Tokio Marine : Financial document (sustainability climate nature report 2025)

Tolxio Marine Holdings

Climate & Nature REPORT

2025

TOKIO MARI NE

Editorial Policy for This Report

The purpose of Tokio Marine Holdings Climate & Nature Report 2025 is to describe to its stakeholders initiatives undertaken by the Group to address climate change and nature-related challenges. We believe we need to take an integrated approach since climate change and nature-related challenges are closely intertwined. This is why we are publishing this integrated report for the first time.

In addition to the CEO message outlining our determination to address climate change and nature-related challenges, the report describes the initiatives undertaken by the Group in line with the four pillars of the TCFD/TNFD recommendations: governance, strategies, risk (and its impact) management, and metrics and targets.

One of the special features highlight the efforts made by ID&E Group, which has recently joined Tokio Marine Group, to resolve environmental and societal challenges. Another casts a spotlight on Tokio Marine & Nichido Forest for the Future (Higashiyama Forest Park in Aki City, Kochi Prefecture), which contributes to achieving the 30 by 30 target.

Publication information

• Reporting period: Fiscal 2023 and fiscal 2024

• Reporting organizations: Tokio Marine Holdings and its major subsidiaries (consolidated Group companies and others, including Tokio Marine & Nichido) (hereafter collectively referred to as "Tokio Marine Group")

• Subject of analysis:

  Analysis of insurance underwriting portfolio: Tokio Marine & Nichido's corporate customer insurance underwriting Analysis of investment and financing portfolio: Japan listed stocks and bonds held by Tokio Marine & Nichido

  Analysis of Tokio Marine Group's business locations (including the value chain): business locations of Japan consolidated Group companies and some insurance agents of Tokio Marine & Nichido

• Reference guidelines: Recommendations of the TCFD and recommendations of the TNFD

Climate & Nature REPORT 2025

INDEX

CEO Message 4

Tokio Marine Group's Approach to Climate Change and Nature-related Challenges 5

Climate Change

Nature Related

Governance 8

Strategies 11

Risk and Impact Management 48

Metrics and Targets 51

Special Feature 1 ID&E Group's Efforts to Offer Solutions to Address Environmental and Societal challenges 56

Special Feature 2 Efforts to Achieve the 30 by 30 Target through Tokio Marine & Nichido Forest for the Future (Higashiyama Forest Park in Aki City, Kochi Prefecture) 58

Appendix 59

1

Governance

2

Strategies

3

Risk and Impact Management

4

Metrics and Targets

‌CEO Message

Masahiro Koike

President and Group CEO Tokio Marine Holdings, Inc.

Since it was established in 1879, Tokio Marine Group has dealt with ever-changing societal challenges based on the Group's purpose of to be there for our customers and society in times of need. From the development and provision of products and services to corporate citizenship activities, we have helped our customers and society to flourish while continuously increasing our corporate value by tirelessly attempting to address societal challenges through our business activities. This history is testament to our commitment to sustainability.

The Group has a global business presence, operating in more than 50 countries around the world. As such, what happens in any part of the world is now something that concerns us. We consider the intensification of natural disasters due to climate change as one of the most crucial societal challenges to us as we underwrite insurance primarily in Japan, a disaster-prone nation, but also across the rest of the world. Japan has experienced a succession of windstorms, floods and hail damage. In fact, natural disasters have occurred on an unprecedented scale, such as devastating flooding in Brazil in 2024 and wildfires in 2025 in California, United States, and Ofunato City in Iwate Prefecture, Japan.

Witnessing this reality has made me keenly aware of our mission as an insurance company and the weight of responsibility on our shoulders. Being able to promptly and reliably provide customers with the necessary support in times of need is our greatest strength. In the event of a major disaster, we not only quickly pay insurance claims but we send support staff to the affected area and also determine the damage using satellite imagery in a timely manner. Beyond our insurance products, we hope to help create a disaster-resilient society by offering greater value in domains such as measures to minimize damage and risks, disaster prevention, disaster mitigation, early recovery and recurrence prevention.

Degradation of natural capital and loss of biodiversity are also pressing challenges. Examples of natural capital degradation include a declining ability of forests to absorb carbon and the earth's ability to store water on land, which increases the risk of damage from heavy rains and flooding. Biodiversity loss leads to food and water insecurity and increases the risk of infectious diseases. We need to take concrete action now so that we can pass on a sustainable natural environment to future generations. Tokio Marine Group is in the process of analyzing the dependencies and impacts on nature in our business and across our portfolio and has been engaging in dialogue with a variety of stakeholders, including international organizations, governments, industry, academic institutions and civil society. In fact, we actively support customers who champion the achievement of the nature-positive status and the realization of a circular economy by offering insurance products and services.

We have identified eight material issues to underpin our sustainability strategy, by considering the external environment and their impact on the Group. Among them, "taking climate action," "improving disaster resilience" and "protecting the natural environment" are material issues directly linked to the climate change and nature-related challenges explained in this report. Tokio Marine Group is united in its efforts to address these challenges, as we seek to build a bridge to the future by realizing a sustainable society where people can live in safety and with peace of mind. We hope to achieve sustainable growth and be a presence that is truly needed 100 years from now.

1

Governance

2

Strategies

3

Risk and Impact Management

4

Metrics and Targets

Tokio Marine Group's Approach to Climate Change and Nature-related Challenges

‌Tokio Marine Group's Approach to Climate Change and Nature-related Challenges

➊ Corporate Philosophy and Sustainability Charter

As its Corporate Philosophy states, Tokio Marine Group continually strives to raise corporate value with customer trust as the foundation for all its activities. We have also established the Sustainability Charter, under which we are committed to fulfilling our corporate social responsibility (CSR) by implementing our Corporate Philosophy to achieve sustainable growth with society in line with the following six principles: providing products and services; respect for human dignity; protection of the global environment; contribution to local communities and societies; compliance; and communication. Solving nature-related challenges thus represents the actual application of our Corporate Philosophy.

In 2021, we formulated a range of policies: the Tokio Marine Group Basic Policy on Environment to protect the global environment and create environmental value through business activities as a Group; the Tokio Marine Group Basic Policy on Human Rights that advocates respect for the human rights of all people; and the Tokio Marine Group Policy to Address Environmental and Social Risks for our insurance underwriting and investment and financing. In March 2023, we established the Tokio Marine Group Responsible Procurement Guidelines as we work closely with our business partners in the value chain on climate action, disaster resilience, reducing environmental impacts, the effective utilization of resources and preserving natural capital and biodiversity.

❷ Materiality and Conservation of Natural Capital and Biodiversity

Based on the strong belief that it is our duty to pass on a bright future to the next generation, we have positioned future generations as a stakeholder. In 2021, we clarified eight material issues (materiality) that we must address based on the value we provide to each type of stakeholder and the societal challenges that affect our insurance business. We determined these material issues by seeking advice from stakeholders such as customers, investors, business partners, corporate citizenship organizations and employees, as well as specialists and outside experts while referencing principal frameworks related to domestic and international societal challenges such as the SDGs, ISO 26000 and New Industry Vision.

Among the eight material issues, "taking climate action,""improving disaster resilience" and "protecting the natural environment" are directly linked to climate change mitigation and adaptation and to conserving natural capital and biodiversity.

Tokio Marine Group is working to resolve societal challenges in these material issues through all business activities.

1

Take Climate Action

6

Protect the Natural Environment

7

Provide Opportunities for Future Generations

3

Support Healthy and Fulfilling Lives

2

Improve Disaster Resilience

8

Open

Go e

vernanc

with Integrity

4

Value People and Promote Diversity and Inclusion

5

Provide Innovative Solutions

1

Governance

2

Strategies

3

Risk and Impact Management

4

Metrics and Targets

Tokio Marine Group's Approach to Climate Change and Nature-related Challenges

❸ Key Initiatives for Climate Change and Nature-related Challenges

1999

2007

2009

2012

2013

2015

• Launch the Mangrove Planting Project

• Announce the Mangrove Planting 100-Year Declaration

• Launch the Green Gift Project, Forest for the Future, and Green Lessons

• Launch the Disaster Prevention Lessons

• Achieves the carbon neutral status (for 11 consecutive years since then)

• Tokio Marine employees participate in TCFD Launch the 80K Trees project

  • Common initiatives

  • Initiatives primarily focused on climate change

  • Initiatives primarily focused on nature-related challenges

    2016

    2017

    2019

    2020

    2021

    2022

    2023

    2024

    2025

• Announce the economic value of the ecosystem services provided through the Mangrove Planting Project

• Contribute to the publication of TCFD recommendations; Start to disclose climate-related information based on TCFD recommendations

• Announce the Mangrove-based Value Co-creation 100-Year Declaration Contribute to the establishment of the TCFD Consortium

• Announce the Basic Approach to Climate Change (revise every year since then)

• Establish the Sustainability Committee

• Participate in the GX League Join the TNFD Forum

  Participate in the 30 by 30 Alliance for Biodiversity established by Japan's Ministry of the Environment Launch the activity to protect and restore eelgrass bed

• Sign TNFD Early Adopters

• Start to disclose nature-related information based on TNFD recommendations Revise the Tokio Marine Group Basic Policy on Environment

• ID&E Group joins Tokio Marine Group

Tokio Marine & Nichido's Forest for the Future (Higashiyama Forest Park, Aki City, Kochi Prefecture) certified as a Nature Coexistence Site by Japan's Ministry of the Environment Issue the Climate & Nature Report

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Governance

2

Strategies

3

Risk and Impact Management

4

Metrics and Targets

Tokio Marine Group's Approach to Climate Change and Nature-related Challenges

➍ The Nexus between Climate Change and Nature-related Challenges, and Resilience

Climate change and nature-related challenges are inseparably linked. They also affect resilience. The intensification of natural disasters due to climate change causes severe damage to social infrastructure and natural capital, reducing both social and corporate resilience. Damage to ecosystems on land and in coastal areas accelerates climate change, threatening human and social sustainability. It is therefore more important than ever for Tokio Marine Group to understand the nexus and start appropriate initiatives. As an insurance group operating globally, we believe we can make considerable contributions through our insurance service. It is also necessary to offer greater value in pre- and post-event domains, such as disaster prevention, disaster mitigation, early recovery and recurrence prevention. These efforts in turn enhance social resilience, which ultimately ensures appropriate claims payments and helps reduce insurance premiums we receive from customers.

Over the years, Tokio Marine Group has worked to address these challenges through its business activities. Examples include the Mangrove Planting Project and Green Gift Project carried out by Tokio Marine & Nichido and the PHLY 80K Trees Initiative, a planting project launched by Philadelphia Insurance Companies in the United States. Mangrove trees have an exceptional ability to absorb and store carbon. They serve as a natural breakwater and protect communities and infrastructure in coastal areas, while also playing a crucial role in preserving biodiversity by purifying water and stabilizing soil. In addition, we are developing and providing solutions designed to reduce damage caused by natural disasters.

In terms of climate change, as a member of the TCFD, we have supported the publication of the TCFD recommendations and have disclosed climate-related financial information since 2017. We collaborate with relevant government and private-sector parties in Japan and overseas to formulate policy recommendations. We participated in the TCFD Insurer Pilot Group project, launched by the United Nations Environmental Programme Finance Initiative - Principles for Sustainable Insurance (UNEP FI-PSI), to support the 2021 publication of the report, "Insuring the Climate Transition." We also helped establish

the TCFD Consortium as well as supported the release of the TCFD Guidance and "A Guide to Flood Risk Assessments for Enhanced TCFD Disclosures" of the Ministry of Land, Infrastructure, Transport and Tourism.

In terms of natural capital, we participated in the TNFD Forum in 2022 and began disclosing information in accordance with the TNFD recommendations in 2024. We took part in the Nature-Positive Insurance Working Group, an initiative of UNEP FI-PSI, and helped publish the report, "Insuring a Resilient Nature-Positive Future: Global Guide for Insurers on Setting Priority Actions for Nature" in 2024.

We will continue to make concerted efforts across the Group and take an integrated approach to addressing climate change and nature-related challenges and resilience so that we can actively assist the transition to a sustainable society.

‌Governance

1

Governance

2

Strategies

3

Risk and Impact Management

4

Metrics and Targets

‌Governance

Various initiatives related to climate change and nature-related challenges are discussed at a meeting of the Board of Directors after the discussion at the Sustainability Committee and Management Meeting. In our governance structure, each relevant execution body voluntarily promotes initiatives under the supervision of the Board of Directors. Key related bodies and their roles are as follows.

➊ Supervisory and Execution Structure [Board of Directors]

The Board of Directors recognizes responding to climate change and nature-related challenges as a material management issue and assumes the role of supervising our sustainability strategy and initiatives. The Board deliberates on our sustainability policies including climate change and nature-related challenges, as well as evaluates and determines mid-term and single-year plans. The Board receives reports from the Sustainability Committee every quarter in principle to monitor sustainability initiatives and provides instructions as necessary. In addition, the Board of Directors holds deliberation on corporate strategy on the themes of the management environment and management issues, including climate change and nature-related challenges, to fully utilize the knowledge of outside directors and outside Audit & Supervisory Board members.

Corporate Governance, Integrated Annual Report 2024 (P.102-117)

In fiscal 2023, the Board met four times to deliberate on and receive reports about our sustainability initiatives including climate action.

[Group Chief Sustainability Officer (CSUO)]

We established the new position of CSUO in April 2021 to accelerate the promotion of sustainability strategy, including climate change and nature-related challenges, across the entire Group. The CSUO oversees the promotion and permeation of the sustainability strategy, presents related policies to the Board of Directors and the Management Meeting for discussion and takes the role of reporting the progress to these bodies.

[Sustainability Committee]

Chaired by the CSUO and comprising such members as chief officers, including the CEO, CFO and CRO, and management of overseas Group companies, the Sustainability Committee was established in April 2021 to deliberate on details of our sustainability initiatives and policies on a global basis and monitor the progress of each initiative. The committee met four times in fiscal 2024 to promote and execute the sustainability strategy, formulate mid- to long-term targets (KPIs) related to sustainability, formulate and review annual plans and deliberate on other items. The committee is also responsible for risk management for the entire Group, including climate change and nature-related risks, based on enterprise risk management (ERM) through discussions at the ERM Committee.

[Division Dedicated to Promoting Sustainability]

The Sustainability Division of the Corporate Planning Department is a division dedicated to the promotion of the Group's sustainability initiatives, including climate change and nature-related challenges. This division is responsible for operating the Sustainability Committee and discussing how to promote sustainability initiatives with working groups and task forces in which relevant departments participate, including the Risk Management Department. The division shares matters discussed with Group companies through departments and organizes educational and support activities to encourage the globally consistent implementation of sustainability initiatives across the Group.

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Governance

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Strategies

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Risk and Impact Management

4

Metrics and Targets

Tokio Marine Holdings' Organizational Structure for Promoting Sustainability ❷ Compensation for Directors and Executive Officers

Task Forces

TCFD

TNFD

CEO

CDIO

Diversity Council

CSUO

Sustainability Committee

(comprised of the CEO and chief officers)

CFO

CRO

(Note 1)

Sustainability Committee Secretariat

(Sustainability Division, Corporate

Planning Department)

(Note 2)

Working Groups

Operations

ERM Committee Secretariat

(Corporate Planning

Department/Risk Management Department)

(Note 3)

Products and services

Corporate (including human citizenship rights and DE&I) activities

Communications

Business strategies

ments

ERM

Committee

nt Meeting

Board of Directors

Supervision

From fiscal 2022, we have incorporated non-financial indicators concerning priority issues of our sustainability strategy, including climate action, into the performance-linked compensation for Directors and Executive Officers. We use the progress toward our vision as an indicator, and after the first assessment at the Sustainability Committee, deliberation and final decision is made at the Compensation Committee.

❸ Stakeholder Engagement Policies

Execution

Recognizing that protecting the environment and creating environmental value are important responsibilities for future generations, Tokio Marine Group has formulated the Basic Policy on Environment, which demonstrates our commitment to realizing a safe, secure and sustainable society through every aspect of our corporate activities. Accordingly, based on dialogue, cooperation and collaboration with various stakeholders, we are working to take climate action, conserve natural capital and biodiversity, sustainably improve the environment, prevent, and reduce pollution. We have also formulated the Basic Policy on Human Rights to promote respect for human rights throughout our business activities, including our entire value chain, as respect for human rights of all people is the foundation for implementing our Corporate Philosophy.

(Note 1) Secretariat (Sustainability Division, Corporate Planning Department): Operates the committee (as well as the working groups and task forces) and promotes the overall sustainability strategies across the Group.

(Note 2) Working Groups: Formulate and execute annual plans for respective issues, with the participation of relevant departments of Tokio Marine Holdings and members of Group companies. Formulate plans and coordinate actions regarding measures to address material issues. (Note 3) Task forces: Project teams formed by relevant members, including the Risk Management Department, to effectively respond to climate change and nature-related challenges of the entire Group.

In addition to our Basic Policy on Environment and Basic Policy on Human Rights, we have formulated the Policy to Address Environmental and Social Risks to identify risks that have a negative impact on the environment and society. This policy also stipulates that we undertake transactions with external partners based on factors such as their consideration of the environment and society.

These policies are presented on our corporate website and in our Sustainability Report and we also distribute a summary of key points of our approach to Group employees as an effort to ingrain these policies throughout the Group.

‌Strategies

1

Governance

2

Strategies

3

Risk and Impact Management

4

Metrics and Targets

‌Strategies

➊ Overview of Strategies

Tokio Marine Holdings identified "taking climate action," "improving disaster resilience" and "protecting the natural environment" as materialities and believes that climate change and nature-related issues should be a strategic theme in enhancing corporate value. There are many similarities between our two initiatives, namely achieving net zero emissions by 2050 and becoming nature positive, the aim of which is to protect and restore biodiversity. As such, we are executing transition plans to achieve the targets, including interim targets, by taking an integrated approach that also considers synergies and trade-offs.

Tokio Marine Group has identified the risks and opportunities associated with climate change and nature-related issues and analyzed their impacts on its business. In terms of climate change, we have performed an analysis of its impacts, including scenario analysis, on claims payments, asset management and business continuity. The results indicate that the Group can respond flexibly and be resilient to these impacts although natural disasters continue to intensify. As described in "The Nexus between Climate Change and Nature-related Challenges, and Resilience" on page 6, we believe initiatives to improve disaster resilience will help reduce the claims payments and insurance premiums we receive from customers. In terms of nature-related issues, we adopted the LEAP approach* to visualize the dependencies and impacts on nature in our business and across our portfolio and identified material sectors we need to prioritize. We will contribute to creating a society that is in harmony with nature through engagement such as dialogue with customers primarily in these material sectors.

Based on these analyses, we help customers and investment and financing recipients address issues as an insurance business operator (insurance product and service provider), institutional investor and asset manager. Specifically, we provide insurance products and services that support the transition to a decarbonized society, such as the promotion of renewable energy; insurance to compensate for the

damage caused by natural disasters and pollution; and services that lead to the prevention and mitigation of damage. We also make sustainable investments. To enhance the disaster resilience of society as a whole, we are working to offer greater value in pre- and post-event domains, such as disaster prevention and mitigation, speedy recovery and reoccurrence prevention.

As a global company, we actively collaborate and cooperate with international organizations and others so that we can grow with our stakeholders. As a good corporate citizen, we also support local communities through mangrove planting and research and educational activities designed to enhance social resilience.

* Short for Locate, Evaluate, Assess and Prepare, LEAP is an integrated approach developed by the TNFD for assessing and managing nature-related issues.

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Governance

2

Strategies

3

Risk and Impact Management

4

Metrics and Targets

‌❷ Plan for the transition to a decarbonized society

Tokio Marine Group has set the targets of achieving net-zero emissions by 2050 and realizing a society in harmony with nature and formulated a plan for transition encompassing interim targets. The three pillars of our plan for transition are providing solutions through insurance products and services as well as investment and financing that support the transition to a decarbonization society; dialogue (engagement) with business partners for the purpose of decarbonization; and insurance underwriting and investment

and financing policies.

Aiming to build a society in harmony with nature, we are stepping up our efforts to promote certification of sites in harmony with nature, providing insurance through engagement with our business partners and supporting information disclosure based on the TNFD recommendations. We will review our plans by considering technological advances in decarbonization and nature-based solution domains as well as the expectations of society so that we can take effective action in line with the transition plan.

Achieving

a decarbonized society

Providing solutions

Dialogue (engagement)

Insurance underwriting and investment and financing policies

Realizing a society in harmony with nature

Direct operations Corporate citizenship activities

Efforts to date

• 2020: Acquired GCube specializing in underwriting insurance for renewable energy business

• 2023: Established a company specializing in supporting corporate customers' decarbonization efforts

• 2024: Launched the GX Project to promote joint development of decarbonization-related products on a Group basis

• 2022-: Provide decarbonization support to insurance customers and investment and financing recipients through constructive dialogue

• 2020-: Restrict new transactions related to coal-fired power generation plants and thermal coal mining projects

• 2022-: Restrict new transactions related to oil and gas company extraction projects in the Arctic Circle and oil sands mining

• 2023-: Restrict transactions*1with companies if they fail to have decarbonization plans as of 2030

• 2022-: Joined the 30 by 30 Alliance for Biodiversity established by the Ministry of the Environment to commence initiatives for the certification of sites in harmony with nature

• 2024-: Analyzed insurance customers and investment and financing recipients and identified "Industrials*3" and "Consumer Discretionary*4" as our material sectors

  Help realize a society in harmony with nature through engagement with businesses primarily in these material sectors

  Tokio Marine & Nichido Forest for the Future (Higashiyama Forest Park in Aki City, Kochi Prefecture) certified as a site in harmony with nature

• Reduce environmental impact associated with direct operations (introduction of renewable energy, etc.)

• Corporate citizenship activities

• 1999: Launched mangrove planting

• 2007: Mangrove Planting 100-Year Declaration

• 2019: Mangrove-based Value Co-creation 100-Year Declaration

• 2022: Launched activities to protect and restore eelgrass beds

2026

Decarbonization-related insurance underwritten 45 billion yen

2030

Hold dialogue with 200 high-emission corporate customers and make deeper engagements with 160 companies among them*1

Support the achievement of nature positivity

Conservation, creation and registration of sites in harmony with nature that help achieve the 30 by 30 targets

2050

Achieve carbon neutrality (encompassing insurance underwriting and investment and financing)

*1 Result and target of Tokio Marine & Nichido *2 Target of Tokio Marine & Nichido, Tokio Marine & Nichido Life and Nisshin Fire

*3 Trading Companies and Distributors, Industrial Machinery, Construction Machinery and Heavy Trucks, Air Freight and Logistics, Aerospace and Defense, etc.

*4 Automobile Manufacturers, Auto Parts and Equipment, Household Appliances, etc.

Climate ＆ Nature REPORT 2025 13

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Governance

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Strategies

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Risk and Impact Management

4

Metrics and Targets

‌❸ Recognition of Risks and Opportunities

Regarding strategy, recognizing inherent risks is essential. Tokio Marine Group assumes an increase in climate change and nature-related risks and accordingly identifies and evaluates their impact on our business. Climate change-related risks include physical risks and transition risks. Physical risks arise from an increase in the frequency and intensity of natural disasters caused by climate change, while transition risks result from the impacts of the transition to a decarbonized society on the corporate value of investee companies and assets held by us. On the other hand, initiatives to mitigate and adapt to climate change also provide business opportunities for Tokio Marine Group. An analysis of the way in which weather events as well as changes in the disaster resilience of society and asset exposure may affect the Group is described later.

There are two types of nature-related risks. One is physical risks, which result from the degradation of nature and consequential loss of ecosystem services. The other is transition risks, which stem from a misalignment of economic actors with actions aimed at protecting and restoring nature or reducing negative impacts on nature. Nature-related opportunities are generated by creating positive impacts on nature or mitigating negative impacts on nature.

The chart on the right shows examples of events for each risk and opportunity based on the TCFD/TNFD recommendations and examples of related risks and opportunities in the Group's business activities.

Note: Short term: less than 3 years, Medium term: 3-10 years, Long term: 10 years or more

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Governance

2

Strategies

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Risk and Impact Management

4

Metrics and Targets

‌➍ Climate Change Analysis

In terms of climate change, we have analyzed its impacts, such as through scenario analysis, on claims payments, asset management and business continuity. Scenario analysis is a process of identifying and evaluating the potential impact of climate change based on certain scenarios. The Group believes it can be flexible and resilient to these impacts, as most non-life insurance policies are relatively short term and the Group's assets under management are mainly highly liquid financial assets. Physical risks are those related to physical impacts of climate change. Climate change increases the frequency and intensity of natural disasters, which could impact claims payments and business continuity. We conduct a scenario analysis of physical risks as part of our efforts to identify and assess their impact.i

Impact on Claims Payments

The Group takes part in the United Nations Environment Programme Finance Initiative (UNEP FI). Using analysis and assessment tools developed by UNEP FI's climate change impact assessment project, we have created the following assessment of the impact of changes in the intensity (wind speed) and number of tropical cyclones on the change in our insurance claims paid under the IPCC's Representative Concentration Pathway (RCP) 8.5 scenario forecast as of 2050.

The Tokio Marine Research Institute, a Group company, began conducting research in 2007 to evaluate and calculate the impact on insurance loss of changes in wind disaster risk associated with typhoons under future climate conditions (impact under the IPCC's RCP4.5 and RCP8.5 scenarios) and changes in flood risk due to increased rainfall (impact resulting from temperature increases of 2°C and 4°C). Referring to the results of this scenario analysis, we assess the impact on our insurance claims paid of natural disasters resulting from increasingly severe climate change.

Future projections of climate change scenarios (+2°C, +4°C, etc.) are subject to uncertainties, as described later. In assessing the impact of climate change, it is also important to evaluate not only weather phenomena but also the disaster resilience of society to disasters as well as the extent to which real estate and personal properties will be concentrated in areas exposed to natural disaster risk in the future and the extent to which their asset values will increase (in other words, the extent to which asset concentration will change). The basis for these projections and assessments is indicated in the following pages.

Changes in claims payments in 2050

* The figures above reflect economic losses, assuming the same impact on claims payments.

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Governance

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Strategies

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Risk and Impact Management

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Metrics and Targets

1. Changes in Weather Events

   How a weather event will change due to the impact of climate change and the level of confidence of such an impact forecast will vary depending on the type of weather event. Figure 1 shows the certainty of climate change impact projections by weather event type. As seen in the figure, the level of confidence of impact projections for extreme rainfall (heavy rains) is higher than that for tropical cyclones, such as typhoons and hurricanes, but the impact on extreme rainfall (heavy rains) involves greater uncertainty compared to such temperature variations as extreme heat (heat wave) or extreme cold (cold wave). Confidence in the impact of climate change on wildfire has substantially increased in recent scientific literature.

   Extream cold

   Extream heat

   Droughts

   Extreme snow & ice

   Extream rainfall

   Extra-

   tropical cyclones

   Severe convective storms

   cyclones

   Tropical Wildfires

   High confidence

   For heavy rains and tropical cyclones, which are two weather events that considerably affect Tokio Marine Group, we consider the impact of climate change as follows.

   (1)-a Impact of Climate Change on Heavy Rains

   The frequency and intensity of heavy rains have increased in many regions due to climate change. In Japan, the frequency of heavy rains has been on the rise since 1900 (Figure 2). The IPCC Sixth Assessment Report states that the intensity (precipitation) of heavy rains will increase by approximately 7% for every 1ºC temperature rise. It has also been reported that climate change is likely to increase flood risk significantly, particularly in flood-prone regions.

   2.5

   Confidence in detecting climate change impacts on specific events

   Number of days per year

   2

   1.5

   1

   0.5

   0 1901 1904 1907 1910 1913 1916 1919 1922 1925 1928 1931 1934 1937 1940 1943 1946 1949 1952 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 2021

   Low confidence

   High confidence

   How well we understand the likely influence on event types in general

   Figure 2: Days per year with daily precipitation of 100 mm or more

   Source: Tokio Marine Holdings based on materials from the Japan Meteorological Agency (website)

   Figure 1: Confidence of impact forecasts of climate change

   Source: Tokio Marine Holdings based on material prepared by the U.S. National Oceanic and Atmospheric Administration (2023)

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   Governance

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   Strategies

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   Risk and Impact Management

   4

   Metrics and Targets

   Appendix

Tokio Marine Group's Approach to Climate Change and Nature-related Challenges

(1)-b Impact of Climate Change on Tropical Cyclones

Atmospheric and oceanic large-scale circulations (e.g., El Niño, Atlantic Multidecadal Oscillation and monsoons) are closely related to the formation, development and movement of tropical cyclones. As climate change affects each of these factors, the impact of climate change on tropical cyclones

In the future, while the number of tropical cyclones is expected to level off or decrease overall, the ratio of intense tropical cyclones is forecast to increase. As such, there are both decrease and increase projections for the number of intense tropical cyclones (IPCC Sixth Assessment Report).

consequently becomes more uncertain.

First, looking at past trends, the IPCC Sixth Assessment Report reported an increase in the number of intense typhoons in Japan. However, the confidence level is not yet high, and longer-term, higher-quality observations will be needed to monitor changes in long-term trends (Japan Meteorological Agency).

As for hurricanes making landfall in the United States, even though the ratio of major hurricanes has

Wind speed (increase)

%

Change rate (%)

30

20

10

0

Precipitation (increase)

%

30

20

10

0

Number of all tropical cyclones (Both Increase/Decrease)

%

80

40

0

-40

%

80

40

0

-40

Number of major cyclones (Both Increase/Decrease)

risen over the past 40 years, a longer-term survey covering the period from 1900 revealed that there is no discernible trend both in the number of total hurricanes and that of major hurricanes (IPCC Sixth Assessment Report).

Typhoon Hurricane Global Typhoon Hurricane Global Typhoon Hurricane Global Typhoon Hurricane Global

Figure 4: Changes in tropical cyclones due to a temperature change of +2ºC

Source: Tokio Marine Holdings based on Knutson et al., 2020*

Number of continental U.S. landfalling hurricanes

8

7

6

5

4

All hurricanes

3

* Thomas Knutson, Suzana J. Camargo, Johnny C. L. Chan, Kerry Emanuel, Chang-Hoi Ho, James Kossin, Mrutyunjay Mohapatra, Masaki Satoh, Masato Sugi, Kevin Walsh, and Liguang Wu, 2020: Tropical cyclones and climate change assessment part II: Projected response to anthropogenic warming. Bull. Amer. Meteor. Soc.,101, E303‒E322, https://doi.org/10.1175/BAMS-D-18-0194.1 (© American Meteorological Society. Used with permission.)

Major hurricanes

4 2

3

2 1

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1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

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1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Figure 3: Number of hurricanes making landfall in the United States

Source: Tokio Marine Holdings based on Klotzbach et al., 2018*

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1. Changes in Disaster Resilience in Society and Asset Exposure

   As shown in Figure 2 on page 16, the frequency of heavy rains in Japan has been increasing since 1900. Figure 5 below, on the other hand, shows a declining trend for flooded areas. This is because Japan's disaster prevention infrastructure, including embankments, has improved since the mid-19th century and is effectively reducing the occurrence of floods during heavy rains.

   Flooded area

   (housing districts and others) (ha)

   120,000

   100,000

   80,000

   60,000

   40,000

   20,000

   0

   年

   1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019

   Figure 5: Areas inundated by floods (ha)

   Source: Tokio Marine Holdings based on materials from the Ministry of Land, Infrastructure, Transport and Tourism (flood statistics)

   (2)-a Changes in Disaster Resilience in Society

   In Japan, revisions to the Building Standards Act have proved to directly translate into the better resilience of society as a whole. In fact, revisions made in 1981 to the seismic building codes and in 2000 to the wind pressure resistance building codes have greatly contributed to the improved resistance of buildings against natural disasters. More recently, Typhoon Faxai, which made landfall in 2019 and caused damage to the roofs of many houses, has prompted revisions to the standards for roofing on countermeasures against intense winds, which were enacted in January 2022. In addition, the Ministry of Land, Infrastructure, Transport and Tourism has already announced its policy that the anticipated intensification of natural disasters should be considered in improving disaster prevention infrastructure in the future.

   Overseas, efforts to increase resilience throughout society have also been under way. The United States, for example, has improved its disaster prevention infrastructure and revised building codes following huge natural disasters, including large hurricanes.

   In keeping with the move toward strengthening resilience worldwide, Tokio Marine Group has been contributing to greater resilience of the entire society by offering greater value of its insurance products in the pre- and post-event domains, such as disaster prevention and mitigation, speedy recovery and reoccurrence prevention.

   The amount of insurance claims will vary significantly if there is a change in asset exposure, that is, a change in the degree of concentration of assets or in the value of assets in areas exposed to natural disaster risk.

   In this way, we recognize that identifying changes in weather events themselves, such as heavy rains and typhoons, as well as changes in society's disaster resilience to disasters and in asset exposure are essential in predicting the impacts of natural disasters.

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(2)-b Recognition of Changes in Asset Exposure

In Japan, an influx of people into urban areas is expected to continue in the future. Over the period from 2020 to 2050, even though the total number of general households in the country is projected to decline 5.6% on national average, an increase is expected in some prefectures, including Tokyo. As such, the trend of changes in asset exposure varies from region to region.

Changes in the exposure geographic distribution are important in considering natural disaster damage both in Japan and overseas. In the United States, insurance loss caused by hurricanes in the past is known to be on an upward trend, but when the impact of a change in inflation, wealth properties and population is normalized, there is no longer a significant trend. Thus, a rise in insurance loss is mostly a result of these factors.

From the viewpoint of damage due to natural disasters, an important factor is the exact location of assets (whether within a hazardous area). In response to frequent occurrence of natural disasters in recent years, Japan's Ministry of Land, Infrastructure, Transport and Tourism has stated that it is important to consider flood risk reduction when determining the locations of housing districts and city functions. Accordingly, Tokio Marine Group is monitoring the policy trends of the national and local governments.

5% or higher

0 to less than 5%

-5% to less than 0%

-10% to less than -5%

Less than -10%

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Adjusted by inflation only

Continental U.S. economic loss from hurricanes (USD billion)

200

150

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Adjusted by inflation and exposure

250

200

150

100

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1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Figure 7: Insurance loss due to hurricanes on the U.S. mainland

Figure 6: Rate of increase in the number of households from 2020 to 2050

Source: National Institute of Population and Social Security Research, "Number of Household Projections for Japan (Estimates by prefecture) (2024)"

Tokio Marine Holdings based on insurance loss data of Collins and Lowe (2001)*and insurance loss data quired by the Company*

* Collins, D. J., and Lowe, S. P. (2001). A macro validation dataset for U.S. hurricane models. Casualty Actuarial Society, Winter Forum, pp. 217-252

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1. Incurred Losses in the Recent Major Natural Disasters

The table below shows the recent major natural disasters and their incurred losses. In Japan and the United States, disasters cause a certain level of damage each year that involves insurance claims payments. As such, we enforce appropriate risk control by leveraging risk diversification and reinsurance.

Column Impact of Climate Change on Wildfires

The IPCC Sixth Assessment Report finds that climate change is increasing the frequency and severity of wildfires worldwide. Rising temperatures and shifting precipitation patterns are contributing to drier conditions and more fire-prone weather in many regions.

The report projects that at 4°C of warming, the global burned area could increase by 50-70%, with fire frequency rising by about 30%. In the United States, there has been a large increase in area burned observed over the past 20 years (see the figure below).

Wildfires will exacerbate climate change by destroying forests, which are natural carbon sinks, releasing stored CO2, methane, and other greenhouse gases into the atmosphere.

We are improving the methods we use for quantitative assessment to determine the risk of various natural disasters, including wildfires, that may affect our profits.

*1 Total of Tokio Marine & Nichido, Nisshin Fire and E. design Insurance

*2 Before tax

-4 -3

Change in burned acres per square mile of land area:

-1 -0.20.2 1 2 3 4

Figure: Changes in Annual Burned Acreagek by State Between 1984-2002 and 2003-2021

Source: U.S. Environmental Protection Agency

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Impact on Asset Management

Climate change poses transition risks as well as the physical risks described in the preceding pages. Transition risks refer to risks that may impair the corporate value of our investment recipients and affect the business of Tokio Marine Group in the same way that physical risks do. Transition risks arise due to rapid changes that take place as the world accelerates its decarbonization efforts, including tightening laws and regulations, technological innovation, fluctuations in asset value as well as changes in the investment environment and customer needs.

The Group is working to reduce the total amount of shares it holds as business-related equities and conduct engagement and other means of mitigating the negative impacts described above.

We estimate the impact of physical and transition risks on assets under management by Tokio Marine Group (equities, corporate bonds, commercial mortgage-backed securities - CMBS and government bonds) using "Aladdin Climate," a model provided by BlackRock Solutions. With the model, we quantify the impact on corporate value due to changes in scenario variables (carbon prices, energy demand, fuel prices, emissions, temperature, etc.) based on scenarios provided by The Network of Central Banks and Supervisors for Greening the Financial System (NGFS).

Specifically, we looked at the Group's assets under management (equities, corporate bonds, CMBS and government bonds) as of March 31, 2025. To assess physical risks, we compared the pre-simulation asset value as of March 31, 2025, with the post-simulation asset value following the two scenarios below. To assess transition risks, we compared the asset value when current policies continue to 2050*1 with the post-simulation asset value following the two scenarios below. We then quantified both risks. The simulation results on the impact on asset value between now and 2050 are as follows:

❶ Orderly: Net Zero 2050 (Assuming a temperature rise suppressed to 1.5°C and net zero CO2 emission both by 2050)

Disorderly: Delayed Transition (Assuming a 1.8°C temperature rise by 2050 due to delayed policy changes)

*1 NGFS's Hot House World - Current Policies scenario, assuming limited policy changes and a 3.3°C temperature rise at the end of this century

* The Aladdin Climate analytics of BlackRock Solutions contained in this report should not be construed as a characterization of the materiality or financial impact of the corresponding information. The Aladdin Climate analytics includes non-financial metrics and involves measurement uncertainties resulting from limitations inherent to the nature of the corresponding data and the methods used for determining such data.

The Aladdin Climate analytics is not fixed and is likely to change and evolve over time. The Aladdin Climate analytics relies on relatively new analysis methods, and there are limited peer reviews or comparable data available. BlackRock Solutions does not guarantee and shall not be responsible for the content, accuracy, timeliness, non-infringement or completeness of the Aladdin Climate analytics contained herein or have any liability resulting from the use of the Aladdin Climate analytics in this report or any actions taken in reliance on any information herein.

It should be noted that the model results used by Tokio Marine Group does not separately calculate the positive effects (market superiority or business opportunities) generated by technically implementing climate change mitigation and adaptation measures as we transition to a low-carbon society. Since this and other quantification models of climate change are still in the development stage, undergoing upgrades based on the latest research findings, we don't use the data shown above in our management decision-making process yet, but will continue to carry out research and investigations to explore more appropriate ways to utilize such quantification modeling methods.

Climate ＆ Nature REPORT 2025 21

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Impact on Business Continuity: Promoting Climate Change Adaptation Measures

Tokio Marine Group uses multiple scenarios*1 to perform analysis and evaluation*2 on the impact of climate change risk on our operations using holistic and context-specific approaches. By doing so, we are promoting climate action and initiatives to increase resilience against disasters.

*1 Including IPCC's Shared Socioeconomic Pathway (SSP) 5-8.5, SSP3-7.0, SSP2-3.5, SSP1-2.6, SSP1-9, RCP8.5, RCP6.0, RCP4.5 and RCP2.6 scenarios

*2 Climate change risk analysis and evaluation conducted in collaboration with Resilience of the United Kingdom

[Holistic Approach]

Based on a holistic approach, we use multiple scenarios to analyze and evaluate, both quantitatively and qualitatively, the impact of an increase in weather disasters (such as heavy rains and floods) caused by climate change on our operations. Accordingly, we have been implementing measures from medium- to long-term (about two to five years) and short-term (within one year) viewpoints. On the whole, we have specifically concluded that an increase in weather disasters will not have a profound impact on our operations as compared to the manufacturing and other industries for a number of reasons. For example, insurance products represent an intangible service and do not necessarily require physical sales bases, and their development and provision involve minor supply chain risks such as the procurement of raw materials.

[Context-Specific Approach]

Based on a context-specific approach, we use multiple scenarios to analyze and evaluate, both qualitatively and quantitatively, the impact of an increase in weather disasters (such as heavy rains and floods) caused by climate change on our operations. Accordingly, we have been promoting initiatives to protect our own assets from weather disasters, which are expected to become more severe due to climate change. Specifically, we are examining measures from medium- to long-term (about two to five years) and short-term (within one year) viewpoints and implementing measures against flood disasters, such as installing emergency power generators and more water bars at our major bases.

• Findings from the Analysis of Water-Related Risks at Our Business Offices in Japan

In fiscal 2023, in an effort to understand water-related risks facing our business offices in Japan, we analyzed and assessed water-related physical risks (flood inundation and storm surge, landslide disasters, etc.) at our consolidated subsidiaries in Japan and some insurance agents* of Tokio Marine & Nichido by using the digital national land information provided by the Ministry of Land, Infrastructure, Transport and Tourism. As a result, among the 1,154 business offices analyzed (489 business offices of Group companies in Japan and 665 business offices of Tokio Marine & Nichido's insurance agents), 203 business offices are located in areas with high risk of flooding, while 12 are in areas with high risk of landslide disasters. We have already investigated and analyzed the flood risk at our business offices and have not detected any notable negative impacts associated with the risk at this point. In addition, each office has independently implemented crisis management measures. Nonetheless, these water-related risks may become increasingly apparent in the future, following the rise in the sea level and more frequent heavy rains due to global warming as well as changes in land use. Thus, in addition to the crisis management measures of each office, we will promote initiatives to educate and raise awareness of employees and other related parties.

* Top-tier agents of Tokio Marine & Nichido, designated as "TOP QUALITY" agents, and Tokio Marine & Nichido Partners, wholly owned insurance agents of Tokio Marine & Nichido

Findings of Analysis of Our Business Offices in Japan (Including the Value Chain): Number of Business Offices Located in Priority Locations Exposed to Flood Immersion and Landslide Risks

[Data Sources]

• Flood immersion risk: Based on the digital national land information (areas subject to possible immersion by floods) (by river) (Ministry of Land, Infrastructure, Transport and Tourism) https://nlftp.mlit.go.jp/ksj/gml/datalist/KsjTmplt-A31a-v4_0.html

• Landslide disaster risk: Based on the digital national land information (areas prone to landslide disasters) (Ministry of Land, Infrastructure, Transport and Tourism) https://nlftp.mlit.go.jp/ksj/gml/datalist/KsjTmplt-A33-v2_0.html

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‌❺ Nature-related Issue Analysis

Tokio Marine Group globally engages in business revolved around insurance. Similar to the effects of GHG emissions on climate action, it is important to recognize and reduce the dependencies and impacts not only of our own operations but also of businesses and value chains of insurance cutomers as well as investment and financing recipients on natural capital. For this reason, we assessed the operations of Tokio Marine Group, including its value chain, and conducted environmental surveys to ensure that 29 Business operations located in nature conservation and similar areas (sales offices of Group companies and major insurance agencies in Japan) do not have significant negative impacts on natural capital and biodiversity.

In terms of businesses and value chains of insurance customers as well as investment and financing recipients, we believe it is important to identify the sectors, value chains and regions that have high dependencies and impacts on natural capital in our insurance underwriting and investment and financing portfolios and then use the findings for our nature-related risk management and capturing new business opportunities as well as at customers and our investment and financing recipients. This report focuses on the detailed analysis of insurance underwriting and investment and financing portfolios and summarizes nature-related risks and opportunities in our business as well as future policies.

• Overview of Approach Adopted to Analyze Insurance Underwriting and Investment and Financing Portfolios

  In fiscal 2023, Tokio Marine Group analyzed insurance underwriting and investment and financing portfolios of Tokio Marine & Nichido using the ENCORE*1 analysis tool to identify nature-related material sectors and their dependencies and impacts on natural capital (STEP 1 and STEP 2 in the right chart).

  In fiscal 2024, to deepen our understanding on the dependencies and impacts on natural capital in the material sectors identified in fiscal 2023, we targeted the automobile manufacturing industry for the LEAP approach analysis (STEP 3). We chose this industry because it is considered high risk, as listed in the TNFD/TCFD's list of material sectors, and also because of its high relevance to nature-related business opportunities for Tokio Marine, which operates insurance and solution businesses. The analysis was conducted using the LEAP approach, as follows (STEP 4):

  Locate: Automobile manufacturers, tire manufacturers and battery manufacturers were selected for analysis as their businesses involve processes with high dependencies and impacts on natural capital among the value chain of the automobile manufacturing industry.

  Evaluate: Identify priority areas in which the dependencies and impacts on natural capital are high, from among vehicle assembly sites run directly by automobile manufacturers as well as tire/battery manufacturing sites in the value chain.

  Assess: Identify nature-related risks and opportunities that customers as well as investment and financing recipients have in the priority areas through assessment.

  Prepare: Consider our future policies regarding the major nature-related risks and opportunities that have been identified.

  Approach taken to analyze insurance underwriting and investment and financing portfolios Fiscal 2023 Fiscal 2024

  STEP 1

  Specifying material sectors

  STEP 3

  Selecting sectors from among material sectors targeted for deeper analysis using the LEAP approach

  STEP 2

  Identifying high dependencies and impacts in material sectors

  STEP 4

  Conducting analysis using the LEAP approach

  *1 Short for exploring natural capital opportunities, risks and exposure, ENCORE is a tool to assess the potential dependencies and impacts of business activities on natural capital and biodiversity

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• STEP 1: Specifying Material Sectors

  Tokio Marine Group underwrites insurance and provides investment and financing for various companies. We thus need to identify priority sectors in our portfolios to effectively respond to nature-related risks and opportunities. In fiscal 2023, we performed ENCORE analysis on insurance underwriting (insurance policies with companies*2) and investment and financing (domestic listed equities and domestic bonds) recipients of Tokio Marine & Nichido, which is responsible for most of the corporate transactions in the Group. The analysis was conducted using the two axes of "dependencies/impacts" and "transaction volume in insurance underwriting and investment and financing portfolios" as defined in the ENCORE analysis tool. Consequently, we identified "Consumer Discretionary*3" and "Industrials*4" as our material sectors.

• STEP 2: Identifying High Dependencies and Impacts in Material Sectors

  We analyzed our climate- and nature-related dependencies and impacts in the identified material sectors and found that our dependencies and impacts are high on the following ecosystem services and impact drivers of natural capital, respectively. (See Appendix 1 for detailed analysis.)

  In the Consumer Discretionary category, our dependencies are high on the ecosystem services of flood and storm protection, groundwater, surface water, water flow regulation and mediation of sensory impacts. Meanwhile, we have high impacts on natural capital through greenhouse gas (GHG) emissions, soil pollutants, water pollutants, water use, solid waste, non-GHG air pollution and light and noise

  Identifying Key Sectors Dependencies on nature

  =Insurance underwriting

  =Investment and financing
  
  

  Impacts on nature

  pollution.

  High
  Mate	rials
  Real Es	tate
  		Consumer D	iscretionary
  Ene	rgy
  		Indus	trials
  Util	ties
  Consume	r Staples
  Information Technology Health Care
  		Telecommunication Services
  Telecommunication Services
  		High
  Financials Low

  In the Industrials category, we have high dependencies on the ecosystem services of flood and storm protection and climate regulation, while we cause high impacts on natural capital through GHG emissions, soil pollutants, water pollutants, non-GHG air pollution and light and noise pollution.

  Both the Consumer Discretionary and Industrials sectors show high dependencies and impacts on

  • Dependencies on nature

    Ecosystem Services

    Flood & Storm Regulation

    Ground Water

    Surface Water

    Water FlowRegulation

    Mediation of Sensory Impacts

    Climate Regulation

    Water Quality

    Dilution by Atmosphere & Ecosystems

    Mass Stabilization & Erosion Control

    Filtration

    Ventilation

    Consumer Discretionary

    Industrials

    i

    i

    Dependencies

    Impact

    High
    Mate	rials
    Consume	r Staples
    Real Es	tate	Consumer D	iscretionary
    Util	ties	Indus	trials
    Ene	rgy
    Health	Care
    InformationTechnology
    Telecommunication Services		Telecommunication Services
    Financials Low		High

    • Impacts on nature

      Transaction volume

      Transaction volume

      Impact Drivers		GHG Emissions	Soil Pollutants	Water Pollutants	Water Use	Solid Waste	Non-GHG Air Pollutants	Light and Noise Pollution	Terrestrial Ecosystem Use	Marine Ecosystem Use
      	Consumer Discretionary
      	Industrials

      *2 Listed companies with 1,000 or more employees

      *3 Consumer Discretionary: Automobile Manufacturers, Auto Parts and Equipment, Household Appliances, etc.

      *4 Industrials: Trading Companies and Distributors, Industrial Machinery, Construction Machinery and Heavy Trucks, Air Freight and Logistics, Aerospace and Defense, etc.

      Low

      High

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water-related items, GHG emissions and land, which indicates that the relationship with natural capital is fundamental to our insurance underwriting and investment and financing portfolios.

• STEP 3: Selecting Subsectors from among Material Sectors Targeted for Deeper Analysis Using the LEAP Approach

To make use of the analysis results obtained at STEP 1 and STEP 2 to the enhancement of our nature-related risk management and the development of business opportunities, we must fully understand the value chain structure, activities and products of each sector and analyze their nature-related risks in detail. There are various subsectors within the Consumer Discretionary and Industrials sectors, which were identified as material. Therefore, it is necessary to identify these subsectors first to carry out effective analysis using the LEAP approach.

*5 Including the possibility of target and objective setting in line with the Sustainability Accounting Standards Board (SASB)

Subsectors are shown in the figure at the lower left. They were selected from several perspectives: whether they belong to the sectors listed in the TNFD/TCFD's list of priority sectors; whether they are associated with our nature-related business opportunities such as the provision of insurance and solution businesses (subsectors whose average impact on nature is high in our analysis on insurance underwriting and investment and financing portfolios using the ENCORE analysis tool, and for which we are better positioned to help address challenges); and whether it is possible to obtain data. After narrowing down the subsectors, we selected automobile manufacturing.

The actual analysis carried out using the LEAP approach is as described in STEP 4.

• STEP 4: Locate-Identifying Key Processes in the Value Chain

  At the Locate stage, we identified processes fundamental to the relationship with nature in the automobile manufacturing industry's value chain. Specifically, we organized information on the automobile

  Manufacturing of parts made from rubber, metal and other materials

  Disposal/recycling

  Automobile manufacturing

  Sales, use and repair

  Procurement and manufacturing of materials

  Other

  Other

  Downstream

Each circle indicates the size of the trade volume of resource inputs (use) and outputs verified using EXIOBASE.

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manufacturing industry's value chain and processes using the analysis results and findings obtained by the World Economic Forum and Organisation for Economic Co-operation and Development as a reference. We then verified the resource inputs (use) and outputs of each sector using EXIOBASE*6 (Multi-Regional Environmentally Extended Supply-Use Table and Input-Output Table), covering all economic activities across national borders. Based on the findings, processes with a significant trade volume of resource inputs (use) and outputs were chosen in all stages from upstream to midstream and downstream, as shown in the chart from the previous page. Finally, referencing the Science Based Targets Network (SBTN) guidelines, we identified "manufacturing of parts made from rubber, metal and other materials" in the upstream stage, and "vehicle manufacturing" in the midstream stage as processes fundamental to the relationship with nature.

*6 EXIOBASE: A global, detailed multi-regional economic database that includes environmental data, containing the resource inputs and outputs of each sector.

• STEP 4: Evaluate-Identifying Priority Areas

At the Evaluate stage, we selected major businesses from our insurance underwriting and investment and financing portfolios for analysis that belong to the automobile manufacturing industry identified at STEP 3 and that have processes in the value chain identified at the Locate stage. Areas where high nature-related risks were identified as follows.

The results of analysis in "identifying high dependencies and impacts in material sectors" carried out at STEP 2 indicate that our portfolios have high dependencies and impacts on GHG emissions, water and land. GHG emissions were excluded from our analysis because engagement is already underway to carry out analyses among insurance customers and investment and financing recipients aimed at reducing GHG emissions. We thus focused on water and land instead. Specifically, we analyzed the following sites, using the Aqueduct*7 tools that enable the assessment of the dependencies and impacts on water and the WWF Risk Filter Suite tools*8, which enable an assessment of dependencies and impacts on land and biodiversity.

Sites subject to analysis*9

• Manufacturing sites of 10 automobile manufacturers (140 in Japan and 334 overseas)

• Traction battery manufacturing sites and R&D facilities of 10 automobile manufacturers (29 in Japan and 35 overseas)

• Manufacturing sites of 5 tire manufacturers (64 in Japan and 76 overseas)

• Manufacturing sites of 5 battery manufacturers (20 in Japan and 313 overseas)

The analysis using the Aqueduct tools revealed that 158 sites of automobile manufacturers (primarily in Thailand, China and the United States), 67 sites of tire manufacturers (primarily in Thailand, the United States, China and India) and 20 sites of traction battery manufacturers (primarily in China, the United States, Japan and Germany) were located in areas with either extremely high or high water risks. We also analyzed the dependencies and impacts on land and biodiversity in these areas using the WWF Risk Filter Suite tools and identified risks and opportunities at the Assess stage in STEP 4.

*7 Aqueduct: Water risk assessment tools developed by the World Resources Institute (WRI)

*8 WWF Risk Filter Suite: Risk assessment tools developed by the World Wide Fund for Nature (WWF). It consists of the Biodiversity Risk Filter used to assess biodiversity risks and the Water Risk Filter designed for water risks, allowing comprehensive analysis of risks including biodiversity, water and soil.

*9 Only manufacturing sites and R&D facilities are included. Sales offices are excluded.

• STEP 4: Assess-Identifying Risks and Opportunities in the Priority Areas

  At the Assess stage, we selected from the businesses identified at the Evaluate stage and carried out additional analyses of six leading firms while considering the aspect of engagement: two automobile manufacturers, two tire manufacturers and two battery manufacturers. We then identified the nature-related risks and opportunities of their sites and facilities located in the priority areas, based on the analysis results obtained using the WWF Risk Filter Suite tools and information published by the manufacturers (see the table on the next page).

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• Physical risks: Water stress as well as the risk of tropical depression, such as cyclones, and extreme heat were found to be high in the priority areas. It also revealed that their production activities, which rely heavily on water resources, may be negatively impacted by the depletion of freshwater and an impact on ecosystem services.

• Transition risks: Pollution and reputation risks were identified at almost all target companies. More stringent regulations and a rising public awareness on the environment may negatively impact corporate trust and fund procurement.

• Business opportunities: The progress of electric vehicles was found to create opportunities, including improvements in technology and water reuse, for automobile and battery manufacturers. Specifically, resource conservation may be achieved through greater resource efficiency and cost reduction through the effective use and/or reuse of water resources.

We also carried out biome analyses*10 on the manufacturing sites of each manufacturer. The findings confirmed that many manufacturing sites were located close to rivers, revealing the importance of water resources. When water stress is high in these areas, it is necessary for these manufacturers to be vigilant about the possibility of reduced productivity caused by changes

• STEP 4: Prepare-Future Response

We intend to use nature-related risks and opportunities identified in the operations of leading automobile manufacturers to engage with insurance customers and investment and financing recipients. We will assist our corporate customers' business continuity against natural disasters, such as floods, typhoons and hurricanes, by providing insurance products and solutions. We will also support them through consulting services as they shift toward nature-positive management. Moreover, in our efforts to capture business opportunities, we will strive to help the automobile industry's efforts to develop technologies associated with electrification of vehicles through insurance and financing. These initiatives are aimed at developing business models that will lead to new mobility solutions and the transition to a circular economy.

Specific measures against the nature-related risks and opportunities we have identified will be discussed at and reported to the Sustainability Committee on a regular basis to support our efforts to become "nature positive" in 2030.

Risks and opportunities identified in the value chains of leading automobile manufacturers

in river flow and water quality as well as the environmental impact of water intake and discharge. For example, the analysis results have revealed that the majority of leading automobile and tire manufacturers have sites by the Gulf of Thailand where mangrove trees grow, indicating the possibility of mangrove planting and restoration to address these issues.

Geographical relationship between mangrove habitats and the manufacturing sites of automobile and tire manufacturers by the Gulf of Thailand ©ESRI Japan

Manufacturing sites Mangrove habitats

See "Managing Climate Change and Nature-Related Risk Based on Enterprise Risk Management (ERM)" on page 49 and "Appendix 2: Nature-related Risks and their Transmission Channels in the Automobile Manufacturing Industry" on page 60.

*10 Biome analysis: Biome (such as rainforest) is a grouping of terrestrial ecosystems. The classification of biomes developed by the International Union for Conservation of Nature (IUCN) was used for the analysis. Representative biomes, where a large number of sites and facilities selected for analysis are located, were chosen and analyzed.

Climate ＆ Nature REPORT 2025 27

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Tokio Marine Group's Approach to Climate Change and Nature-related Challenges

‌Location map of risks in the automobile manufacturing sector in our portfolio

Priority areas where manufacturing sites of many automobile, battery and tire manufacturers are located Priority areas where manufacturing sites of some manufacturers are located

Mexico Spain China Thailand Japan

❻ Initiatives of Tokio Marine Group

Tokio Marine Group assumes the roles of an insurance company, institutional investor, asset manager, global company and good corporate citizen. In every role, we are promoting the creation of a safe, secure and sustainable future to protect our customers and local communities in times of need even 100 years from now.

Initiatives as an Insurance Company

(Providing Solutions through Insurance Products and Services)

Tokio Marine Group supports customers' efforts to realize a decarbonized society and a society in harmony with nature by providing solutions through its insurance products and services.

Tokio Marine & Nichido has established the GX Office, an organization dedicated to green transformation (GX), within the Marketing Strategy Department and has been focusing on the development and provision of insurance products and solutions aimed at realizing a decarbonized society. Specific offerings include insurance to assist renewable energy operators, insurance covering flood disaster risks, and risk advisory services to clean energy developers. In addition, we assist companies in formulating and implementing carbon-neutral business strategies. Globally, the GX Project was launched to share information and promote initiatives in the decarbonization field, promoting possible collaboration and exploring business expansion opportunities among the Group companies. To offer greater value, we launched the new Tokio Marine GX project in May 2025. GCube, a Group company and a global leading player specializing in

• Water availability

• Wildfires

• Cyclones

• Pollution

• Water stress (physical) • Extreme heat

  • Water stress (physical)

  • Reputation (water)

  • Atmospheric conditions

  • Cyclones

  • Pollution

• Extreme heat

• Water stress (physical)

• Atmospheric conditions

• Cyclones

• Pollution

• Wildfires

• Water availability

• Landslides

• Pollution

• Wild flora and fauna

• Cyclones

underwriting insurance for renewable energy operators, will take the lead in implementing GX initiatives. We will make concerted efforts across the Group to research and develop insurance products and risk consulting services that help them manage risks associated with new technologies.

In realizing a society in harmony with nature, we are developing and providing services that will help resolve customers' nature-related issues. Specifically, Tokio Marine & Nichido offers several products,

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Metrics and Targets

such as soil decontamination costs insurance, to compensate for the costs of cleaning up soil pollution exceeding the Ministry of the Environment's standards. Another example is aquaculture insurance for fish farming being promoted by the Japanese government to counter a decline in marine resources, such as salmon, tuna and mackerel, and ensure their stable supplies. Moreover, Tokio Marine & Nichido has been striving for the transition to a circular economy. The concept regards products and raw materials that are otherwise discarded as new resources, which are reused without generating waste. As a global non-life insurance company, it exercises its strength of being able to collect various accident-related information and works together with partner companies to engage in initiatives such as reducing food loss and waste and promoting recovery and reuse of automotive parts.

[Insurance and Services to Promote the Spread of Renewable Energy]

There is momentum toward decarbonization worldwide and a shift to renewable energy in major countries for a more efficient electricity supply. In building and expanding of renewable energy power generation plants, insurance is indispensable as project financing will not be extended without insurance.

In 2020, Tokio Marine Group acquired GCube. The company launched its business in the 1990s when the renewable energy market was still in the early stage and there was not much demand for insurance. Currently, having eight out of the 10 world's leading renewable energy operators

as its customers, GCube supports more than 2,000 projects in 38 countries, with its written premiums amounting to USD152 million in 2024.

Excellent underwriting capabilities and superior claims service capabilities are essential in underwriting insurance for renewable energy power plants.

GCube performs appropriate risk assessment and calculates insurance premiums based on a vast amount of loss data accumulated over 30 years since its foundation. An underwriting decision is made while considering factors such as the location of the power plant, the structural type of its foundation, equipment used by contractors and contracts with suppliers and contractors. Evaluating these factors requires a high level of expertise. GCube has made more than 4,000 claim payments since 2011, and its specialized adjusters (loss appraisers) give advice on loss prevention based on accident statistics.

Moreover, GCube strives to further enhance its underwriting capabilities by quantifying risks according to the service life and usage conditions of each equipment. The company also provides advisory services to customer operators, such as advising them on the conditions of insurance policies (setting an appropriate amount of deductible, etc.) according to each risk based on these quantified risks.

VERTICAL LIMIT

When is bigger not better in offshore wind's race to scale?

Q2 2023 Report

The average size of individual claims has increased over the past 10 years

In line with the data in figure claims to work their way through 4, the average cost of offshore the system.

wind claims has increased

substantially, up from 1million It's important to note, however, GBP in 2012 to over 7million that while the average size loss GBP in 2021 - demonstrating continues to increase, a small a notable increase in risk number of large losses have

for insurers, developers, and exacerbated the sharp increase. manufacturers across the sector. There are number of factors that

have contributed to the rise in The slight decrease in average average loss size, which include claims size (GBP) between 2021 an uptick across several root and 2022 can be accounted causes, including:

for by the 2-3 years it takes for

A high-level cost comparison of 8000000

individual major components

on 3MW machines vs. 8MW 7000000

machines is represented in 6000000

figure 5. A general rule of thumb

is that repair costs increase by 5000000

roughly 1 million (EURO) per MW. 4000000

So, as turbines get larger their

3000000

cost roughly increase in a linear

fashion. However, figure 5 does 2000000

that affect repair costs, including: 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

not consider important variables

1000000

Figure 4: Average loss size (GBP) vs. time (year)

• The time of year: winter vs. summer

  repairs 3MW 8MW Element

  Blades per blade

• Availability of vessels % EUR EUR Blades per blade

  Blades 24% 720,000 1,920,000 Blades per blade

• Construction All Nacelle 46% 1,380,000 3,680,000

  Risks (CAR) and Top section 3% 90,000 240,000 Top section

  Operational All Risks Mid section 7% 210,000 560,000

  (OAR) Mid section

  Bottom section 5% 150,000 400,000

• Wind turbine location PCM 8% 240,000 640,000

  BoM 8% 240,000 640,000 Bottom section

• Consequential

  100% 3,000,000 8,000,000

  damage BoM rest

• One off installation or Figure 5: Component cost comparison, 3MW vs. 8MW

entire wind farm

Larger wind farms, which are to repair and replace and have being built further offshore, also larger business interruption (BI) represent much larger Total values associated with them Insured Values (TIVs). Larger - therefore contributing to an turbines and components, by increasing share of losses across their very nature, are costlier the sector.

22

GCUBE Q2 2023 - VERTICAL LIMIT

2. CLAIMS ANALYSIS

23

Report created by GCube

1

Governance

2

Strategies

3

Risk and Impact Management

4

Metrics and Targets

[Insurance and Services to Support Offshore Wind Power Generation]

Tokio Marine & Nichido has been underwriting insurance for offshore wind power generation projects across the world since 2013 when they were not yet widely known in Japan. The company is now regarded as one of the major international players in this field.

Offshore wind power generation projects, which require large-

scale investment, often entail project financing and involve various parties, including the manufacturer of windmills and other contractors. Thus, an insurance package exclusively designed for such projects plays a crucial role. Such an insurance package offers comprehensive and seamless total support in order to cover a variety of risks faced by each party involved in constructing and operating wind farms. As a managing underwriter, Tokio Marine & Nichido offers globally competitive coverage in its insurance package. Contracts related to such projects vary by country or region. Thus, Tokio Marine & Nichido's insurance policy has been adjusted to their respective conditions to provide appropriate risk coverage. As for risks

As offshore projects require preparations for typhoons and other natural disaster risks and pose greater challenges than land projects, we have made a range of efforts to counter these challenges. Given that Japan faces many natural disasters, we have built a risk model specific to the country through industry-academia collaboration with the Nippon Kaiji Kyokai (known as ClassNK) and Kyoto University.

Additionally, we have formulated the Guidelines for Marine Warranty Survey in Japan by applying our experiences in offshore wind power generation projects in Europe and modifying a marine warranty survey, which is common in Europe, to match the actual state of construction and other related contractors and weather conditions in Japan.

At Tokio Marine & Nichido, premiums related to offshore wind power generation increased by about 2.7 billion yen from fiscal 2020 to fiscal 2024. The number of projects is expected to increase further, and we anticipate continued, sharp market growth both in and outside Japan.

Global

600

（GW）

400

24-fold

200

23

0

2018

2040

Japan

100

（GW）

90

180-fold

30〜45

50

15〜20

10

0.5

0

2022 2030 2035 2040 2050

Electricity generated by offshore wind power

specific to Japan, the company has been actively promoting initiatives that harness its knowledge of maritime risks, which has been accumulated through its long history and tradition of providing hull and cargo insurance, and the experiences of underwriting insurance for marine development projects.

Determine various risks involved in each phase and create insurance package providing necessary coverage at a price reflecting the risks

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Source: Vision for Offshore Wind Power Industry (1st Draft), materials from the Japan Wind Power Association and partially surveyed by Tokio Marine Holdings