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

Future Vision for the Group

In creating the new mid-term business plan, we defined four key elements to guide our efforts to link changes in the business environment that affect the insurance industry to business opportunities and thereby achieve future growth.

The first of these elements is to achieve the optimum portfolio. This sees us optimally diversifying risks by geographic region and area of the insurance business and thereby stabilizing Group earnings.

The second element is to realize strong Group synergies. Group companies utilize the strengths and expertise of other Group companies in a reciprocal manner to drive organic growth.

The third is for a lean management structure, by which we mean a flexible management structure free of inefficiencies. By achieving this, we will build a structure that will enable us to generate profit under any environment.

These will be supported by the fourth element: a global business platform. By accomplishing this, we will transform Tokio Marine Group into an organization in which a diverse range of talented individuals are able to exercise their skills in the ideal position united under our core identity as a “Good Company.”

By accomplishing these four elements, we will aim to consistently maintain double-digit ROE and generate exceptional shareholder return. Quantitatively, we will work toward the targets of adjusted net income of over 500 billion yen and adjusted ROE of approximately 12%.

Priorities of the New Mid-Term Business Plan

The new mid-term business plan represents a crucial step toward realizing the future state of the Group. We expect a challenging business environment for Tokio Marine Group arising from larger-scale natural catastrophes, persistently low interest rates, and other factors. Accordingly, we have defined three priorities to be addressed in order to realize the future state of the Group: (1) further diversification of portfolio; (2) enhancement of business structure; and (3) strengthening of aligned Group management.

1. Further Diversification of Portfolio

We have made efforts over the years to diversify our business on a global scale, and the result has been substantial improvement to the balance of our business portfolio. However, we are still in need of further diversification in terms of geographical location and business area. We will thus seek to achieve this diversification by actively capitalizing on M&A opportunities as we simultaneously pursue organic growth. Our target is not limited to diversification of geographical location; we are also transforming our product lineups and broadening our business areas. To this end, we are expanding our specialty insurance lineup in the nonlife insurance business and our protection-type product lineup in the life insurance business.

Business Unit Profits / 2002 Domestic non-life 96% International insurance 3% / 2018 Projections Domestic non-life 44% Domestic life* 10% International insurance 45% *Domestic life insurance business Fiscal 2002: TEV basis After Fiscal 2018 Projections: MCEV basis / Future Group Vision (Image)

2. Enhancement of Business Structure

In order to achieve a lean management structure, it is absolutely essential that we work toward the enhancement of our business structure, streamlining unnecessary portions of this structure to increase flexibility. In this undertaking we will utilize technology, specifically by pursuing automation to the greatest degree possible, while also raising the value that can only be provided by people to the most inspiring levels. This will be a common theme throughout all of our business structure enhancement activities. To create value that can only be provided by people, we will revolutionize our business model with innovative products and services that preemptively address customer needs and market changes. At the same time, we will take advantage of cutting-edge technologies to form new points of contact with customers and strengthen sales capabilities.

3. Strengthening of Aligned Group Management

With a focus on spreading the common value encapsulated in our goal “To Be a Good Company,” we are endeavoring to further build upon existing Group strengths by exercising Group-based synergies, enhancing local management through the sharing of best practices, and utilizing human resources on a global basis. Furthermore, we are holding town hall meetings globally to entrench our Group culture and heighten our sense of unity in order to realize strong Group synergies. The acceleration of such efforts to strengthen aligned Group management is also expected to contribute to the development of a global business platform.

Targets of the New Mid-Term Business Plan

Through these initiatives, we are targeting an average annual growth rate of between 3% and 7% in adjusted net income in comparison to fiscal 2017. As for capital efficiency, we hope to raise adjusted ROE to above 10%.

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

Shareholder Return Policy

Dividends will remain our primary means of shareholder return, and we plan to sustainably increase dividends in line with profit growth. Our target for the payout ratio will be set at above 35% of the average for adjusted net income and will be raised gradually to move us toward our future vision for the Group. For fiscal 2018, we plan to increase dividend payments by 20 yen per share, to 180 yen.

Meanwhile, we will adjust our capital level flexibility through share repurchases and other means based on comprehensive consideration of market conditions, business investment opportunities, and other relevant factors.

Shareholder Return / Dividend per share 2011 50yen 2012 55yen 2013 70yen 2014 95yen 2015 110yen 2016 140yen 2017 160yen 2018 (Projections) 180yen 2020 Projecting dividend per share increases for 7 consecutive years Future Group Vision High-level shareholder return / Total dividends*1 2011 38.3 billions of yen 2012 42.2 billions of yen 2013 53.7 billions of yen 2014 72.2 billions of yen 2015 83.0 billions of yen 2016 105.3 billions of yen 2017 117.6 billions of yen 2018 (Projections) 130.5 billions of yen *1 2018 (Projections) is prior to reflection of share repurchases basis. / Share repurchases*2 2014 50.0 2016 50.0 2017 150.0 *2 Total amount approved by the announcement date of full-year results of respective years. The figure for 2017 is maximum.