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| The Tokio Marine Group expresses its sincere appreciation to all investors and shareholders for their continuing guidance and support of its business activities. "Innovation and Execution 2011" mid-term corporate strategy To realize sustainable growth for the Tokio Marine Group (the "Group") we need to build a more solid business position where we can further enhance our competitiveness on a global basis while providing products, services and business processes that customers will select for their quality. Our "Innovation and Execution 2011" mid-term corporate strategy, which started in April 2009, sets out our vision of being a "global corporate group maintaining growth by offering quality that customers select". Pursuing this vision, all Group companies are determined to make concerted efforts to swiftly and steadily implement their strategy initiatives. Business overview for the six months ended September 30, 2009 Domestic property and casualty insurance business Tokio Marine & Nichido Fire Insurance Co., Ltd. (“TMNF”) endeavored to increase its competitiveness by pursuing more customer-friendly and reliable business processes and seeking to achieve sustainable growth by offering quality that customers select. TMNF worked on its "Business Renovation Project" initiatives as part of a business transformation project intended to drastically streamline products, back-office work processes and IT systems. TMNF endeavored to move ahead with further enhancement of business efficiency, high-value-added products and services to customers, all aimed at increasing profitability. TMNF also stepped up its efforts to achieve a baseline quality standard called "Anshin Quality", where the quality of its products and services meets customer expectations. Furthermore, to improve the service quality agents offer to customers, TMNF promoted the use of TNet, a new agency system, and offered improved agent support by utilizing "Agent Compass" to help agents assess their managerial issues. In order to strengthen customer contacts, TMNF developed and started operating the "Multi-access" platform that utilizes call centers and websites for insurance solicitation. E. design Insurance Co., Ltd., which TMNF established through a business and capital alliance with NTT FINANCE CORPORTAION, started operations in June 2009. This new company is engaged in selling automobile insurance through mobile networks, including cellular phones, and the internet. Domestic life insurance business Tokio Marine & Nichido Life Insurance Co., Ltd. ("TMN Life") pursued its "Second Inauguration Project" centered on drastic renovation of its overall business operations. In the first half of fiscal 2009, TMN Life stepped up its renovation efforts to substantially reduce costs and further enhance business efficiency while increasing promotional campaigns to gain wider brand and service recognition. To encourage customers to select TMN Life for quality and to continue growing, TMN Life continued to pursue a customer-oriented life insurance business, focusing on developing products that meet the needs of customers. One of the initiatives attributable to such efforts was promotion of medical and cancer insurance products that cover high costs for advanced treatment and anticancer drugs, released in October 2009. In addition, TMN Life has been involved in its "Cancer Prevention Campaign" through which it has sought not only to upgrade existing services associated with products but also to provide cancer-related services such as screening information for early detection of disease and support for post-treatment counseling in tie-ups with local authorities. Tokio Marine & Nichido Financial Life Insurance Co., Ltd. ("TMN Financial Life") has strengthened alliances with financial institutions for over-the-counter sales of variable annuity insurance products at banks and sought to improve its business management through improved risk management. International insurance business Expanding the scale and earnings of Tokio Marine Holdings’ international insurance businesses is a key growth strategy component toward fulfilling the Group’s aim of becoming a global top-tier insurance group. Based on this strategy, we pursued organic growth even while stepping up our M&A initiatives. The Group completed two large strategic acquisitions in 2008 - acquisition of Kiln Group, a U.K. insurance group, and Philadelphia Consolidated Holding Corp., a U.S. property and casualty insurance group. The Group has worked to smoothly integrate those two companies after acquisition and to achieve their on-going business plans. We also pursued synergies by combining the strengths of these new companies with the Group, and achieved favorable growth in their businesses for the first half of fiscal 2009. The Group also focused its attention on emerging markets, including Brazil, Russia and India, China and other parts of Asia, and established business bases in those insurance markets. The Group intends to continue its efforts to increase profitability in those regions as we see them as promising markets in the future. Our international insurance business has undergone substantial change both in size and quality as a result of the recent acquisitions. With these developments, we intend to continue our efforts to further improve our management structure and IT infrastructure. CSR The Group has focused on promoting corporate social responsibility (“CSR”) initiatives in order to contribute to the development of society as a good corporate citizen through its business activities. A top Group priority is addressing climate change and global warming and other environmental issues. TMNF since 1999 has been engaged in a mangrove afforestation project in five countries across Southeast Asia and Fiji Island in the South Pacific. India was added to the scope of TMNF afforestation activities in 2009. Together TMNF plans to plant 2,300 hectares of new forest in these regions in the coming five years. This will total over 8,000 hectares of new forest through TMNF afforestation activities since 1999, equivalent to a forest 100 meters wide stretching from Tokyo to Hiroshima. To support the effort to reduce paper consumption, TMNF in May 2009 started "Web-clauses" for automobile insurance and “Super Insurance”, and actively encourages customers to review policies online instead of in paper form. Business results During the six months ended September 30, 2009, the Japanese economy remained sluggish due to low levels of capital investment and worsened employment and income conditions, despite signs of recovery in production supported by inventory adjustments and increased consumer spending in some areas attributable to government stimulus measures. The Group’s consolidated business results for the six months ended September 30, 2009 were as follows: o Ordinary income of 1,870.8 billion yen, a decrease of 88.3 billion yen over the comparable period in the prior fiscal year. The main components of ordinary income were underwriting income of 1,512.6 billion yen and investment income of 326.2 billion yen. o Ordinary expenses decreased by 178.8 billion yen to 1,766.2 billion yen, of which the main components were 1,433.0 billion yen of underwriting expenses, 52.0 billion yen of investment expenses and 276.3 billion yen of operating and general administrative expenses. o Ordinary profit increased by 90.4 billion yen to 104.6 billion yen. o Net income (comprised of ordinary profit plus extraordinary gains less extraordinary losses, income taxes and deferred income taxes) was 71.2 billion yen, an increase of 53.1 billion yen over the comparable period in the prior fiscal year. With a corporate philosophy of "customer trust as the base of all business activities" the Group is determined to make concerted efforts for further development as a corporate group with high profitability, growth potential and financial soundness. We express our sincere appreciation to all of you for your continuous assistance and support. |
