Tokio Marine Holdings, Inc. · TSE:8766

Tokio Marine — Investor Presentation (November 2018)

60 slides from Tokio Marine's investor presentation, Nov 26, 2018

  1. Slide 1: Mid-Term Business Plan 'To Be a Good Company 2020' FY2018 Update

    Tokio Marine Group Mid-Term Business Plan “To Be a Good Company 2020” FY2018 Business Plan Update November 26, 2018

  2. Slide 2: Table of Contents

    Table of Contents Ⅰ Tokio Marine Group Business Strategy 1. FY2018 Financial Results 2. Economic Solvency Ratio (ESR) & Shareholder Return Policy 3. Progress of the Mid-Term Business Plan Ⅱ Business Plan and Strategy by Domain 1. Domestic Non-Life Business 2. Domestic Life Business 3. International

  3. Slide 3: Tokio Marine Group Business Strategy

    Ⅰ Tokio Marine Group Business Strategy Copyright (c) 2018 Tokio Marine Holdings, Inc. 2

  4. Slide 4: 1-1. 2Q FY2018 Results

    Ⅰ Tokio Marine Group Business Strategy 1-1. 2Q FY2018 Results Adjusted Net Income （Group Total） ） (billions of yen) -53.6 143.5 Adjusted Net 89.9 Income Fell by ¥53.6B YoY mainly due to the impact of natural catastrophes in domestic non-life after 2017 2018 1H 1H an increase at overseas subsidiaries

  5. Slide 5: 1-2. FY2018 Full-Year Projections

    Ⅰ Tokio Marine Group Business Strategy 1-2. FY2018 Full-Year Projections • Adjusted net income and adjusted ROE are revised downward mainly due to an increase in natural catastrophe losses in Japan • However, performance when normalizing nat-cats and FX rates is growing steadily, exceeding the plan

  6. Slide 6: 1-3. Net Incurred Losses relating to Natural Catastrophes

    Ⅰ Tokio Marine Group Business Strategy 1-3. Net Incurred Losses relating to Natural Catastrophes • Natural catastrophe losses are projected to exceed the original projection due to the record largest wind and flood damages in Japan Wind and flood, etc. payouts in Japan Impact of nat-cat losses on fi

  7. Slide 7: 1-4. Impact of Natural Catastrophe Losses on Profits

    Ⅰ Tokio Marine Group Business Strategy 1-4. Impact of Natural Catastrophe Losses on Profits • The impact on profits is within our expectations and tolerance as a result of enhancing geographical/business diversification and advancing risk management, although damaged by the record largest domestic w

  8. Slide 8: 2-1. Economic Solvency Ratio (ESR)

    Ⅰ Tokio Marine Group Business Strategy 2-1. Economic Solvency Ratio (ESR) • ESR as of Sep. 30, 2018 slightly declined to 197% (within target range) due to business investment and shareholder return, offsetting the positive impact associated with the profit contribution and rise in stock price ESR ES

  9. Slide 9: 2-2. Shareholder Return Policy

    Ⅰ Tokio Marine Group Business Strategy 2-2. Shareholder Return Policy Our primary means of shareholder return is dividends and – Interim dividend is ¥90 per share as we plan to sustainably increase total dividends along with projected in the original plan Stable profit growth – Annual dividend is ¥1

  10. Slide 10: 2-3. Enhancing Shareholder Value

    Ⅰ Tokio Marine Group Business Strategy 2-3. Enhancing Shareholder Value Total Shareholder Return has outperformed TOPIX As of Oct. 31, 2018 400 Transition of total shareholder return* *Total Shareholder Return(TSR): Capital return after reinvesting dividends Stock price indexed at 100 on April 1, 20

  11. Slide 11: 3-1. The Future Group Vision and the Mid-Term Business Plan

    Ⅰ Tokio Marine Group Business Strategy 3-1. The Future Group Vision and the Mid-Term Business Plan The future Group visions Mid-Term Business Plan (2018～ ～2020） ） 「To Be a Good Company 2020」 」 Consistent double-digit ROE High level shareholder return Progress up to 2017 Profit growth through strengt

  12. Slide 12: 3-2. The Priorities (1) Continued Diversification of Portfolio

    Ⅰ Tokio Marine Group Business Strategy 3-2. The Priorities (1) Continued Diversification of Portfolio • Achieve stable profit through the optimal diversification across geography, business, product, and investment while realizing growth in key growth markets Mid-term plan priories & targets Progress

  13. Slide 13: 3-3. The Priorities (2) Business Structure Enhancement Utilizing Technology

    Ⅰ Tokio Marine Group Business Strategy 3-3. The Priorities (2) Business Structure Enhancement Utilizing Technology • We will realize a lean management structure that can withstand any tough business environment as well as create “new values” such as innovative products/services, etc. by actively uti

  14. Slide 14: 3-4. The Priorities (3) Strengthen Aligned Group Management

    Ⅰ Tokio Marine Group Business Strategy 3-4. The Priorities (3) Strengthen Aligned Group Management • While strengthening aligned Group management and maximizing Group synergies, create a strong global management platform that is able to strengthen and support our competitive businesses around the wo

  15. Slide 15: 3-5. Group Asset Management

    Ⅰ Tokio Marine Group Business Strategy 3-5. Group Asset Management • Secure long term and stable investment income under the policy based on the characteristics of insurance liabilities with ALM at the core as well as strengthen investment structure across the Group Steady accumulation of overseas a

  16. Slide 16: Business Plan and Strategy by Domain

    Ⅱ Business Plan and Strategy by Domain Copyright (c) 2018 Tokio Marine Holdings, Inc. 15

  17. Slide 17: 1-1. TMNF Projections

    Ⅱ Business Plan and Strategy by Domain 1-1. TMNF Projections • Hold projections of net premiums written • Business Unit Profits is revised downward mainly due to the impact of natural catastrophes Net premiums written Business unit profits Combined ratio 2020 Plan CAGR+1% or more 2020 Plan CAGR+1% o

  18. Slide 18: 1-2. TMNF Growth Strategy

    Ⅱ Business Plan and Strategy by Domain 1-2. TMNF Growth Strategy • Continue to beat the market growth and stay competitive in business efficiency by promoting initiatives toward further growth and productivity enhancement Initiatives toward further growth Growth outperforming the market ＜Direct net

  19. Slide 19: 1-3. TMNF Provide New Value Through Utilizing Technology

    Ⅱ Business Plan and Strategy by Domain 1-3. TMNF Provide New Value Through Utilizing Technology • Continue to provide new values to our customers through collaboration with our diverse partners with cutting-edge technology • Jointly exploring full digitization of insurance process and AI based insur

  20. Slide 20: 2-1. TMNL Projections

    Ⅱ Business Plan and Strategy by Domain 2-1. TMNL Projections • Business unit profits is revised upward due to further shift to protection-type products New policies ANP Business unit profits CAGR +1% or more 2020 Plan MCEV growth rate 2020 Plan CAGR +4% or more • Revised FY2018 projections downward,

  21. Slide 21: 2-2. TMNL Growth Strategies

    Ⅱ Business Plan and Strategy by Domain 2-2. TMNL Growth Strategies • Contribute as the growth driver for the Group through innovative products and enhancing life and non-life cross-selling business model Continually launch unique protection-type products by proactively capitalizing Promotion of mult

  22. Slide 22: 3-1. International Insurance Projections

    Ⅱ Business Plan and Strategy by Domain 3-1. International Insurance Projections • FY2018 Projections is revised upward, reflecting the recent favorable results Net Premiums Written Business Unit Profits 2020 Plan CAGR+ approx. 5% 2020 Plan CAGR+ approx. 11% • On normalized basis, +5.7% YoY, steadily

  23. Slide 23: 3-2. International Insurance Projections by Regions

    Ⅱ Business Plan and Strategy by Domain 3-2. International Insurance Projections by Regions North America Europe Reinsurance Net Premiums Written YoY +4% → +7% Net Premiums Written YoY -0% → +0% Net Premiums Written YoY +5% → -5% ■ Business Unit Profits +31.0 ■Business Unit Profits ■ Business Unit Pr

  24. Slide 24: 3-3. International Insurance Major Strategies at Developed Markets

    Ⅱ Business Plan and Strategy by Domain 3-3. International Insurance Major Strategies at Developed Markets • 4 companies in Europe and the U.S. outperform the market growth after joining Tokio Marine Group • In addition to organic growth, aim to achieve further growth through expanding Group synergie

  25. Slide 25: 3-4. International Insurance Major Strategies at Emerging Markets

    Ⅱ Business Plan and Strategy by Domain 3-4. International Insurance Major Strategies at Emerging Markets • Promote further geographical diversification through capturing growth potential in emerging markets and a strategic M&A Growth exceeding the market India Brazil Growth rate*2 of P&C premiums in

  26. Slide 26: 3-5. International Insurance Strategies of Major Subsidiaries

    Ⅱ Business Plan and Strategy by Domain 3-5. International Insurance Strategies of Major Subsidiaries • Both net premiums written and business unit profits are revised upward due to the rate increases and renewal ratio exceeding the plan • Maintain growth potential and profitability outperforming the

  27. Slide 27: 3-5. International Insurance Strategies of Major Subsidiaries

    Ⅱ Business Plan and Strategy by Domain 3-5. International Insurance Strategies of Major Subsidiaries • Continue to grow mainly in employee benefits and retirement services market by leveraging the Tokio Marine brand and its strong financial foundation • Maintain profit growth by leveraging investmen

  28. Slide 28: 3-5. International Insurance Strategies of Major Subsidiaries

    Ⅱ Business Plan and Strategy by Domain 3-5. International Insurance Strategies of Major Subsidiaries • Revised upward due to rate increases in property lines and medical stop-loss as well as bolt-on M&A • Pursue organic growth in all businesses while maintaining high profitability and enhance existi

  29. Slide 29: 3-5. International Insurance Strategies of Major Subsidiaries

    Ⅱ Business Plan and Strategy by Domain 3-5. International Insurance Strategies of Major Subsidiaries • FY2018 Projection is revised upward, reflecting the recent favorable results • Strengthen profitable U.S. cover holder business while maintaining disciplined underwriting for profit stabilization B

  30. Slide 30: 3-5. International Insurance Strategies of Major Subsidiaries

    Ⅱ Business Plan and Strategy by Domain 3-5. International Insurance Strategies of Major Subsidiaries • Maintain top-line growth exceeding the market by providing high-quality operations and products/services that meet customers’ needs • Realized efficient business operations through systematized and

  31. Slide 31: Reference

    Reference •Tokio Marine Holdings Key Statistics •Risk Amount •Return to Shareholders •Basic Information (Domestic Non-Life) •Business Unit Profit •Basic Information (Domestic Life) •Reconciliation of Business Unit Profits and •Basic Information (International Insurance) Adjusted Net Income •Group As

  32. Slide 32: Tokio Marine Holdings Key Statistics

    Tokio Marine Holdings Key Statistics FY2018 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Projections *1 Net income (billions of yen) 23.1 128.4 71.9 6.0 129.5 184.1 247.4 254.5 273.8 284.1 320.0 Shareholders' equity after tax 1,627.8 2,169.0 1,886.5 1,839.6 2,340.7 2,712.7 3

  33. Slide 33: Return to Shareholders

    Return to Shareholders FY2018 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Projections Dividends per share 48yen 48yen 50yen 50yen 50yen 55yen 70yen 95yen 110yen 140円 160円 180yen *4 Dividends total 38.7bn yen 38.0bn yen 39.4bn yen 38.6bn yen 38.3bn yen 42.2bn yen 53.7

  34. Slide 34: Business Unit Profits

    Business Unit Profits (billions of yen) FY2018 FY2017 Projections Business Domain Results Original (a) Revised (b) (b)-(a) Domestic Non-Life 144.3 161.0 26.0 -135.0 TMNF 137.1 155.0 27.0 -128.0 NF 8.3 8.0 0.0 -8.0 Other -1.0 -2.0 -2.0 - *1 Domestic Life 98.4 35.0 85.0 50.0 TMNL 99.0 35.0 85.0 50.0 I

  35. Slide 35: Reconciliation of Business Unit Profits and Adjusted Net Income

    Reconciliation of Business Unit Profits and Adjusted Net Income (billions of yen) -64.0 Domestic life Gains on sales difference of business- between MCEV related equities and Domestic +56.6 financial non-life accounting International Financial -5.6 26.0 insurance /general Others (8%) 195.0 adjustmen

  36. Slide 36: 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 For each business domain, “Business Uni

  37. Slide 37: Definition of Terms

    Definition of Terms Definition of Adjusted Net Income / Adjusted Net Assets / Adjusted ROE Provision for Provision for Provision for Gains or losses on sales or Adjusted Net income = + catastrophe loss + contingency + price fluctuation - valuation of ALM*4 bonds Net Income*1 (consolidated)*2 reserve

  38. Slide 38: 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 FY2018 FY2018 FY2018 FY2018 FY2018 FY2018 FY2017 FY2017 FY2017 Projections Projections (b)-(a) Projections Projections (b)-(a) Projections Projections (b)-(a) Result

  39. Slide 39: Reconciliation of Business Unit Profits

    Reconciliation of Business Unit Profits Domestic Non-Life*1 （TMNF） ） (billions of yen) FY2017 FY2018 FY2018 FY2018 FY2017 2Q 2Q YoY Projections Projections (b)-(a) Results Results Results Original (a) Revised (b) Net income for accounting purposes 112.4 -10.3 -122.7 Net income for accounting purpose

  40. Slide 40: Mid-Term Business Plan Group Management Framework

    Mid-Term Business Plan Group Management Framework Based on ERM (Enterprise Risk Management), realize profit growth while maintaining financial soundness and strategically allocating capital Generate profits Sustainable profit growth Efficient deployment of capital Domestic non-life insurance busines

  41. Slide 41: Risk Amount (as of Sep. 30, 2018)

    Risk Amount (as of Sep. 30, 2018) • Risk amount after diversification as of Sep. 30, 2018 is 2.6 trillion yen • Risk diversification has been enhanced mainly through the ongoing expansion of business diversification and continuous sales of business-related equities Risk Trends of premiums and risk B

  42. Slide 42: 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 (FY2017 net premiums written basis) C/R（Private Insurance W/P Basis) Net Premiums Written (All lines, billions of yen) Marine 2.8% Fire 103.3% 12.8% 99.4% 99.5% CALI 97.9% 97.2

  43. Slide 43: Basic Information (Domestic Non-Life 2) - TMNF

    Basic Information (Domestic Non-Life 2) - TMNF 基本情報（国内損保② 基本情報（国内損保 Trend ②）in auto of underwriting results ＊東京海上日動の基本情報 insurance (W/P basis combined ratio) <Factors of profitability deterioration> <Measures to improve profitability> Increase in senior drivers with high accident Efforts to decrease

  44. Slide 44: Basic Information (Domestic Life 1) - TMNL

    Basic Information (Domestic Life 1) - TMNL • Achieve profit growth greatly exceeding the markets by developing product strategies focusing on “life insurance to protect one's living” in response to customer needs • Control the interest rate risks, etc. appropriately by transforming product portfolio

  45. Slide 45: Basic Information (Domestic Life 2) - TMNL Major Products

    Basic Information (Domestic Life 2) - TMNL Major Products (Products lineup as of Nov. 2018) (whole life insurance/ term insurance/ Whole life insurance for Receive benefits as if receiving Variable annuities for future monthly salary in times of needs longevity in case of death and asset accumulatio

  46. Slide 46: 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 2018 Capture emerging market growth and further geographical diversification Acqu

  47. Slide 47: 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) 2,000 1,808.0 1,800 1,741.0 Life 1,654.4 Reinsurance 1,600 1,400 1,304.0 1,302.6 1,200 1,074.5 North America 1,000 800 734.3 600 544.0 526.5 499.7 413.9 Eur

  48. Slide 48: Basic Information (International Insurance 3) - FY2018 Projections by regions

    Basic Information (International Insurance 3) - FY2018 Projections by regions FY2017 FY2018 Projections FY2018 Projections vs FY2017 FY2017 FY2018 Projections Actual Normalized basis Net Premiums Written Applied FX rate Actual Normalized Original Revised Normalized (billions of yen) Actual Normalize

  49. Slide 49: Group Asset Management

    Group Asset Management Ongoing efforts to reduce business-related equities • Book value of business-related equities declined to 39% from Mar. 31, 2002 through steady action • Sold total amount of approx. ¥2.1T*1 since FY2002 • In this mid-term business plan, we will also plan to sell ¥100 billion o

  50. Slide 50: Asset Portfolio

    Asset Portfolio Domestic Non-Life (TMNF) Domestic Life (TMNL) With regard to assets backing insurance liabilities, we aim to enhance Excluding assets in separate accounts, most assets are assets capital / cash efficiency, and increase long-term and stable for backing long-term insurance liabilities.

  51. Slide 51: ESG ~External Evaluation~

    ESG (Sustainably Enhancing Corporate Value) ~External Evaluation~ Tokio Marine Group has promoted ESG (Environment, Social, and Governance) through business activities, etc. and acquired high recognitions and got commendations in Japan and overseas SRI/ESG indices including Tokio Marine Group Japan

  52. Slide 52: ESG ~Promoting ESG~

    ESG (Sustainably Enhancing Corporate Value) ~Promoting ESG~ Participate in international initiatives and conduct surveys, researches, and proposal making activities in order to contribute to a safe, secure and sustainable future Also, actively work on SDGs and contribute to the resolution of social

  53. Slide 53: ESG ~Environment~

    ESG (Sustainably Enhancing Corporate Value) ~Environment~ Actively contribute to environmental protection, biodiversity preservation, and creation of environmental values through our business ■ Creating a green society through insurance business • Provide drone insurance to encourage broad use of dr

  54. Slide 54: ESG ~Social~

    ESG (Sustainably Enhancing Corporate Value) ~Social~ Contribute to solve social issues by providing safety and security to customers and society through our business ■ Response to large natural disasters Contribute to solve social issues through business • Stay close to our customers in times of nee

  55. Slide 55: ESG ~Social~

    ESG (Sustainably Enhancing Corporate Value) ~Social~ ■ Promoting health & productivity management • Implement PDCA steadily in the aim of employees’ Health & productivity management Contribute to solve social issues through business health promotion, revitalizing organization, and supporting compani

  56. Slide 56: ESG ~Governance~

    ESG (Sustainably Enhancing Corporate Value) ~Governance~ In April 2016, globalized and strengthened Group management system by establishing Group Chief Officer positions and committees as well as strengthening those functions Involvement of top management at overseas subsidiaries in solving Group ma

  57. Slide 57: ESG ~Governance~

    ESG (Sustainably Enhancing Corporate Value) ~Governance~ Strengthen global governance through promoting diversity and spreading core identity ■ Globalized and strengthened Group Chief ■ Enhancement of committees Officer positions International top management has taken the posts of Realize optimal de

  58. 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 revised projections) Iimpact on net income on financial accounting basis*2 Impact on adjusted net income*2 Decrease in profit from overseas Decrease in profit from overseas a

  59. Slide 59: MEMO

    MEMO Copyright (c) 2018 Tokio Marine Holdings, Inc.

  60. 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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