November 20, 2007
Millea Holdings, Inc.
President: Shuzo Sumi
TSE code number: 8766
FY 2007 forecast of business results and revisions to the medium-term business plan (adjusted earnings basis)
Millea Holdings, Inc. (the "Company") (President and Director: Shuzo Sumi) announced today the forecast of its business results on an adjusted earnings basis for the fiscal year ending March 31, 2008 ("FY 2007"), and revisions to the target indices of the Company's medium-term business plan (Stage Expansion 2008) (the "Business Plan") for the final fiscal year covered by the Business Plan ("FY 2008").
1. FY 2007 forecast of business results
The Company expects adjusted earnings of ￥164.1 billion for the fiscal year ending March 31, 2008, which is an increase of ￥7.7 billion when compared to the Business Plan. The details of FY 2007 forecasts of business results for major business segments are described in the following.
In the domestic property and casualty insurance business, insurance payments incurred due to natural disasters are expected to decrease and proceeds from interest and dividends on securities are expected to increase, while net premiums written are expected to decrease as compared with the Business Plan due to greater efforts to improve business quality and to restore customer confidence being given higher priority. On balance, an increase of ￥18.1 billion in adjusted earnings when compared to the Business Plan is expected. Meanwhile, in the domestic life insurance business, a decrease of ￥3.9 billion in adjusted earnings when compared to the Business Plan is expected due to an expected decrease in the number of new policies written resulting from increased competition, especially in the variable annuity insurance business. In the overseas insurance business, a decrease of ￥2.5 billion in adjusted earnings when compared to the Business Plan is expected due to a projected decline in earnings in some regions.
2. Revisions to the Business Plan (for FY2006 to FY2008)
Although the fundamental strategy of the Business Plan remains the same, the Company made downward revisions to the Business Plan for FY 2008 to target ￥170 billion in total adjusted earnings and a ROE of approximately 4%, based on changes in the relevant business environment. The main reasons for such revisions include higher priority continually being placed on efforts to develop proper business operations in the domestic property and casualty insurance business and the recording of temporary expenses in FY 2008 due to changes in the schedule of the Business Renovation Project of Tokio Marine & Nichido to begin in FY 2008.
* In order to capture the corporate value of the Millea Group and to aim for the
enhancement thereof, the management uses "adjusted earnings" to determine
adjusted income and adjusted ROE (see Appendix 2 for details).
* Overhead costs for overseas operations are charged to the overseas insurance
* See Appendix 1 for business performance indices for each major business segment.
Business performance indices for major business segments
1. Domestic property and casualty insurance business
Indices for Tokio Marine & Nichido and Nisshin Fire are as follows:
2. Domestic life insurance business
Indices for Tokio Marine & Nichido Life and Tokio Marine & Nichido Financial Life are as follows:
* Annualized premiums for new policies are derived by dividing the aggregate amount
of premiums (lump-sum premiums for single payment policies) by the duration of
insurance policies to show the amount of premiums per year.
3. Overseas insurance business
Indices for the overseas insurance business are as follows:
* Net premiums written are calculated taking into account the ratio of the respective
equity interest of the Company in each local subsidiary.
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