Millea Holdings, Inc.
President: Kunio Ishihara
TSE code number: 8766
Millea Holdings, Inc. ("Millea Holdings", President and director: Kunio Ishihara) announced today a revision to its business plan, originally announced on May 24, 2006, for the fiscal year ending March 31, 2007 ("FY2006") to target 167.9 billion yen in total adjusted earnings.
In the domestic property and casualty insurance business, Millea Group is experiencing a steady growth in the amount of net premiums written. However, it made a downward revision of its target for adjusted earnings to 92.3 billion yen primarily due to an increase in the amount of claims and loss reserves incurred in connection with natural disasters.
Boosted by strong sales of variable annuity insurance, Millea Group revised its target for adjusted earnings in the domestic life insurance business to target 51.6 billion yen.
Millea Group aims to earn 21 billion yen in adjusted earnings in the overseas insurance business, in light of a favorable business result in the reinsurance business.
In financial and other businesses, Millea Group aims to earn 2.9 billion yen in adjusted earnings, almost unchanged from the amount announced in the initial business plan.
(Yen in billions except percentages)
| Adjusted Earnings by Business Segment | FY2005 Actual Results | FY2006 Business Plan | FY2006 Revised Plan |
| Domestic property & casualty insurance | 91.5 | 104.0 | 92.3 |
| | Tokio Marine & Nichido | 90.8 | 102.3 | 91.2 |
| Nisshin Fire | 0.7 | 1.6 | 1.0 |
| Domestic life insurance | 34.6 | 39.8 | 51.6 |
| | Tokio Marine & Nichido Life | 29.4 | 26.8 | 25.2 |
| Tokio Marine & Nichido Financial Life | 5.2 | 13.0 | 26.3 |
| Overseas insurance | 7.7 | 19.0 | 21.0 |
| | Asia | 1.3 | 1.3 | 1.5 |
| North/Central America | 5.1 | 5.2 | 5.0 |
| Europe, Africa, Middle East | 2.7 | 1.5 | 1.5 |
| South America | 3.3 | 4.2 | 4.4 |
| Others | 1.2 | 1.4 | 1.3 |
| Reinsurance | -5.2 | 6.3 | 7.9 |
| Financial/other businesses | 4.9 | 2.8 | 2.9 |
| Group total | 138.7 | 165.5 | 167.9 |
| Group total ROE | 3.7% | 3.9% | 4.0% |
* 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).
* The actual results of FY2005 in the domestic life insurance business exclude the effects of changes in key assumptions such as interest rate fluctuations and the frequency of claims.
* Overhead costs for overseas operations are charged to the overseas insurance business.
* See Appendix 1 for business performance indices for each major business segment.
Appendix 1
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:
(Yen in billions except percentages)
| | FY2005 Actual Results | FY2006 Business plan | FY2006 Revised Plan |
| Net premium written | 2,037.3 | 2,067.0 | 2,069.0 |
| | Tokio Marine & Nichido | 1,892.7 | 1,920.0 | 1,922.0 |
| Nisshin Fire | 144.6 | 147.0 | 147.0 |
| Expense ratio | - | - | - |
| | Tokio Marine & Nichido | 30.2% | 30.6% | 30.9% |
| Nisshin Fire | 36.5% | 36.2% | 36.4% |
2. Domestic life insurance business
Indices for Tokio Marine & Nichido Life and Tokio Marine & Nichido Financial Life are as follows:
(Yen in billions)
| | FY2005 Actual Results | FY2006 Business Plan | FY2006 Revised Plan |
| Annualized premiums for new policies | 88.4 | 115.6 | 186.6 |
| | Tokio Marine & Nichido Life | 45.6 | 55.6 | 54.8 |
| Tokio Marine & Nichido Financial Life | 42.8 | 60.0 | 131.7 |
* 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:
(Yen in billions)
| | FY2005 Actual Results | FY2006 Business Plan | FY2006 Revised Plan |
| Net premiums written | 240.2 | 284.5 | 307.6 |
| | Asia | 47.1 | 70.2 | 71.1 |
| North/Central America | 52.3 | 56.7 | 55.4 |
| Europe, Africa, Middle East | 13.5 | 17.1 | 17.5 |
| South America | 87.3 | 96.3 | 101.3 |
| Others | 6.9 | 8.8 | 8.6 |
| Reinsurance | 32.9 | 35.4 | 53.4 |
* Net premiums written are calculated taking into account the ratio of respective equity interest of Millea Holdings in each local subsidiary.
