Tokio Marine Holdings, Inc. · TSE:8766
Tokio Marine — Investor Day (December 2024)
48 slides from Tokio Marine's investor day presentation, Dec 3, 2024
Slide 1: Tokio Marine Annual Investor Day in New York
Tokio Marine Presents Annual Investor Day in New York December 3, 2024 TMHCC CEO DFG CEO PHLY CEO TMNF President CEO/CCO CFO Co-Head of International Susan Rivera Don Sherman John Glomb Hiroaki Shirota Satoru Komiya Kenji Okada Kit Yamamoto Brad Irick (Remote) Copyright (c) 2024 Tokio Marine Holding
Slide 2: Table of Contents
Table of Contents I. Japan P&C Business Strategy .......................................... P. 3 II. International Business Strategy ....................................... P. 11 III. Reference ......................................................................... P. 21 ◆Abbreviations used in thi
Slide 3: Business Unit Organic Growth Capabilities
Ⅰ. Japan P&C Business Strategy After Re-New Re-New Progress Business Unit Organic Growth Capabilities Business units have top-tier organic growth capabilities in each country/region < U/W Profit*2> < Top-line*3> ＜C/R*4＞ Japan P&C ■TMHD ■TMHD TMHD Domestic Domestic 24% ■Domestic P&C total*5 ■Domest
Slide 4: Changes in Environment Surrounding Japan's P&C Insurance Industry
Ⅰ. Japan P&C Business Strategy After Re-New Re-New Progress Changes in Environment Surrounding Japan’s P&C Insurance Industry and Turning Point of Business Model Historically, the competition structure of Japan’s P&C insurance industry can be roughly divided into three phases Phase 1 (Before insur
Slide 5: Japan P&C Organic Growth Capabilities
Ⅰ. Japan P&C Business Strategy After Re-New Re-New Progress Japan P&C Organic Growth Capabilities Japan P&C growth is based on strong U/W (+10% or more CAGR), with additional improvement from Re- New initiatives that will create a lean business operation that achieves sustainable growth upon compl
Slide 6: Quantitative Impacts and Potentials of TMNF's Re-New
Ⅰ. Japan P&C Business Strategy After Re-New Re-New Progress Quantitative Impacts and Potentials of TMNF’s Re-New Implementation of Re-New will be the turning-point for TMNF’s business model and profit growth Post-initiative E/R significantly below 30% and L/R approx. 60％ (stable at low levels) F
Slide 7: Re-New: Increase Customers by Improving Capacity to Provide Insurance and Solutions
Ⅰ. Japan P&C Business Strategy After Re-New Re-New Progress “Re-New”: (1) Increase Customers by Improving Capacity to Provide “Insurance and Solutions” The key success factor in a world without conventional industry practices (business-related equities, cooperation in customer’s business, secondme
Slide 8: Re-New: L/R Improvement
Ⅰ. Japan P&C Business Strategy After Re-New Re-New Progress “Re-New”: (2) L/R Improvement (Implementing Thorough Measures for low profitability contracts) Steady implementation of the foundational measures through on-going product / rate revisions for auto / fire (see P.5). Additionally, we have f
Slide 9: Re-New: E/R Improvement (Distribution Structure Reform)
Ⅰ. Japan P&C Business Strategy After Re-New Re-New Progress “Re-New”: (3) E/R Improvement (Distribution Structure Reform) Eliminate “two-tier structure” and reallocate the employee activity volume to growth areas incl. specialty insurance and solutions Regarding distribution, a big shift to an a
Slide 10: Re-New: Reduction of business-related equities
Ⅰ. Japan P&C Business Strategy After Re-New Re-New Progress “Re-New”: (4) Reduction of business-related equities Steady progress towards “zero*1” business-related equities. Expected sale for FY2024 is JPY750.0bn (increased by +JPY150.0bn from original plan) Expect to reach approx. 20% of IFRS ne
Slide 11: North America Business Organic Growth Capabilities: Overview
Ⅱ. International Business Strategy U.S. Business Overall U.S. U/W Investment M&A North America Business Organic Growth Capabilities: Overview Two segments – (1)Specialty P&C and (2)Employee Benefits driven by our franchises*1 mainly in US U/W profit through highly diversified uncorrelated portfo
Slide 12: NA Business OG Capabilities: Underwriting (1) Specialty P&C
Ⅱ. International Business Strategy U.S. Business Overall U.S. U/W Investment M&A NA Business OG Capabilities: Underwriting (1) Specialty P&C Specialty P&C*1 is comprised of 100+ lines of business and is a key driver of our profit growth Highly diversified and profitable U/W portfolio with intens
Slide 13: NA Business OG Capabilities: Underwriting (2) Employee Benefits
Ⅱ. International Business Strategy U.S. Business Overall U.S. U/W Investment M&A NA Business OG Capabilities: Underwriting (2) Employee Benefits Employee Benefits line is comprised mainly of short-tail Group Life, Disability and MSL Focusing on steady growth both through intensive bottom-line or
Slide 14: PHLY Update
Ⅱ. International Business Strategy U.S. Business Overall U.S. U/W Investment M&A PHLY Update Build competitive edge focusing on niche customer segments What’s PHLY Current Focus Results Focus on niche customer segments Steady profit growth High renewal ratio and rate increases while managing s
Slide 15: TMHCC Update
Ⅱ. International Business Strategy U.S. Business Overall U.S. U/W Investment M&A TMHCC Update Global leader in specialty insurance with 50 years of deep technical expertise What’s TMHCC Current Focus Results Highly profitable and well- Latest bolt-on M&As Stable profitability*6 balanced busine
Slide 16: Track Record of DFG's Credit Investment
Ⅱ. International Business Strategy U.S. Business Overall U.S. U/W Investment M&A Track Record of DFG’s Credit Investment Investment income remains strong on the back of an increase in long-term and predictable insurance liabilities supported by strong business expansion and stable investment incom
Slide 17: Strength of DFG's Investment
Ⅱ. International Business Strategy U.S. Business Overall U.S. U/W Investment M&A Strength of DFG’s Investment Specialized investment team and strong collaboration with outside asset managers enable establishment/execution of investment strategies corresponding to the investment environment, realiz
Slide 18: Capital Losses for CRE Loans
Ⅱ. International Business Strategy U.S. Business Overall U.S. U/W Investment M&A Capital Losses for CRE Loans Considering the continuous stress in CRE Loan portfolio (prevalence of WFH and persistently higher for longer interest rates and inflation), we expect an additional capital loss*1 of -USD0
Slide 19: Evaluation of the Capital Losses
Ⅱ. International Business Strategy U.S. Business Overall U.S. U/W Investment M&A Evaluation of the Capital Losses The yield is reasonably high within the market, and combined with DFG’s prudent ability, the total return, including income gain, is higher than that of peers (an average of 6.6% (inco
Slide 20: Disciplined In / Out Strategy
Ⅱ. International Business Strategy U.S. Business Overall U.S. U/W Investment M&A Disciplined In / Out Strategy Our large-scale North America M&A track record (ROI) is +16.2%. Successful track record makes Tokio Marine an attractive acquirer for the next M&A Valuations remain high and we need to
Slide 21: Key Messages (FY2024 Interim IR Conference)
Ⅲ. Reference Group Japan P&C International Investment Key Messages (FY2024 Interim IR Conference on Nov. 27, 2024) Projected to maintain robust EPS growth at +8% (YoY) for FY2024 The main driver is top-tier organic growth (+6% YoY) across all regions. We are able to Top-tier deliver strong growt
Slide 22: Top-tier EPS Growth
Ⅲ. Reference Group Japan P&C International Investment Top-tier EPS Growth Maintain top-tier EPS growth at +8% driven by the robust organic growth EPS Growth EPS Growth Peer Comparison 2024 Projection*1 MTP Target 2024-2026 CAGR Company Targets YoY EPS Growth Incl. sales of biz- +8％ +8％ or more 8 +
Slide 23: EPS Growth Track Record
Ⅲ. Reference Group Japan P&C International Investment EPS Growth Track Record Top-tier EPS growth was mainly achieved through robust organic growth while managing volatility EPS Growth EPS Growth Peer Comparison 2013-2023 CAGR*1 2013-2023 CAGR*1 EPS Growth + 13% Incl. the sales of biz- related equ
Slide 24: Strong DPS Growth with Confidence
Ⅲ. Reference Group Japan P&C International Investment Strong DPS Growth with Confidence Continue to maintain DPS growth trajectory with confidence in line with strong EPS (profit) growth FY2024 DPS is JPY162 (YoY+32%), increased +JPY3 from the original plan. We will continue to increase DPS* (we
Slide 25: Strong Capital Stock and Disciplined Capital Policy (Share Buyback)
Ⅲ. Reference Group Japan P&C International Investment Strong Capital Stock and Disciplined Capital Policy (Share Buyback) A strong ESR*1 as of Sep. 30, 2024 at 147% Share buyback for FY2024 will be increased to JPY220.0bn (+JPY20.0bn vs original announcement) comprehensively considering the M&A
Slide 26: Path towards ROE Improvement
Ⅲ. Reference Group Japan P&C International Investment Path towards ROE Improvement FY2024 adjusted ROE is projected to hit 19.1%, making steady progress towards the level of global peers Key measures remain “top-tier EPS growth” and “disciplined capital policy” (“Zero*1” business-related equitie
Slide 27: Business Expansion in Disaster Resilience Field
Ⅲ. Reference Group Japan P&C International Investment Business Expansion in Disaster Resilience Field Announced TOB for Integrated Design & Engineering Holdings Co., Ltd. (“ID&E”) , Japan's leading engineering consulting company Through this TOB, we will be able to provide integrated value in th
Slide 28: Globally Integrated Group Management
Ⅲ. Reference Group Japan P&C International Investment Globally Integrated Group Management Continue to promote “integrated group management” that leverages global talent and knowledge to decide and implement important management actions Tap into global wisdom with steady succession of overseas m
Slide 29: Expansion of Group Synergies
Ⅲ. Reference Group Japan P&C International Investment Expansion of Group Synergies Group synergies are our unique strength and expanding to USD640mn Group Synergies Track record of increasing synergies (USD mn) 999 Revenue Investment Leverage Leverage DFG’s 559 640 our global network asset managem
Slide 30: Enhancement of Group Governance
Ⅲ. Reference Group Japan P&C International Investment Enhancement of Group Governance Steady progress in initiatives to enhance Group-level governance Established in April 2024, “Group Audit Committee” utilizes external perspectives to examine TMHD business processes and culture, promoting integ
Slide 31: [FY2024 Update] Japan P&C
Ⅲ. Reference グループ Group Japan P&C Japan Japan Life P&C International 資産運用 International 領域拡⼤ Investment [FY2024 Update] Japan P&C Driver of the business unit profit (CAGR: +5% or more) in the current MTP is the underwriting profit growth (CAGR: +10% or more). Aiming to accelerate by adding “Re-New
Slide 32: [FY2024 Update] Auto Insurance
Ⅲ. Reference グループ Group Japan P&C Japan Japan Life P&C International 資産運用 International 領域拡⼤ Investment [FY2024 Update] Auto Insurance Current MTP aims to overcome the difficult environment (resulting from inflation, a post-COVID driving surge, and escalating Nat Cats) by proactively revising rate
Slide 33: [FY2024 Update] Fire Insurance
Ⅲ. Reference グループ Group Japan P&C Japan Japan Life P&C International 資産運用 International 領域拡⼤ Investment [FY2024 Update] Fire Insurance Current MTP aims to achieve profitability commensurate to capital cost (RoR>7%) by FY2026 through the constant rate/product revisions, Oct. 2024 rate / product rev
Slide 34: [FY2024 Update] Specialty Insurance
Ⅲ. Reference グループ Group Japan P&C Japan Japan Life P&C International 資産運用 International 領域拡⼤ Investment [FY2024 Update] Specialty Insurance Current MTP aims to capture promising markets focusing on five priority areas to achieve approx. JPY7.0bn profit increase (approx. +100.0bn premium increase)
Slide 35: [FY2024 Update] E/R Improvement
Ⅲ. Reference グループ Group Japan P&C Japan Japan Life P&C International 資産運用 International 領域拡⼤ Investment [FY2024 Update] E/R Improvement Current MTP aims for E/R at the 31% mark (below 30% in the mid- to long-term) through top-line growth and reviewing the agent commissions system, etc. Making so
Slide 36: Measures Concerning TMNF's Governance Issues
Ⅲ. Reference グループ Group Japan P&C Japan Japan Life P&C International 資産運用 International 領域拡⼤ Investment Measures Concerning TMNF’s Governance Issues Steady progress in business improvement plan Implementing measures to detect issues based on “sense of misalignment,” and walk-through utilizing 3r
Slide 37: International Business Organic Growth Capabilities
Ⅲ. Reference Group Japan P&C International Investment International Business Organic Growth Capabilities International Business derives its profitability primarily from five regions around the world: North America*1, UK/Europe, Latin America, Asia/Australia and Africa/Middle East North America i
Slide 38: Track Record of Rate Increases
Ⅲ. Reference Group Japan P&C International Investment Track Record of Rate Increases Leveraged the competitive advantage built through strategic focus on niche markets and specialty insurance and carried out rate increases based on forward-looking loss-cost projections Market hardening is expect
Slide 39: DFG Update
Ⅲ. Reference Group Japan P&C International Investment DFG Update Maintain U/W profit and expand investment income leveraging its strengths What’s DFG Current Focus Results Strength in employee benefits and Initiatives to improve profitability Combined ratio retirement products / services SNC
Slide 40: Emerging Market Business
Ⅲ. Reference Group Japan P&C International Investment Emerging Market Business Building “pillars” with focus on regions with large market and strong expected growth <Our major P&C business network in emerging countries> India Thailand Brazil IFFCO-TOKIO General Tokio Marine Safety Insurance
Slide 41: Track Record of large-scale M&A in the U.S.
Ⅲ. Reference Group Japan P&C International Investment Track Record of large-scale M&A in the U.S. Four subsidiaries acquired with large-scale M&A have continually outperformed market growth ROI is significantly above TMHD capital cost (7%) at 16.2% Growth after joining the Group*1 ROI of large M
Slide 42: Track Record of Bolt-on M&A
Ⅲ. Reference Group Japan P&C International Investment Track Record of Bolt-on M&A Room for bolt-on M&A based on in-depth understanding of mutual business Leverage the experience and expertise of TMHCC as our strength and steadily execute transactions Advantages High success rate : In-depth under
Slide 43: Rate Cycle and M&A Opportunities
Ⅲ. Reference Group Japan P&C International Investment Rate Cycle and M&A Opportunities The market is cyclical, and in principle, valuations for high-quality large-scale M&A transactions become high as the market hardens, while it creates a tail-wind for organic growth. On the other hand, attractiv
Slide 44: Group Asset Management Policy
Ⅲ. Reference Group Japan P&C International Investment Group Asset Management Policy Maintain long-term, stable income based on ALM aligned with characteristics of insurance liabilities Investment Portfolio (Sep. 30, 2024) Securing a stable yield Investment <Group income yield> Assets other than As
Slide 45: Overview of CRE loans by LTV
Ⅲ. Reference Group Japan P&C International Investment Overview of CRE loans by LTV Considering the current environment, we have re-assessed property value Based on the revaluation, we have incorporated the provisions*1 conservatively. As a result, the capital loss ratio is projected to be 10.4%
Slide 46: MEMO
MEMO Copyright (c) 2024 Tokio Marine Holdings, Inc. 46
Slide 47: Copyright (c) 2024 Tokio Marine Holdings, Inc.
Copyright (c) 2024 Tokio Marine Holdings, Inc.
Slide 48: 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