MS&AD Integrated Report 2017 MS&ADʼs Story of Value Creation and Integrated Thinking Management December 25, 2017 MS&AD Insurance Group Holdings, Inc. Todayʼs Agenda I. MS&AD’s Story of Value Creation II. Integrated Thinking Management 1 MS&AD Insurance Group Holdings, Inc.
Ⅰ. MS&ADʼs Story of Value Creation MS&AD Insurance Group Holdings, Inc. Background of MS&ADʼs Value Creation Story < Trends in Combined Ratio (W/P) in the Domestic Non-Life Insurance Industry> 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Law, institution Failure to pay incidental insurance claims Disaster Great Hanshin Earthquake Priority to Quality Suspension of business caused by non-payment of Law, institution improvement insurance claims associated with third-sector Deregulation Agreement reached in the US Japan Insurance Talks insurance products Lehman crisis Cross entry between life insurance companies and non-life insurance companies Financial market Increasing Expense into each other’s business through their subsidiaries Financial market Greek crisis 117.2% Deregulation Enforcement of the amended Act on Non-Life Insurance Rating Organization 103.4% 103.1% Combined ratio 102.1% 101.7% 96.8% 97.9% 97.1% 96.2% 96.2% 96.4% 94.5% 92.7% 94.2% 96.0% 95.5% 92.3% 91.8% 92.7% 92.0% 89.2% 88.5% Disaster 83.4% Great East First industry reorganization (MSI, Aioi, NDI, Nipponkoa Insurance Company, Japan Earthquake Industry reorganization Tokio Marine & Nichido Fire Insurance, Sompo Japan Insurance) Disaster Abolition of regulations of entry into the third-sector insurance business, Deregulation Thai flooding 70.4% launches of cancer insurance and medical insurance Loss ratio 66.6% 68.1% 67.5% Start of OTC sales at banks 64.1% 62.3% 63.6% 63.4% 60.6% 62.0% 62.8% 59.9% 57.4% 59.3% 59.5% 59.2% 54.7% 55.3% 52.8% 52.8% 53.5% Second industry reorganization Industry reorganization (MS&AD, NKSJ) Law, institution Revision of reference loss cost rate 39.5% 39.0% 39.2% 39.4% 38.6% 37.6% 37.0% for voluntary automobile insurance in June 2009 34.5% 33.2% 32.6% 32.1% 32.2% 33.2% 35.1% 35.0% 34.6% 33.8% 33.0% 32.3% 32.2% 32.1% 32.1% Expense ratio Establishment of the General Insurance Rating Organization Law, institution Deregulation of Japan Revision of the non-fleet discount/ Law, institution Revision of the underwriting reserve system loading rate system in automobile ※ Source of Loss ratio and Expense ratio : The General Insurance Association of Japan insurance 3 MS&AD Insurance Group Holdings, Inc.
Background of MS&ADʼs Value Creation Story 2006 April 2010 ＜ History of the MS&AD Group ＞ Failure to pay incidental insurance claims April 2001 Implementation September 2007 Ban on insurance of the Insurance Implementation of Financial Instruments sales by banks April 1996 Act February 1997 and Exchange Act partially lifted Revision of the Insurance Approval of risk-subdivision-type December 2007 Business Act automobile insurance Insurance sales by banks fully - Mutual entry into life and non- liberalized life insurance business July 1998 - Reform of Insurance Rating Abolition of obligation to use the Organization system premium rates calculated by the - Introduction of products and rating organization premium rates notification MS&AD Integrated Report 2017 system P.14 – P.15 October 1996 - Mutual entry into life and non- life insurance business by MS&AD Group（2010） subsidiaries （ 2001 ） Mitsui Sumitomo Insurance Mitsui Sumitomo Insurance Reorganization by （ 2001 ） （ 2013 ） （ 2010 ） Function Aioi Insurance Aioi Nissay Dowa Insurance Nissay Dowa General Insurance （ 1893 ） Sumitomo Marine （ 2000 ） （ 1918 ～） Mitsui Marine Mitsui Direct General Insurance （ 2001 ） （ 2011 ） Mitsui Sumitomo Kirameki Life Dai-Tokyo Fire （ 1918 ～） Mitsui Sumitomo Aioi Life （ 1897 ～） Chiyoda Fire Aioi Life （ 2011 ） （ 2005 ） （ 1897 ～） Dowa Fire Mitsui Sumitomo Primary Life （ 1996 ～） Nissay General Ins. （ 2001 ） Mitsui Sumitomo MetLife Ins. Mitsui Sumitomo Citi Ins. Life MS&AD Insurance Group Holdings, Inc. 4 Our Mission, Vision, & Value Mission To contribute to the development of a vibrant society and help secure a sound future for the earth, by bringing security and safety through the global insurance and financial services business. Vision To create a world-leading insurance and financial services group that continues to seek sustainable growth and to enhance enterprise value. Value Customer Customer Integrity Integrity Teamwork Teamwork Innovation Innovation Professionalism Professionalism Focused Focused 5 MS&AD Insurance Group Holdings, Inc.
MS&ADʼs Story of Value Creation MS&AD Integrated Report 2017 P. 6 – P. 8 Development of a Vibrant Society and a Sound Future for the Earth Social Issues Frequent accidents/disasters Stable Lives of People Dynamic Business Activities Extensive natural disasters caused by climate change Resilient and sustainable society Mounting burden of nursing/ medical care due to demographic aging Decreasing vitality of local MS&AD communities, etc. Input Outcome Global insurance / financial services business Creating value together with our Domestic Non-Life Insurance Domestic Non-Life Insurance Identify risks Business Business MS&AD’s Strength Reduce the economic International and provide burden when risks Business information on Domestic Life Insurance Domestic Life Insurance become real stakeholders risks Business Business Financial Services Business Financial Services Business Prevent risks from being realized / Reduce Risk-Related Services Risk-Related Services the impact of risks Business Business Transformation of Business Optimum Resource Allocation Corporate Culture and Human Strengthening of Corporate Structure with Eye on Future and Appropriate Risk Assets Development for Taking on Governance Changes in Environment Management Challenges 6 MS&AD Insurance Group Holdings, Inc. MS&ADʼs Strengths MS&AD Integrated Report 2017 P.6, P.9 DIVERSITY Strengths and solidarity derived from diversity SCALE SUSTAINABILITY Adequate capacity Always with society derived from scale HISTORY INNOVATION Past experience and Realizing growth in tune lessons are the seeds with the times of the future 7 MS&AD Insurance Group Holdings, Inc.
Group that Leverages Diversity MS&AD Integrated Report 2017 P.9 Diversifying risks and the needs of customers Diversity in products Diversity in channels Overseas Overseas Mitsui Sumitomo Mitsui Sumitomo Aioi Nissay Subsidiaries Subsidiaries Insurance Dowa Insurance Toyota Retail Co., Ltd. Co., Ltd. MS Amlin Business Operating companies MSIG Holdings Box Innovation with different business (Asia) Group concepts Mitsui Sumitomo Mitsui Sumitomo Mitsui Sumitomo Mitsui Sumitomo MSIG Holdings … (Americas) Diversity Aioi Life Primary Life Insurance Insurance Affiliated group MSIG Holdings operating Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. (Europe) companies … Mitsui Direct Mitsui Direct I t Ri k R InterRisk Research h Institute & Consulting, General Inc. Inc. Insurance ANSHIN DIAL Co., Ltd. Co., Ltd. Co., Ltd. MS&AD Loan Services Diversity in human assets Co., Ltd. … 8 MS&AD Insurance Group Holdings, Inc. Four Social Issues We Address MS&AD Integrated Report 2017 P. 5, P. 33 Stakeholders’ Interest Importance to MS&AD 9 MS&AD Insurance Group Holdings, Inc.
Special Feature MS&AD Integrated Report 2017 P. 52 – P. 61 Creating Value Helping to Solve Social Issues Employees from around the world talk about the importance of their work and aspirations • Ms. Diane Macandog (Non-Life Ins., Phillipines) • Mr. Guoliang Luo (Non-Life Ins., Singapore) • Ms. Kathy Zdravevski (Non-Life Ins., Australia) • Mr. Jack May (Non-Life Ins., UK) • Mr. Yoshimitsu So (Life Ins., Japan) • Mr. Norio Furuhashi (Financial Services, USA) • Ms. Nannicha Pattara-akarapan (Risk-Related Services, Thailand) Introduction of our activities to solve 4 social issues in the world ① Protecting people’s lives and business from accidents and disasters • Providing safety and security with the telematics technology • Helping coastal vessels stay safe with a smartphone • Comprehensive assistance for dealing with cyber security ② Controlling climate change and the deterioration of the natural capital • Rapid support through our global network • Supporting the sustainable use of natural capital ③ Ensuring a healthy and affluent lifestyle • Helping people live long healthy lives ④ Supporting the development of local communities • Valuing our interaction with local communities MS&AD’s contribution against the 8 most costly market insured losses in 2016 ： Through the claims payments, helping our customers mitigate losses caused by the disasters enlarged by the climate change 10 MS&AD Insurance Group Holdings, Inc. Special Feature： Our Value Creation Story MS&AD Integrated Report 2017 1. Protecting peopleʼs lives and businesses P. 52 – P. 61 from accidents and disasters 11 MS&AD Insurance Group Holdings, Inc.
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