Mid-Term Business Plan (Released in May 2018)

Tokio Marine Group aims to be a global insurance group that delivers sustainable growth by providing safety and security to customers worldwide based on our corporate philosophy, "With customer trust as the foundation for all its activities".
We would like to introduce our Mid-Term Business Plan, "To Be a Good Company 2020", which commenced in FY2018.

May 25, 2018
IR Conference for New Mid-Term Business Plan, "To Be a Good Company 2020"


For outlook (update) of FY2020 target, please refer to FY2018 IR Conference for New Mid-Term Business Plan released in May. 25, 2018.

The Mid-Term Business Plan “To Be a Good Company 2020”

Future Vision for the Group

In the insurance industry we are starting to experience an unprecedented rate of change such as social structure changes, serious natural disasters, and technology advancements. Even under these environment, we will take advantage of our strengths and turn the changes into opportunities.
If we are able to achieve the 4 key elements in the Future Group Vision, then we should be able to deliver double figure ROE and give greater returns to our shareholders. The 4 key elements can be captured in the following statement: Built on a ‘Global Business Platform’ we will have an ‘Optimum Portfolio’, ‘Strong Group Synergies’ and ‘Lean Management Structure’ that will create superior competitiveness.

Progress up to 2017 Significant improvement in profitability FY2011: 307 1.3% FY2014: 3,233 8.9% FY2017 Normalized basis: Adjusted net income¥372.0B Adjusted ROE 9.4% FY2020 Target: 3~7% CAGR The priorities ・Further diversification of portfolio ・Enhancement of business structure ・Strengthening aligned group management Mid-Term Business Plan (2018~2020) 「To Be a Good Company 2020」 ・Profit growth through the establishment of earnings base ・Increase in shareholder return level Adjusted ROE 10% or more Adjusted ROE approx.12% Adjusted net income : over ¥500.0B The future Group visions Consistent double-digit ROE High level shareholder return ・Optimum portfolio ・Strong Group synergies ・Lean management structure ・Global business platform

Priorities of the Mid-Term Business Plan

The mid-term business plan represents a crucial step toward realizing the Group future vision.
In order to enhance our business platform towards the future and achieve sustainable growth, we have defined 3 priorities to be addressed; further diversification of portfolio, enhancement of business structure, and strengthening of aligned Group management.

Further diversification of portfolio Geographical / Business diversification ・Achieve growth organically as well as through targeted M&A (emerging markets, primarily Asia, as well as advanced markets) Appropriate risk control ・Appropriately control interest rate risk and natural catastrophe risk along with continuing sales of business-related equities Continue refinement of product portfolio ・Expand specialty insurance in non-life insurance business and protection type products in life insurance business Enhancement of business structure Innovative products and services ・Launching innovative products and services which proactively meet the emerging and evolving needs of customers Enhance and strengthen sales channels ・Strengthen business platform to enhance sales capabilities through creating new customer contacts by using new technology, etc. Increase productivity ・Use new technology and selected integration to realize more efficient business processes Strengthening aligned group management Global synergies ・Leverage the best practices among our group companies to generate synergies on a global basis Leverage and develop global talent ・Promote further talent development across the group and further leverage human resources globally Spread group culture “To Be a Good Company” ・Enhancing a sense of group unity by spreading core identity throughout the group

KPIs of the Mid-Term Business Plan

Under the mid-term business plan, we will continue to enhance corporate value by advancing initiatives based on the 3 pillars of “sustainable profit growth,” “enhance capital efficiency,” and “enhance shareholder return.”
Through these initiatives, we are targeting an average annual growth rate of between 3% and 7% in adjusted net income and an adjusted ROE of over 10%. In terms of shareholders return, we plan to sustainably increase dividends in line with profit growth as well as gradually raise payout ratio to move us toward our Group future vision.

1 Sustainable profit growth / FY2020 Targets*1 Adjusted net income: 3~7% / CAGR*2 FY2018 Projections*1 ¥396.0B / FY2017 Results ¥372.0B (normalized basis*3), 2 Enhance capital efficiency / Adjusted ROE: 10% or more / 9.6% / 9.4% (normalized basis*3), 3 Enhance shareholder return / ・Continuous dividend total increase in accordance with profit growth ・Gradually raise the dividend payout ratio towards the future Group visions / Dividend per share ¥180 (Projections) / Dividend per share ¥160 (Plans)
  • *1: The market environment basis at the end of March 2018 (USD/JPY exchange rate: ¥106.24, Nikkei Stock Average: ¥21,454)
  • *2: CAGR based on the FY2017 Results (Normalized basis*3) ¥372.0B
  • *3: Adjusted net income: Nat-cat losses are normalized to an average annual level and excluding one time impact of U.S. Tax Reform Adjusted net assets: Adjusted the market condition (FX and stock price) to the same level as at the end of March 2018

Enterprise Risk Management (ERM)

We are implementing Enterprise Risk Management (ERM) as our business platform to achieve our mid-term business plan.
Specifically, we will work to achieve sustainable profit growth through the enhancement of our business structure and the fostering of Group synergies. The profits and capital generated in this manner will be dedicated to the efficient deployment of capital, which will entail maintaining financial soundness while further diversifying the portfolio and enhancing shareholder return, for example, as we seek to create the foundations for future growth.

Enterprise Risk Management (ERM) / Sustainable profit growth: Domestic non-life insurance business ・Sustainable growth as the Group core business ・Change our portfolio by sales expansion of specialty insurance. Domestic life insurance business・Expand corporate value based on the economic value as a growth driver contributing to the long-term profit for the Group. ・Increase in protection - type products International insurance business ・Realize high organic growth and implement new business investment as a growth driver of the Group. The Group total ・Generate further synergy effect ・Appropriate control of business expenses / Generate profits / Efficient deployment of capital: Invest for growth ・Invest in new business with diversification effects ・Prior investment to establish future profit base (new products/new technology) Risk reduction/control ・Continuing sales of business - related equities, control of the risk of nat-cat losses and interest rates Shareholder return ・Raise level of shareholder dividend ・Adjustment to the appropriate level of capital via flexible share repurchase, etc. / Strategic capital allocation / Profit growth + Enhancement of shareholder return + Maintain financial soundness