New Mid-Term Plan “To Be a Good Company 2020”
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 2008 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 to turn the changes to opportunities. To achieve this we have identified the ‘4 key elements of Future Group Vision’ that will allow us to take advantages of opportunities to continue our current direction of growth. The ‘4 key elements’ 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 ‘4 key elements in the Future Group Vision’ 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 500 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 and nursing care related insurances. 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 a management 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 larger-scale 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.