Global economy in the first half of FY2012 saw a recession in Europe where sovereign debt problems were smoldering, while a moderate recovery continued in the U.S. Japanese economy showed weak movements due to a decline in production and export amid the downturn in the global economy.
Under these circumstances, Tokio Marine Group started a three-year mid-term business plan "Innovation and Execution 2014" this fiscal year, with a vision of becoming the global insurance group which sustains growth by offering quality that customers select.
Under this plan, we aim for profit growth by sustainable growth of each business. In addition, we will further promote our ERM (or Enterprise Risk Management) mainly by strengthening risk controls for natural catastrophes, continuing sales of business-related equities, and investing in businesses with high profitability. Through these efforts, we strive to expand profit and improve capital efficiency while maintaining the Group's strength of financial soundness.
【Mid-Term Business Plan "Innovation and Execution 2014" Overview】
<Overview of Our Business Development in 1H FY2012>
Domestic Property and Casualty Insurance Business
Tokio Marine & Nichido has been working on the "Business Renovation Project" to improve its IT infrastructure for streamlining operation processes.
By reducing internal processes and improving productivity, this initiative enables the Company to allocate more time to strengthen customer contacts including the expansion of sales networks, which resulted in the achievement of further growth. Sales tie-up with Meiji Yasuda Life Insurance Company mainly for sales of auto insurance is one of the measures to strengthen the Company's sales networks, which contributed to the achievement of industry-leading premium growth.
"One-day auto insurance", a new product launched by the Company in January 2012, covered more than 200 thousand days in total by the end of September. Approximately ninety percent of the policyholders are in their teens and 20s. Establishing customer contacts with these young-adults through the sales of this product leads to prospective sales expansion of auto insurance. Furthermore, with this new product, the Company aims to help reduce the number of accidents involving uninsured drivers by increasing the percentage of insured young drivers, which should help auto accident victims obtain better care.
Also, the Company introduced a new paperless system this April for completing insurance contract procedures by utilizing pc tablets and other mobile devices. This system is aimed at making insurance contract procedures easier to understand and faster to complete for customers, as well as helping to reduce usage of paper resources.
Domestic Life Insurance Business
Tokio Marine & Nichido Life has maintained growth by developing products and services that meet customer needs, and providing these products through various sales channels, as well as promoting an integration of life and non-life sales approach with Tokio Marine & Nichido.
Products such as "Medical Kit" insurance with a new rider covering inability-to-work risks, and "Medical Kit Love" lenient-underwriting medical insurance are well received by customers. Furthermore, the Company strengthened its integrated life and non-life sales approach by making arrangements to include the above new products in the products lineup for "Super Insurance."
International Insurance Business
Tokio Marine Group is actively developing its international insurance business with the aim of global growth and risk diversification.
Philadelphia, a U.S. property and casualty insurance group, showed steady growth through promoting measures including continuous development of new products and upward rate revisions for renewal policies. Kiln, a U.K. insurance group, expanded underwriting in property and marine, and implemented upward rate revisions for its reinsurance business. As for reinsurance business, Tokio Millennium Re Limited enhanced its business base by expanding reinsurance underwriting for risks other than natural disasters. In addition, the Delphi acquisition which was announced in December 2011, completed in May 2012 and management integration is under way aiming for growth. Delphi's financial results will be reflected in our consolidated financial results from 3Q FY2012.
In emerging markets, Tokio Marine & Nichido Fire Insurance Company (China) Limited opened its Beijing branch, the fourth branch in China aiming for expanding its business base and improving customer services in the country. Also, in September 2012, Tokio Marine Insurans (Malaysia) Berhad took over the non-life insurance business from MUI Continental Insurance Berhad, a non-life insurance company in Malaysia, to achieve growth opportunity in the country.
Tokio Marine Group achieved “carbon neutral” status in the previous fiscal year for the first time. Following the efforts made last year, we are continuously working this fiscal year to protect the global environment by undertaking various initiatives including the Mangrove Planting Project and energy saving efforts in our business.
Tokio Marine & Nichido is working to reduce environmental impact through its Green Gift project. Also, the Company is continuously taking part in various volunteer activities including the Sanriku Cultural Recovery Project, in which volunteers from the Company clean and repair cultural properties, books and documents damaged by the Great East Japan Earthquake.
1H FY2012 Consolidated Business Results and FY2012 Full Year Projections
Interim consolidated business results are shown in the table below. The results are mainly due to 1) incurred losses relating to domestic natural catastrophes remaining at a high level similar to last year due to large typhoons including the massive low pressure in April and Typhoon Jelawat, and 2) an increase in impairment losses on securities due to financial market deterioration.
(Yen in billions, except for %)
Ordinary income and ordinary profit for each business segment are as follows:
(Yen in billions, except for %)
As for the full-year projections, net premiums written in FY2012 is projected to be 2,480 billion yen, a significant increase by more than 150 billion yen YoY, owing to favorable sales growth in domestic and international insurance businesses. Net income is also expected to increase significantly YoY to 90 billion yen.
Total dividends for FY2012 are projected to be 55 yen per share, in line with the original projections at the beginning of the fiscal year. Interim dividend is 27.5 yen per share, a YoY increase by 2.5 yen. Year-end dividend is also projected to be 27.5 yen per share, a YoY increase by 2.5 yen.
Under our management philosophy to place "customer trust at the base of all its activities," Tokio Marine Group will endeavor to achieve further growth as the corporate group seeking growth characterized by high profitability, sustainability, and soundness.