Tokio Marine Holdings, Inc. · TSE:8766

Tokio Marine — 2Q FY2024 Earnings Presentation

56 slides from Tokio Marine's earnings presentation, Nov 19, 2024

1. Slide 1: Overview of 2Q FY2024 Results and Full-Year Projections

   Overview of 2Q FY2024 Results and Full-Year Projections November 19, 2024

2. Slide 2: Table of Contents

   Table of Contents Highlight FY2024 Projections – Key Messages ・・・・・・ 3 – Group (Adjusted Net Income)・・・・・ 27 – Executive Summary ・・・・・・ 4 – Japan P&C (TMNF) ・・・・・・ 29 – Natural Catastrophes ・・・・・・ 10 – Japan Life (TMNL) ・・・・・・ 34 – International ・・・・・・ 35 2Q FY2024 Results Reference – Group (Adjuste

3. Slide 3: (Blank Page)

   (Blank Page) Copyright (c) 2024 Tokio Marine Holdings, Inc. 2

4. Slide 4: Key Messages

   Key Messages  Strong underwriting by International business, in addition to positive effect of FX rate change on each business unit (Japan P&C approx. +JPY21.0bn, International Underwriting approx. +JPY20.0bn) contributed to strong adjusted net income in 2Q (excl. capital gains from the sales of bu

5. Slide 5: Executive Summary: Top-Line

   Executive Summary: Top-Line TBU  2Q results were in line with the original projections, with net premiums written increasing +5.7% YoY (excl. FX) due to rate increases and life insurance premiums decreasing -32.9% (excl. FX) due to the impact of the reinsurance transaction by Japan Life  Full-year

6. Slide 6: Executive Summary: Adjusted Net Income 2Q Results (Actual Basis)

   Executive Summary: Adjusted Net Income 2Q Results (Actual Basis) [Adjusted net income (incl. business-related equities)] JPY771.2bn (77% vs original projection *5-year average progress: 48%) [Adjusted net income (excl. business-related equities)] JPY359.0bn (59% vs original projection *5-year averag

7. Slide 7: Executive Summary: Adjusted Net Income FY2024 Full-Year Projections (Actual basis)

   Executive Summary: Adjusted Net Income FY2024 Full-Year Projections (Actual basis) [Adjusted Net Income (incl. capital gains from sales of business-related equities)] JPY1.04tn (+JPY40.0bn vs original projections) [Adjusted Net Income (excl. capital gains from sales of business-related equities)] JP

8. Slide 8: Executive Summary: Full-Year 2024 Projections of Adjusted Net Income (Normalized Basis)

   Executive Summary: Full-Year 2024 Projections of Adjusted Net Income (Normalized Basis*1) [Adjusted Net Income (incl. capital gains from the sales of business-related equities)] JPY1.024tn (±JPY0bn vs original projections (after excluding the increased budget for Hyogo hail damage)) [Adjusted Net In

9. Slide 9: Executive Summary: Shareholder Returns

   Executive Summary: Shareholder Returns  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 are committed not to cut dividends, in principle

10. Slide 10: Executive Summary: Solid Capital Stock and Disciplined Capital Policy (Share Repurchase)

    Executive Summary: Solid Capital Stock and Disciplined Capital Policy (Share Repurchase)  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 pipelines including today’s annou

11. Slide 11: Natural Catastrophes

    Natural Catastrophes  Net incurred losses relating to Nat Cats for 2Q fell by JPY0.6bn YoY to JPY114.7bn (before tax)  Full-year projection was revised downwards by JPY24.0bn (before tax). (JPY4.0bn fall in International due to JPY appreciation as of Sep. 30, 2024, although the projection is uncha

12. Slide 12: 2Q FY2024 Results

    2Q FY2024 Results [Reference] FX Rate (USD/JPY) FY2023 FY2024 End of September JPY149.58 JPY142.73 (Japan) (JPY16.05 depreciation vs Mar. 31, 2023) (JPY8.68 appreciation vs Mar. 31, 2024) End of June JPY144.99 JPY161.07 (International) (JPY12.29 depreciation vs Dec. 31, 2022) (JPY19.24 depreciation

13. Slide 13: Group Results: Adjusted Net Income (YoY Change) (Actual Basis)

    Group Japan Life Group Results: Adjusted Net Income (YoY Change) (Actual Basis) Japan P&C International  Increased by +JPY495.6bn YoY, despite a deterioration of the loss ratio in auto (as originally projected) and prior year reserve development regarding overseas loss in Japan P&C,. Increase is ma

14. Slide 14: Japan P&C 1: TMNF Results

    Group Japan Life Japan P&C 1: TMNF Results Japan P&C International  Business Unit Profit excl. one-off impacts (Japan Nat Cats and FX) is generally within the expected range, despite the rise in the loss ratio of auto (to be addressed through Jan. 2025 rate/product revisions)  Business unit profit

15. Slide 15: Japan P&C 2: TMNF Net Premiums Written

    Group Japan Life Japan P&C 2: TMNF Net Premiums Written Japan P&C International  Progress of private insurance total was mostly in line with the original projections (while the YoY increase of +5.8% is above the originally projected +4.7% YoY rise; this reflects the effect of increase in policies b

16. Slide 16: Japan P&C 3: TMNF Net Incurred Losses

    Group Japan Life Japan P&C 3: TMNF Net Incurred Losses Japan P&C International  Impact of domestic Nat Cats below original projections, provision for foreign currency denominated loss reserves decreased due to the JPY appreciation (Sep. 30, 2024) (2Q results: -JPY19.7bn before tax). Increase in los

17. Slide 17: Japan P&C 4: TMNF Combined Ratio

    Group Japan Life Japan P&C 4: TMNF Combined Ratio Japan P&C International  E/I loss ratio was slightly below the original projections  Expense ratio was slightly below the original projections driven by strong top-line performance  Due to the above factors, combined ratio was slightly below the o

18. Slide 18: Japan P&C 5: TMNF Asset Management

    Group Japan Life Japan P&C 5: TMNF Asset Management Japan P&C International  Net investment income and other significantly exceeded the original projections mainly driven by solid progress in sales of business-related equities and the JPY appreciation (end of Sep. 2024) (billions of JPY) FY2023 FY2

19. Slide 19: Japan Life: TMNL Results

    Group Japan Life Japan Life: TMNL Results Japan P&C International  Annualized premium of new business is below original projections due to lower-than-expected sales of protection- oriented products resulting from intensified competition, etc., while the main product of regular premium variable life

20. Slide 20: International 1: Net Premiums Written

    Group Japan Life International 1: Net Premiums Written Japan P&C International  Exceeding the plan driven by steady rate increases, etc., primarily in North America  YoY increase of +5.2% was achieved due to the steady implementation of growth measures by each entity (billions of JPY, except for %

21. Slide 21: International 1: Net Premiums Written

    Group Japan Life International 1: Net Premiums Written Japan P&C International [Progress towards Original Projections] - North America (see pages 23-25 for details on the three main companies)  PHLY: Outperformed the plan due to strong rate increase (2Q results: +11%) and new businesses, etc.  DFG

22. Slide 22: International 2: Business Unit Profits

    Group Japan Life International 2: Business Unit Profits Japan P&C International  Strong underwriting profit, investment income gains, and JPY appreciation offset the impact of capital losses for CRE loans in North America (c. -JPY24.0bn including CECL), resulting in business unit profits exceeding

23. Slide 23: International 2: Business Unit Profits

    Group Japan Life International 2: Business Unit Profits Japan P&C International [Progress towards Original Projections] - North America (see pages 23-25 for details on the three main companies)  PHLY: Slightly below the plan due to the impact of capital losses for CRE loans (CECL, etc. c. -JPY3.0bn

24. Slide 24: International 3: PHLY

    Group Japan Life International 3: PHLY Japan P&C International ■ Changes in Major P/L Items (billions of JPY, except for % and pt) FY2023 FY2024 2Q 2Q YoY Results Results (Ref.) As of end As of end YoY % (Excluding FX rates Jun. 2023 Jun. 2024 *2 Change % FX effects ) （USD/JPY） JPY 144.9 JPY 161.1 N

25. Slide 25: International 4: DFG

    Group Japan Life International 4: DFG Japan P&C International ■ Changes in Major P/L Items (billions of JPY, except for % and pt) FY2023 FY2024 2Q 2Q YoY Results Results (Ref.) As of end As of end YoY % (Excluding FX rates Jun. 2023 Jun. 2024 Change % FX effects ) *2 （USD/JPY） JPY 144.9 JPY 161.1 Ne

26. Slide 26: International 5: TMHCC

    Group Japan Life International 5: TMHCC Japan P&C International ■ Changes in Major P/L Items (billions of JPY, except for % and pt) FY2023 FY2024 2Q 2Q YoY Results Results (Ref.) As of end As of end YoY % (Excluding FX rates Jun. 2023 Jun. 2024 Change % *2 FX effects ) （USD/JPY） JPY 144.9 JPY 161.1

27. Slide 27: FY2024 Projections

    FY2024 Projections [Reference] Assumptions used for FY2024 Projections FX Rate (USD/JPY) Nikkei Stock Average Original Projections (Mar. 31, 2024 rate and stock price) 151.41 yen 40,369 yen Current Projection (Sep. 30, 2024 rate and stock price） 142.73 yen 37,919 yen Copyright (c) 2024 Tokio Marine

28. Slide 28: Group Results: FY2024 Adjusted Net Income (Actual)

    Group Japan Life Group Results: FY2024 Adjusted Net Income (Actual) Japan P&C International  Adjusted net income on an actual basis will be revised upward from the original projection by +JPY40.0bn to JPY1.04tn due to the acceleration of the sales of business-related equities, strong underwriting i

29. Slide 29: Group Results: FY2024 Adjusted Net Income (Normalized)

    Group Japan Life Group Results: FY2024 Adjusted Net Income (Normalized*1) Japan P&C International  Adjusted income on normalized basis*1 remains flat from the original projections at JPY1.024tn, with the strong underwriting in North America and Brazil offset by profit decrease in Asian Life due to

30. Slide 30: Japan P&C 1: TMNF Financial Projections

    Group Japan Life Japan P&C 1: TMNF Financial Projections Japan P&C International  Business unit profit excluding one-off effects (Nat Cats, FX, CECL for CRE loans) is expected to be mostly in line with the original projections at JPY132.0bn (-JPY5.0bn vs original projections)  Business unit profit

31. Slide 31: Japan P&C 2: TMNF Net Premiums Written

    Group Japan Life Japan P&C 2: TMNF Net Premiums Written Japan P&C International  Top-line projection was revised downward by -JPY14.7bn from the original projections to JPY2,309.6bn mainly due to JPY-based profit decrease for originated international business from JPY appreciation (end of Sep. 2024

32. Slide 32: Japan P&C 3: TMNF Net Incurred Losses

    Group Japan Life Japan P&C 3: TMNF Net Incurred Losses Japan P&C International  Projected at JPY1,436.9bn, -JPY28.1bn less than original projections, reflecting the decrease in domestic Nat Cats (-JPY20.0bn) and impact of JPY appreciation (-JPY19.7bn) offset by the development of prior year losses

33. Slide 33: Japan P&C 4: TMNF Combined Ratio

    Group Japan Life Japan P&C 4: TMNF Combined Ratio Japan P&C International  E/I loss ratio is expected to fall by -1.1pt from original projections to 62.2% due to the downward revision of net incurred losses  Expense ratio is expected to fall by -0.1pt from original projections to 31.8%  Due to th

34. Slide 34: Japan P&C 5: TMNF Asset Management

    Group Japan Life Japan P&C 5: TMNF Asset Management Japan P&C International  Net investment income and other were revised upward from the original projections by +JPY261.1bn due to an increase in sales of business-related equities, etc. (billions of JPY) FY2024 Full-Year Projections FY2023 Results

35. Slide 35: Japan Life: TMNL Projections

    Group Japan Life Japan Life: TMNL Projections Japan P&C International  Annualized premium of new business is revised downwards by -JPY4.0bn to JPY50.0bn mainly due to below-projection sales of protection-oriented products resulting from intensified competition, etc.  Business unit profits are revi

36. Slide 36: International 1: Net Premiums Written

    Group Japan Life International 1: Net Premiums Written Japan P&C International  Full-year projection excluding FX effects (local currency basis) is revised upwards, driven by the strong performance and outlook mainly for North America (+4.5% -> +6.0% YoY)  Full-year projection including FX effects

37. Slide 37: International 1: Net Premiums Written

    Group Japan Life International 1: Net Premiums Written Japan P&C International [Major Factors of Changes] - North America  Upward revision of full-year projections excluding FX, expecting strong 1H performance to continue in 2H (downward revision including FX with the applicable rate as of Sep. 30

38. Slide 38: International 2: Business Unit Profits

    Group Japan Life International 2: Business Unit Profits Japan P&C International  Full-year projection is revised downwards by -JPY122.0bn to JPY333.0bn, due to increased capital losses in North American mainly due to CECL provisions for CRE loans (c. -JPY86.0bn), impact of applicable FX rate as of

39. Slide 39: International 2: Business Unit Profits

    Group Japan Life International 2: Business Unit Profits Japan P&C International [Major Factors of Changes] - North America  Downward revision by -JPY82.0bn due to the strong underwriting offset by increased capital losses mainly due to CECL provisions for CRE loans (c. -JPY86.0bn) and the impact of

40. Slide 40: Reference

    Reference Copyright (c) 2024 Tokio Marine Holdings, Inc. 39

41. Slide 41: Investment Performance by North American Entities

    Investment Performance by North American Entities  Income continues to perform well by maintaining yield and expanding AUM  The total return, including capital loss, has been revised downward by -USD600mn for the revised projection, primarily due to an increase in CECL for CRE loans Investment Ret

42. Slide 42: Capital Losses for CRE Loans

    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 -USD0.9bn*2 to be incorporated into the 2024 revised projection  The assumptions are

43. Slide 43: Evaluation of the Capital Losses

    Evaluation of the Capital Losses  The yield is reasonably high within the market, and combined with DFG’s discerning ability, the total return, including income gain, is higher than that of peers (an average of 6.6% (income 7.8% + capital -1.2%) since the investment started in 2016)  Our CRE loans

44. Slide 44: Overview of Integrated Design & Engineering Holdings Co., Ltd.

    Overview of Integrated Design & Engineering Holdings Co., Ltd.  Japanese leading company in the engineering consulting industry with advanced technology and stable business base  In addition to disaster prevention and mitigation, all three business areas of Integrated Design & Engineering Holdings

45. Slide 45: Overview of the Tender Offer (TOB)

    Overview of the Tender Offer (TOB) Tender Offeror  Tokio Marine Holdings, Inc. Target Company  Integrated Design & Engineering Holdings Co., Ltd. (“ID&E”)  From Wednesday, November 20, 2024, to Wednesday, January 15, 2025 Tender Offer Period (35 business days) Type of Shares  Common shares (excl

46. Slide 46: ESR and Sensitivity

    ESR and Sensitivity  ESR as of Sep. 30, 2024 stood at 147% (or 144% after share buyback), reflecting the profit contribution of 1H and accelerated sales of business-related equities, etc. ESR*1 ESR Sensitivity (based on parallel shift) 140% 147%*2 Sep.30, 2024 147% +30% 149% (+2pt) Stock price -30%

47. Slide 47: Review of Indicators for Introduction of IFRS / ICS

    Re-post from Q4 Conference Review of Indicators for Introduction of IFRS / ICS Call on May 20, 2024  IFRS / ICS to be introduced at the end of FY2025  Considering the impact of the introduction and comparability with peers (who revised various KPI indicators upon introduction of IFRS 9 and 17), re

48. Slide 48: Definition of KPIs (1)

    Definition of KPIs (1) Adjusted Net Income (Group total) Business Unit Profits Enhancing transparency and comparability / Creating long-term corporate value Linking with shareholder return  For the Group total, “Adjusted Net Income”  For each business domain, “Business Unit based on financial acco

49. Slide 49: Definition of KPIs (2)

    Definition of KPIs (2) Definition of Adjusted Net Income / Adjusted Net Assets / Adjusted ROE Adjusted Provision for Provision for Provision for price Provision for Nat Cats Provision for Net Net Income underwriting + underwriting result for = + catastrophe loss + contingency + fluctuation + Income*

50. Slide 50: Reconciliation of Adjusted Net Income: 2Q FY2024 Results

    Reconciliation of Adjusted Net Income: 2Q FY2024 Results (billions of JPY) • Reconciliation*1 Note: Factors positive to profit are shown with a plus sign FY2023 2Q FY2024 2Q YoY Change Results Results Net income attributable to owners of the parent 205.0 688.5 483.4 (consolidated) Provision for cata

51. Slide 51: Reconciliation of Adjusted Net Income: FY2024 Projection

    Reconciliation of Adjusted Net Income: FY2024 Projection (billions of JPY) • Reconciliation*1 Note: Factors positive to profit are shown with a plus sign FY2023 FY2024 FY2024 Projections Projections (b)-(a) Results Original(a) Revised(b) Net income attributable to owners of the parent 695.8 870.0 88

52. Slide 52: Adjusted Net Assets / ROE (FY2023 Results and FY2024 Projections)

    Adjusted Net Assets / ROE (FY2023 Results and FY2024 Projections) （billions of JPY）  Adjusted Net Assets*1  Adjusted ROE FY2024 FY2024 FY2024 FY2024 FY2023 FY2023 Projections Projections (b)-(a) Projections Projections (b)-(a) Results Results Original(a) Revised(b) Original(a) Revised(b) Net asset

53. Slide 53: Reconciliation of Business Unit Profits

    Reconciliation of Business Unit Profits  Japan P&C*1 （TMNF）  Japan Life*1 （billions of JPY） FY2023 FY2024 FY2024 FY2023 FY2024 FY2024 2Q 2Q YoY Projections 2Q 2Q YoY Projections Results Results (Revised) Results Results (Revised) Net income for accounting purposes 97.6 596.1 498.5 838.0 Net income

54. Slide 54: Impact of FX Rate Change on the Group's Financial Results

    Impact of FX Rate Change on the Group’s Financial Results  Estimated impact of the JPY depreciation to USD by 1 yen*1 Impact on net income on financial accounting basis*2 Impact on adjusted net income*2 1. Increase in overseas subsidiaries profit: circa 1. Increase in overseas subsidiaries profit:

55. Slide 55: MEMO

    MEMO Copyright (c) 2024 Tokio Marine Holdings, Inc. 54

56. Slide 56: 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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