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Message from the President

We aim to be a company that plays an important role in society, a “Good Company”. Through continuous group effort, we will strive to be recognized as such by all of
our stakeholders now and for the next 100 years.

Delivering Safety and Security to Our Customers around the World

Guided by our corporate philosophy of ‘placing customer trust as the base of all of our activities and continuously working to increase the corporate value’, we have been working to realize the long term vision ‘to be a global insurance group that delivers safety and security to customers worldwide and sustains growth – our timeless endeavor to be a Good Company now and for the next 100 years’. When I talk about ‘Good Company’, I mean a company that provides value to our customers and society by being there in their times of need. It is by delivering on this commitment that we will earn the trust of stakeholders and will simultaneously, as an outcome, further develop corporate value.
As a company, it is important that we don’t simply chase short-term profits. The purpose we exist as an insurance company is to support our customers and society when they need. By doing business the right way and earning trust, profit will follow. Profit is in many ways a barometer of how well we are earning the trust of society. With this purpose in mind, our principal focus is on meeting the expectation of customers and society, therefore success is a result that follows. We consider this cycle based on building customer trust first to be of critical importance.
In ‘To Be a Good Company’ the phrase ‘To Be’ is most important as it represents an endless journey, it does not have a set goal. In a race, the finish line is where you stop, and your momentum and speed is gone. ‘Good Company’ does not have an endpoint and shows our approach to always continue to improve and strive to do more for our customers.

Realizing the Long Term Vision

The Tokio Marine Group Value Creation Process was created to allow us to achieve the long-term vision of our organization.
Since it was founded in 1879 the Tokio Marine Group has always placed customers trust at the center of all its activities. From the Great Kanto Earthquake to the more recent Great East Japan Earthquake or any of the other challenging events that affect our customers, we have always stood by their side through the bad times and been there to support their new challenges through innovation.
Since our foundation we have worked internationally to support our clients. When there were under a thousand cars in Japan, we launched the first car insurance. When deregulation in 1996 allowed Non-life companies to enter the Life Insurance market, we did. In 2002 to protect our clients with both Life and Non-Life coverage, we developed the first integrated insurance product: ‘super insurance’.
It is through new initiatives and innovations like these that we have been able to earn customer trust. And it is this trust that has enabled us to deliver sustainable growth, a balanced global portfolio and a strong financial base. All of this has been built on the fact that our employees have the mindset, as well as the will, to be there for our customers in their time of need.
In recent years we have seen increasingly volatility in terms of climate, natural disasters, demographic and socioeconomic changes. To work on these changes the UN developed Sustainable Development Goals (SDGs). To be able to handle and respond to all of these challenges our business will also need to become increasingly agile.
Insurance is a people’s business. In these volatile times, to ensure they are there for our customers, we need to empower all of our diverse employees around the world to work with passion and feel the importance of the work that they do. While embracing this diversity and working as a global team we need a common thread that can bring us all together. For us, that is our core identity; To Be a Good Company.
Working under the core identity of ‘To Be a Good Company’ we can have an engaged and united workforce, that will help us advance our corporate strategy and aligned group management and have a high level of transparency over the group. With these things we will be better placed to serve customers, earn trust and deliver the results to our shareholders. This positive cycle is the driver of our success so we need to ensure we provide our employees with an environment where they can perform and prosper. I feel creating this environment is one of my most important jobs. If we can continue to turn value created into strength we will be able to raise our corporate value and continue the positive cycle. This is our ‘Value Creation Process’.

A Key Period to Realize the Future Vision of the Group

To understand our current situation, let me begin with a brief look at recent history.
In order to deliver safety and security to customers around the world, the Tokio Marine Group entered the life market in 1996, actively pursued overseas growth from 2000 and has also worked to develop and grow the domestic non-life business. In 2017 we experienced once-in-a-generation hurricane events in North America, but due to our diversification we managed to keep its impact to just 15% of earnings for the year.
When we were putting the mid-term plan together, we took a step back to try to forecast the big environmental changes the group will be experiencing and think about what we should be trying to achieve in such a world. In the insurance industry we are starting to experience an unprecedented rate of change. While this presents a threat to our core business it also presents us with opportunity. New technology will enable people to live safer lives but will come with new emerging risks which will create new insurance needs.
The key for us then is to be able turn the changes to opportunities. To achieve this we have identified the ‘4 States’ that will allow us to take advantages of opportunities to continue our current direction of growth. The ‘4 States’ can be captured in the following statement: Built on a ‘Global Business Platform’ we will have an ‘Optimized Portfolio’, ‘Strong Group Synergy’ and ‘Lean Management Structure’ that will create superior competitiveness.
If we are able to achieve these states then we should be able to deliver double figure ROE. This ability to deliver steady profits combined with our capital efficiency will allow us to give greater returns to our shareholders. In figures that means we would like to deliver adjusted net income over 5,000 billion yen and adjusted ROE of 12%.

Future Group Vision

Optimized Portfolio We would like to ensure growth in key markets such as emerging countries as well as specialty and medical insurance. We will also need to stably deliver those results through the appropriate diversification of products, geographies and business lines.
Strong Group Synergy With the advancement of aligned group management we hope to maximize the level of group synergy and to reinforce the local businesses in order to deliver even higher results.
Lean Management Structure We aim to create a lean and nimble management team that is agile and efficiently deliver results across our global business platform.
Global Business Platform With ‘To Be a Good Company’ as our core vision, while leveraging our global talent around the world, we will create an executive team that is able to strengthen and support our businesses around the world.

The new mid-term plan starting in 2018 will be a very important step for the realization of the future state of the group. During the next three years we believe the environment will remain tough with an ongoing high frequency of natural catastrophes and low interest rates in Japan. However, even in this environment, we will continue with changes necessary for growth and this is the core theme of this new mid-term plan.

Finally, please let me restate our commitment to work together as a group to be there for our customers and to deliver on the commitments I have described here.
We will continue to work to raise our corporate value for our shareholders and all stakeholders, and I ask for your continued support on this journey.

Thank you,

July 2018

Tokio Marine Holdings, Inc.
Group CEO (Group Chief Executive Officer)