ Current Mid-Term Business Plan 4(1)-1. TMNF FY2017 Projections Net premiums written is revised upward due to steady implementation of growth measures, etc. Business unit profits is projected to exceed the mid-term business plan despite downward revision due to an increase in natural catastroph
Slide 13: TMNF Combined Ratio
Ⅰ Current Mid-Term Business Plan 4(1)-2. TMNF Combined Ratio Stable combined ratio despite an increase in loss ratio due to the impact of natural catastrophes, etc. Combined Ratio (Private insurance: E/I basis) *1 *1: Financial accounting basis, loss ratio (private insurance E/I basis) + expense r
Slide 14: TMNF Measures to Achieve Sustainable Growth
Ⅰ Current Mid-Term Business Plan 4(1)-3. TMNF Measures to Achieve Sustainable Growth Becoming "the best choice" for customers by enhancing product attractiveness and promoting channel strategies Unlocking the integrated business model for life and non-life Super Insurance • Enhance customer satisf
Slide 15: TMNF Measures to Achieve Sustainable Growth
Ⅰ Current Mid-Term Business Plan 4(1)-4. TMNF Measures to Achieve Sustainable Growth Aim to change product portfolio by expanding specialty insurance in various fields and aim to accelerate growth Promote new business model Pursue group synergies • Through measures for regional revitalization an
Slide 16: TMNL FY2017 Projections
Ⅰ Current Mid-Term Business Plan 4(2)-1. TMNL FY2017 Projections Aiming for growth along with financial soundness and profitability by promoting sales shift from saving-type products to protection-type products New Policies Annualized Premiums (ANP) (billions of yen) Total of new policies ANP Excl
Slide 17: TMNL Growth Strategy
Ⅰ Current Mid-Term Business Plan 4(2)-2. TMNL Growth Strategy Enhancing our highly unique product lineup to meet diverse needs 2017 Life Insurance Revolution Achieving high growth Life Insurance Revolution to Protect One’s Living to Protect One’s Living Nextage Growth rate of the number of in-force
Slide 18: International Insurance FY2017 Projections
Ⅰ Current Mid-Term Business Plan 4(3)-1. International Insurance FY2017 Projections Net premiums written is revised upwards from the original projections due to progress of growth measures even under the soft market environment Although business unit profits is revised downwards mainly due to th
Slide 19: Impact of hurricanes in North America, etc.
Ⅰ Current Mid-Term Business Plan 4(3)-2. International Insurance Impact of hurricanes in North America, etc. The industry is expected to face one of the largest market losses in history due to frequent natural catastrophes worldwide including hurricanes in North America Although natural catastro
Slide 20: International Insurance North America ①
Ⅰ Current Mid-Term Business Plan 4(3)-3. International Insurance North America ① Actual basis ■ Normalized basis ■ （Incl. Comments） Net Premiums Written Business Unit Profits Market Comparison North Aim for sustainable profit growth while pursuing synergy between group companies America +9 US Commer
Slide 21: International Insurance North America ②
Ⅰ Current Mid-Term Business Plan 4(3)-3. International Insurance North America ② Actual basis ■ Normalized basis ■ （Incl. Comments） Net Premiums Written Business Unit Profits Combined Ratio Maintain profit growth through profound investment expertise as well as strength in employee benefit products
Slide 22: International Insurance Europe / Reinsurance
Ⅰ Current Mid-Term Business Plan 4(3)-4. International Insurance Europe / Reinsurance Actual basis ■ Normalized basis ■ （Incl. Comments） Net Premiums Written Business Unit Profits Combined Ratio Europe Promote common growth strategies under the business platform of Lloyd’s market and Corporate marke
Slide 23: International Insurance Emerging Countries
Ⅰ Current Mid-Term Business Plan 4(3)-5. International Insurance Emerging Countries Actual basis ■ Normalized basis ■ （Incl. Comments） Net Premiums Written Business Unit Profits South & Continue profit growth by providing products and services which meet the needs of customers Central through high q
Slide 24: International Insurance FY2017 Projection by regions
Ⅰ Current Mid-Term Business Plan 4(3)-6. International Insurance FY2017 Projection by regions FY2017 Projections FY2017 Projections Original ➡ Revised from FY2016 FY2016(a) Net Premiums Written FY2016(a) YoY YoY Applied FX rate Original (b) Revised (c) YoY (billions of yen) Difference Change % Origi
Slide 25: Direction of the Next Mid-Term Business Plan
Direction of the Ⅱ Next Mid-Term Business Plan Copyright (c) 2017 Tokio Marine Holdings, Inc. 24
Slide 26: Long-Term Vision and Value Providing Cycle
Ⅱ Direction of the Next Mid-Term Business Plan 1-1. Long-Term Vision and Value Providing Cycle Long-Term A global insurance group that delivers sustainable growth Vision by providing safety and security to customers worldwide - Our timeless endeavor to be a Good Company - Value providing cycle leadi
Slide 27: Future Group Vision
Ⅱ Direction of the Next Mid-Term Business Plan 1-2. Future Group Vision Aim for further growth by capitalizing on expected changes in the business environment Expected business environment Strengths of the Group Aligned Group management (maximize the Group’s Change of social structure (change in
Slide 28: Stage of the Next Mid-Term Business Plan
Ⅱ Direction of the Next Mid-Term Business Plan 1-3. Stage of the Next Mid-Term Business Plan Next Mid-Term Business Plan is an important stage to realize our future Group vision Although headwinds in business environment such as continuation of soft market and low interest rate, rate reduction i
Slide 29: Priority Issues of the Next Mid-Term Business Plan
Ⅱ Direction of the Next Mid-Term Business Plan 1-4. Priority Issues of the Next Mid-Term Business Plan Geography / Business • Achieve growth through organic growth as well as M&A (targeting emerging diversification countries such as Asia, etc. and developed countries) Further Appropriate • Appropria
Slide 30: Group Management Framework
Ⅱ Direction of the Next Mid-Term Business Plan 1-5. Group Management Framework Enhancing Enterprise Risk Management (ERM) to realize sustainable profit growth by strategically allocating capital while maintaining financial soundness Generate Profit Sustainable Profit Growth Efficient Deployment of C
Slide 31: TMNF Direction of the Next Mid-Term Business Plan
Ⅱ Direction of the Next Mid-Term Business Plan 2(1). TMNF Direction of the Next Mid-Term Business Plan Achieve “sustainable growth” and “generate stable profits“ by implementing three measures to reform business structure and establishing a thorough lean management system Measures to reform business
Slide 32: TMNL Direction of the Next Mid-Term Business Plan
Ⅱ Direction of the Next Mid-Term Business Plan 2(2). TMNL Direction of the Next Mid-Term Business Plan Achieve sustainable growth by pursuing quality to become “the best choice” for customers Realize sustainable profit growth • Advance living protection products to meet new needs Develop innovative
Slide 33: International Insurance Direction of the Next Mid-Term Business Plan
Ⅱ Direction of the Next Mid-Term Business Plan 2(3). International Insurance Direction of the Next Mid-Term Business Plan •Be the driver of diversification and sustainable profit growth of the Group •Pursue balanced, sustainable growth in both developed and emerging markets organically and through s
Slide 34: (Blank Page)
(Blank Page) Copyright (c) 2017 Tokio Marine Holdings, Inc. 33
Slide 35: Reference
Reference • Tokio Marine Holdings Key Statistics • Return to Shareholders • 2Q FY2017 Results Overview • FY2017 Projections Overview • Adjusted Net Income and Business Unit Profits • Definition of Adjusted Net Income, Adjusted Net Assets, Adjusted ROE, and Business Unit Profits • Reconciliation of A
Slide 36: Tokio Marine Holdings Key Statistics
Tokio Marine Holdings Key Statistics FY2017 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Projections Net income (billions of yen) *1 108.7 23.1 128.4 71.9 6.0 129.5 184.1 247.4 254.5 273.8 230.0 Shareholders' equity after tax 2,563.5 1,627.8 2,169.0 1,886.5 1,839.6 2,340.7 2
Slide 37: Return to Shareholders
Return to Shareholders FY2017 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Projections Dividends per share 48yen 48yen 50yen 50yen 50yen 55yen 70yen 95yen 110yen 140yen 160yen Dividends total 38.7bn yen 38.0bn yen 39.4bn yen 38.6bn yen 38.3bn yen 42.2bn yen 53.7bn yen 72.2bn
Slide 38: 2Q FY2017 Results Overview (Consolidated)
2Q FY2017 Results Overview (Consolidated) Net Premiums Written • Increased due to business expansion at domestic non-life and (billions of yen, except for %) overseas subsidiaries and the depreciation of the yen at overseas FY2016 FY2017 YoY Life Insurance Premiums 2Q 2Q Results Results Change %
Slide 39: 2Q FY2017 Results Overview (Business Unit Profits)
2Q FY2017 Results Overview (Business Unit Profits) (billions of yen) FY2016 FY2017 Business Domain 2Q 2Q YoY Results Results Change – Domestic Non-Life Decreased by ¥29.6B YoY to ¥69.1B mainly due to the Domestic Non-Life 98.8 69.1 -29.6 below at TMNF: TMNF 96.1 64.3 -31.7 Reversal effect of decre
Slide 40: FY2017 Projections Overview (Consolidated)
FY2017 Projections Overview (Consolidated) Net Premiums Written (billions of yen, except for %) • Upward revision due to business expansion and depreciation of FY2017 FY2017 the yen at overseas subsidiaries FY2016 Projections Projections Difference Change Results (b) - (a) Original (a) Revised (b)
Slide 41: FY2017 Projections Overview (Business Unit Profits)
FY2017 Projections Overview (Business Unit Profits) (billions of yen) FY2017 FY2016 Projections Business Domain Results Original (a) Revised (b) (b)-(a) – Domestic Non-Life Downward revision by ¥13B from the original projections to Domestic Non-Life 167.6 160.0 147.0 -13.0 ¥147B mainly due to the be
Slide 42: Adjusted Net Income and Business Unit Profit
Adjusted Net Income and Business Unit Profit Adjusted Net Income (Group total) Business Unit Profits Enhancing transparency and comparability / Creating long-term corporate value Linking with shareholder returns For the Group total, “Adjusted Net Income” based on For each business domain, “Busin
Slide 43: Definition of Adjusted Net Income, Adjusted Net Assets, Adjusted ROE, Business Unit Profits
Definition of Adjusted Net Income / Adjusted Net Assets / Adjusted ROE / Business Unit Profits Definition of Adjusted Net Income / Adjusted Net Assets / Adjusted ROE Adjusted Net Income*1 Provision for Provision for Provision for Gains or losses on sales or Adjusted Net income = + catastrophe loss
Slide 44: Reconciliation of Adjusted Net Income / Adjusted Net Assets
Reconciliation of Adjusted Net Income / Adjusted Net Assets (billions of yen) Adjusted Net Income*1 Adjusted Net Assets*1 Adjusted ROE FY2017 FY2017 FY2017 FY2017 FY2016 FY2017 FY2017 FY2016 Projections Projections (b)-(a) FY2016 Projections Projections Results Projections Projections (b)-(a)
Slide 45: Reconciliation of Business Unit Profits
Reconciliation of Business Unit Profits Domestic Non-Life*1 （TMNF） (billions of yen) FY2016 FY2017 FY2017 FY2017 FY2016 2Q 2Q YoY Projections Projections (b)-(a) Results Results Results Original(a) Revised(b) Net income for accounting purposes 124.0 112.4 -11.6 Net income for accounting purposes 2
Slide 46: Long-term Vision and the Mid-Term Business Plan
Long-term Vision and the Mid-Term Business Plan "To Be a Good Company 2017" A global insurance group that delivers sustainable growth Long-term vision by providing safety and security to customers worldwide - Our timeless endeavor to be a Good Company - Aiming for globally competitive-level earnings
Slide 47: Initiatives for "Sustainable Profit Growth"
Initiatives for “Sustainable Profit Growth” Domestic insurance: Enhancing the integrated business model for life and non-life, strengthening claims-service capabilities, and Unlocking our further utilizing our risk consulting service Enhancement potential International insurance: Enhancing organ
Slide 48: Framework of the Mid-Term Business Plan and Group Management
Framework of the Mid-Term Business Plan and Group Management Enhancing Enterprise Risk Management (ERM) to realize sustainable profit growth and higher capital efficiency even in a changing environment, while maintaining financial soundness Generate capital and cash Achieve sustainable profit growth
Slide 49: Further Integration and Alignment of Group Management
Further Integration and Alignment of Group Management In April 2016, established Group Chief Officer positions and committees as well as strengthened its functions to globalize and strengthen Group management system Involvement of top management at overseas subsidiaries in solving Group manageme
Slide 50: Expansion of Group Synergies
Expansion of Group Synergies Pursuing synergies by leveraging the Group's global footprint, high expertise of each group company, and financial strengths, etc. • Providing specialty insurance products through each company’s sales network for cross selling in developed countries Aim to expand revenue
Slide 51: Initiatives to Support Corporate Value Enhancement
Initiatives to Support Corporate Value Enhancement Initiatives and external acknowledgments etc. Mangrove tree planting CO2 emissions and fixation/reduction effects Initiatives to achieve “carbon neutral” through CO2 emissions CO2 fixation/reduction effects mangrove tree planting “Carbon neutral” fo
Slide 52: Basic Information (Domestic Non-Life 1) - TMNF
Basic Information (Domestic Non-Life 1) - TMNF Trend of net premiums written and combined ratio Premium composition by line (FY2016 net premiums written basis) C/R（Private Insurance W/P Basis) Marine Net Premiums Written 2.8% Fire (All lines, billions of yen) 12.9% 103.3% CALI 99.4% Auto 97.9% 1
Slide 53: Basic Information (Domestic Non-Life 2) - TMNF
Basic Information (Domestic Non-Life 2) - TMNF Trend of underwriting results in auto insurance (W/P basis combined ratio) <Factors of profitability deterioration> <Measures to improve profitability> Increase in senior drivers with high accident Efforts to decrease business expenses frequency s
Slide 54: Basic Information (Domestic Life) - TMNL
Basic Information (Domestic Life) - TMNL Growing "Medical & Cancer" market Growth rate of number of in-force policies at TMNL 【Composition of number of in-force policies】 【CAGR of in-force policies from FY2000 to FY2016】 （Individual insurance basis, total of Japanese life insurance market） (Tota
Slide 55: Basic Information (Domestic Life) - TMNL Major Products
Basic Information (Domestic Life) - TMNL Major Products (Products lineup as of November 2017) Receive benefits as if receiving (whole life insurance/ term insurance/ Whole life insurance for Variable annuities for future monthly salary in times of needs longevity in case of death and asset accumulat
Slide 56: Basic Information (International Insurance 1) - Strategic Expansion
Basic Information (International Insurance 1) - Strategic Expansion Pursue growth opportunities globally Pursue to establish a as the profit growth driver of the Group diversified business portfolio 2000 2007 2011 2015 Further Growth, Diversification and Capital Efficiency Further Expansion in High
Slide 57: Basic Information (International Insurance 2) - Net Premiums Written
Basic Information (International Insurance 2) - Net Premiums Written Net premiums written in international insurance business (billions of yen) 1,800 1,711.0 1,654.4 Life 1,600 Reinsurance 1,400 1,302.6 1,304.0 1,200 1,074.5 1,000 North America 800 734.3 600 544.0 526.5 499.7 413.9 400 362.6 Europ
Slide 58: Impact of FX rate change on the Group's Financial Results
Impact of FX rate change on the Group’s Financial Results Main impact in the event of 1 yen appreciation*1 (compared with the original projections) Impact on net income on financial accounting basis*2 Impact on adjusted net income*2 Decrease in profit from overseas approx. - ¥ 0.4B Decrease in
Slide 59: Asset Portfolio
Asset Portfolio Domestic Non-Life (TMNF) Domestic Life (TMNL) With regard to assets in deposit-type insurance accounts, we aim a Excluding assets in separate accounts, most assets are stable increase in the value of surplus by appropriately controlling the assets for backing long-term insura
Slide 60: Disclaimer
Disclaimer These presentation materials include business projections and forecasts relating to expected financial and operating results of Tokio Marine Holdings and certain of its affiliates in current and future periods. All such forward looking information is based on information and assumptions a
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