The First The First Informational Informational Meeting Meeting in Fiscal 2003 on May 30, 2003 1
Achievements of MS WAVE (2001-2002) ＭＳＷＡ ＷＡ Ｖ Ｅ ＭＳ Ｖ Ｅ growth profitability growth profitability stability confidence stability confidence 2
MS WAVE Results for Fiscal 2002 Higher Net Premiums and Net Income against Harsh Economy Higher Net Premiums and Net Income against Harsh Economy planned results (bil yen) good good underwriting underwriting → underwriting income 33.0 37.0 difficult market difficult market → net interest and dividend 50.0 51.4 investment investment → devaluation loss -15.0 -50.3 solid earnings and sound B/S solid earnings and sound B/S financial financial → net income 32.0 32.4 policy policy for sound balance sheets � discount rate on PBO � expense for transferred personnel � reserve for price fluctuation � IBNR for asbestosis 3
MS WAVE Achievements (1) planned results (bil yen) → net premiums written 1,184.5 1,197.0 → increased amount +8.8 +21.3 → +0.8% increase rate +1.8% - low housing construction , negative factors capital investment and new car sales - slow down of savings-type products by low interest rate = consolidation power = → net premiums, non-life 1,261.5 1,253.2 (+30.0, +2.4%) → overseas subsidiaries 64.5 68.6 (+20.9, 44%) 4 (excl. Modo-rich and the effect of reinsurance related to compulsory automobile liability insurance ）
MS WAVE Achievements (2) planned results expense reduction → 35.4% 35.3% expense ratio loss improvement → 59.4% 57.2% loss ratio underwriting balance → combined ratio 94.8% 92.5% → underwriting balance Yen 62.5bil Yen 89.5bil 5
MS WAVE Achievements (3) planned results (bil yen) amount of new → 1,000.0 1,120.0 business life insurance life insurance → increase YoY +140.0 +261.5 （ ） （ Kirameki ） MS Kirameki MS Step for No.2 among non- -life peers life peers Step for No.2 among non excl. group life insurance No.1 in → V8 achieved rate of return rate of return return on investment → on investment on investment 2.37% rate of return 2.37% 6
MS WAVE Achievements (4) planned results rapidly China, Korea & Entered in → growing India all three markets build resources reinforce diversified deployed → reinsurance overseas AA- rating revenue subsidiaries acquired sources 25-billion-yen variable → Yen 42.2 billion sales at annuity MS CitiInsurance 7
MS WAVE II (2003-2004) Goal: No.1 in total corporate group power Goal: No.1 in total corporate group power No.1 in growth and profitability No.1 in growth and profitability No.1 in corporate quality No.1 in corporate quality risk solution business risk solution business diversified revenue source life life insurance insurance higher income non- -life life non sustainable growth overseas overseas insurance insurance financial service financial service higher risk- -related related risk shareholders’ value 8
MS WAVE II Strategy for No.1 in Growth & Profitability 5 financial benchmarks as targets financial benchmarks as targets 5 ① No.1 in increase rate of net premiums written from （ as growth index ） domestic non-life insurance ② No.2 in consolidated net premiums written from （ as growth index ） non-life insurance ③ No.2 in the amount of life insurance in-force among subsidiaries of non-life insurers （ as growth index ） ④ No.1 in the combined ratio （ as profitability index ） ⑤ No.1 in the rate of investment return （ as profitability index ） 9
MS WAVE II Financial Targets for FY2004 (1) consolidated non-life basis (bil yen) (bil yen) net premiums written net premiums written net premiums written net premiums written 1,230.0 1,317.0 1,230.0 1,317.0 expense ratio 33.8% expense ratio 33.8% loss ratio loss ratio 59.2% 59.2% combined ratio 93.0% combined ratio 93.0% net interests and dividends 47.0 net interests and dividends 47.0 net income net income net income net income 52.0 57.0 52.0 57.0 ROE 4.7% ROE ROE 4.7% ROE 5.1% 5.1% 10
MS WAVE II Financial Targets for FY2004 (2) compared to targets for FY 04 set in Integration Plan Original basic MS WAVE II major factors MS WAVE II Integrated Plan (bil yen) (bil yen) Premiums from savings-type → net premiums 1,240.0 1,230.0 insurance : Yen 26.6bil less Company expense ratio : 0.5% up → expense ratio 32.5% 33.8% Agency & brokerage : 0.8% up → loss ratio 59.5% 59.2% Loss ratio : 0.3% down → combined ratio (as above) 92.0% 93.0% net interest and Expected long term interest rate : → 80.0 47.0 dividend 1.2% down from 3.4% Underwriting balance, → net income 84.0 52.0 interest and dividend consolidated → Life insurance, financial services 94.0 57.0 net income 11 (excl. Modo-rich and the effect of reinsurance related to compulsory automobile liability insurance ）
MS WAVE II Financial Targets for FY2004 (3) net income ( ＊ ) from business Yen10 bil bil in in proforma proforma net income Yen10 other than domestic non-life insurance (bil yen) amount in-force 6,900.0 life life insurance insurance proforma net income （ ＊） 2.0 net income 6.6 overseas overseas net income financial services 1.0 financial services net income risk- -related related 0.1 risk ＊ before provision of extra reserve for net level premium method of valuation 12
growth index ① No.1 in Increase Rate of Net Premiums from Domestic Non-life Insurance (1) Reinforce retail marketing contribution to increase in FY2002 contribution to increase in core product MVP MVP product product auto insurance MOST MOST +0.8% accident + medical VIV VIV +1.5% lineup lineup fire insurance Home Home Pikaichi Pikaichi +4.7% new automobile insurance contracts monthly 30 per salesperson sales force sales force insurance consultants 450 to employ new agents + channels + channels 4,000 new group insurance 2,600 entities new corporate clients 6,250 entities Targets for FY2003 Targets for FY2003 tie- -up with up with tie Sumitomo Life premium income Yen 8.8bil (+Yen 0.8bil) life insurer life insurer Mitsui Life premium income Yen 12.0bil (+Yen 8.0bil) credit long-term fire insurance bank- - bank amount of sales Yen 13.0bil (+Yen 2.0bil) assurance assurance 13
growth index ① No.1 in Increase Rate of Net Premiums from Domestic Non-life Insurance (2) Reinforce retail marketing “Agent MS1,” 40,000 agents on IT network - accounting for 85% of revenue - First prize awarded in operational operational IT Commanding Management innovation innovation (selected among 413 entities by Management Science Institute) - aggressive phone marketing nationwide - Sales Centers in 43 branches for 17,300 agents enhance service network claims claim service started at 4 newly established claims claims dept. (Gunma, Chiba, Saitama and Shizuoka) handling handling 100 staff deployed additionally 14
growth index ② No.2 in Consolidated Net Premiums from Non-life Insurance Underwriting From No.3 to No.2, leveraging overseas business - Strategically allocate resources in Asia - Increase rates in US for better margin - Strengthen reinsurance business Results Results Planned Planned Consolidated Consolidated FY2002 FY2004 FY2002 FY2004 net premiums net premiums Yen 1,317.0bil Yen 1,317.0bil Consolidated net premiums Yen 1,253.2bil overseas overseas Yen 87.0bil Yen 87.0bil overseas Yen 68.6bil 15
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