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  5. Review of the Previous Mid-Term Business Plan—“To Be a Good Company 2017”

Review of the Previous Mid-Term Business Plan—“To Be a Good Company 2017”

Under the previous mid-term business plan—“To Be a Good Company 2017”—we advanced initiatives based on the three pillars of “sustainable profit growth,” “enhance capital efficiency,” and “enhance shareholder return.” Sustainable profit growth was achieved through steady organic growth in all businesses, the acquisition of TMHCC, and the exercise of Group synergies. At the same time, we were able to improve our risk portfolio through the continuous sale of business-related equities while enhancing capital efficiency through flexible share repurchase.

As a result, adjusted net income in fiscal 2017 came to 397.0 billion yen and adjusted return on equity (ROE) was 10.0% when excluding the impacts of natural catastrophes, FX effects, and other temporary factors. We were thereby able to achieve performance in line with our initial targets, which were adjusted net income of approximately 400.0 billion yen and adjusted ROE in the upper 9.0% range.

As for shareholder return, we chose to issue an annual dividend of 160 yen per share for fiscal 2017, making for an increase of 20 yen per share above the previous fiscal year and our sixth consecutive year of higher dividend payments. Also during the fiscal year, we made the decision to acquire 150.0 billion yen worth of share repurchases. The total amount of share repurchases acquired over the three-year period of “To Be a Good Company 2017” was 200.0 billion yen.

Overall, my evaluation of the past three years under the previous mid-term business plan is that we were able to increase the Group’s “earnings capacity” and realize ongoing improvements in corporate value, as indicated by the aforementioned achievements.

Review of the Previous Mid-Term Business Plan / Sustainable profit growth Target Adjusted net income: Approx. ¥400 billion / Adjusted Net Income 2014 298.1 billions of yen 2017 397.0 billions of yen +98.9 billions of yen / Enhance capital efficiency Target Adjusted ROE Upper 9% range / Adjusted ROE 2014 7.6% 2017 10.0% +2.4pt / Adjusted net income: Net incurred losses relating to natural catastrophe losses are normalized to an average annual level. In addition, as for 2017, excluding the FX effects and one time impact of U.S. Tax Reform / Adjusted net assets: Adjusted to the market condition of Mar. 31, 2015 (USD/JPY exchange rate: ¥120.17, Nikkei stock average: ¥19,206) / Enhance shareholder return Target Steady growth of dividends in line with profit growth / Annual Dividend Per Share 2014 95Yen 2017 160Yen +65Yen Share repurchases* FY2016 ¥50.0 billion FY2017: ¥150.0 billion (maximum) / *Total amount approved by the announcement date of full-year financial results of respective years

The total shareholder return (TSR), which represents capital return after reinvesting dividends, was 3.1 times on March 31, 2018, when compared with that at the time of Tokio Marine Holdings’ establishment. With this figure, we are greatly outperforming the Tokyo Stock Price Index (TOPIX), and shareholder value continues to rise steadily when viewed from a long-term perspective.

Transition of Total Shareholder Return* *Total Shareholder Return (TSR): Capital return after reinvesting dividends Stock price indexed at 100 on April 1, 2002 / As of March 31, 2018 / TOKIOMARINE 312 / TOPIX 215 / Source: Bloomberg