Mitsui Sumitomo Insurance CSR Report 2006(2.3MB)

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MSI CSR Report 2006 62 （新） 09129 7,000 2007.1 eam Minus 6%’ project, a national campaign led by the Japanese government to prevent global warming. participate in the ‘T Mitsui Sumitomo Insurance and Mitsui Sumitomo Kirameki Life Insurance Message from the management

A Message from the President Working honestly while placing the greatest importance on the customers’ perspective

In June 2006, Mitsui Sumitomo Insurance (MSI) establishment of our vision of becoming a compa- received strict administrative measures that ny that is committed to the customers’ perspec- ordered the temporary suspension of business for tive, a vision that we would like to share with our various issues, including inappropriate nonpay- stakeholders. We will keep you informed of every ment of claims on life medical insurance. MSI phase of this step-by-step process. reached the fifth year since its foundation in the It won’t be easy to recover our stakeholders’ midst of a crisis that threatened the relationship trust. However, we and our agents are genuinely of trust between our customers and MSI. committed to dealing with this crisis and building Providing the finest products and services and an honest business. realizing customer satisfaction—our Mission This report seeks to earn your trust by providing Statement—by properly explaining our products information on the current status of key issues and and services to customers and properly handling areas of improvement as well as future trends in claims are the foundations of a non-life insurance various activities we have undertaken. We would company’s corporate social responsibility (CSR). I sincerely welcome any guidance or advice you recognize that a segment of our business opera- have with regard to this report. tions was not consistent with our Mission Statement, and I would like to use this opportunity to offer my deepest apologies to our stakeholders who have placed their trust in the Company. We, all of the employees and officers at MSI, are sharing our determination to regard the customers’ perspective—not only that of our policyholders but also of general consumers—when we make

decisions concerning business operations. At pres- Toshiaki Egashira ent, we are taking the customers’ perspective in President and CEO our review of all business operations and have created a concrete view of the future with the

Mitsui Sumitomo Insurance CSR Report 2006 Message from the management

A Message from the Chairman Reflecting outside views through dialogue with stakeholders

Since our foundation in 2001, we at the Mitsui established the Audit Committee, over half of Sumitomo Insurance Group (MSIG) have engaged which consists of outside directors, to create a in corporate social responsibility (CSR) activities highly transparent management structure. In addi- to earn the trust of our stakeholders. Our respon- tion, we shall hold periodic meetings of the sibilities to our seven groups of stakeholders, com- Council on Promotion of Customers’ Interests, a prising customers, shareholders, agents, business stakeholder meeting with experts who represent partners, employees, the local and international customers. Looking ahead, we will use the United communities, and the environment, are outlined Nations Global Compact network to establish dia- in the MSIG Charter on Professional Conduct. logue with various stakeholders, including compa- Furthermore, in June 2004, we participated in the nies from other sectors and citizens’ groups. United Nations Global Compact to show both By learning from various dialogues with our those inside and outside the Company that we are stakeholders, we aim to be a company that consis- committed to operations that reflect CSR. tently meets society’s demands. We look forward We have always striven to put the MSIG Charter to your continuing support and guidance. on Professional Conduct into daily practice. Listening to stakeholders’ voices and incorporating their feedback into management decisions and business operations are of the utmost importance in ensuring that we practice the responsibilities to our stakeholders laid out in the MSIG Charter on Professional Conduct. It has become clear that our efforts in this area have not been sufficient. I offer my sincere apologies for this and the great annoy- ance it has caused everyone. Yoshiaki Shin At the moment, we are strengthening dialogue Chairman with our stakeholders and working on a plan for reflecting outside views. To that end, we have

What is the United Nations Global Compact? • The Global Compact is an international program that supports 10 principles in four areas—human rights, labor, environment, and anti-corruption—with participation from leading companies along with international organizations, labor, and civil society. • Although there are no obligatory standards or regulations, member organizations uphold the principles and are required to proactively disclose the status of their participation and any concrete actions taken. • There are approximately 3,300 participating organizations around the world. The Japanese network included 47 organizations as of August 31, 2006. Mitsui Sumitomo Insurance CSR Report 2006 Editorial policies

Mitsui Sumitomo Insurance (MSI) has issued a corporate social responsibility (CSR) report since fiscal 2004 to deepen stakeholders’ understanding of the Company. This report was created in accordance with the basic policies listed below to communicate to people of various backgrounds information about the Group that, in addition to CSR activities and their status, encompasses what MSI believes and its vision for fulfilling its social responsibility.

L Information about MSIG’s beliefs, status of initiatives, and future issues with regard to its responsibilities to its customers, shareholders, agents, business partners (contractors, suppliers, and others), employees, local communities and the international community, and the environment is based on the MSIG Charter on Professional Conduct.

L In every instance in which it has been possible, we have worked to quantify performance data and to disclose negative information. Target values have been listed when available.

L This document includes messages from top management as well as CSR Promotion Members in each department. L Taking the view that CSR activities constitute a strategic investment, we have quantitatively measured the cost and effect of CSR efforts and disclosed this information as CSR accounting.

L This report discusses the June 2006 administrative measures resulting from inappropriate nonpayment of claims for whole life medical insurance and other problems as well as the problems’ origins, background, and resulting review of business operations as well as the status of initiatives related to the review of our business operations as of September 30, 2006.

L To ensure the conscientious communication of information that customers can trust, we have referred to the following neutral guidelines: • The Global Reporting Initiative (GRI)’s Sustainability Reporting Guidelines 2002 • The Ministry of the Environment’s Environmental Reporting Guidelines 2003

L The scope of the items covered in this report was narrowed down to facilitate streamlined content. For extensive information as well as detailed financial information, please see specific reports. P Regular reports from Mitsui Sumitomo Insurance • Company brochure: A concise overview of the Company URL: http://www.ms-ins.com/company/profile/corporateprofile.html • Disclosure report: A summary of the Company’s business activities and detailed financial information URL: http://www.ms-ins.com/ir/library/disclosure_j.html • Annual report: Intended primarily for overseas investors, the annual report provides a summary of the Company’s business activities, financial reports, and other information in English. URL: http://www.ms-ins.com/ir/library/annual_j.html • CSR report: Past reports are available at the site below. URL: http://www.ms-ins.com/company/csr/report.html

L Akio Nomura, Visiting Professor, The Okuma School of Public Management, Waseda University, and former director of the United Nations Information Center, Tokyo, has created a third-party report that provides opinions and advice regarding MSIG’s initiatives from a third-party perspective ( p. 59). .

Period covered: Fiscal 2005 (April 1, 2005, to March 31, 2006) Note: Some sections include activities undertaken after April 1, 2006. Scope of report: Mitsui Sumitomo Insurance Co., Ltd. Note: Some sections include the activities of Group companies. Previous publication: August 2005 Next publication: August 2007 (planned)

Mitsui Sumitomo Insurance CSR Report 2006 Editorial policies/Contents

Contents [Applicable 10 principles of the United Nations Global Compact (GC)]

1 Message from the management

3 Editorial policies

4 Contents

5 Mitsui Sumitomo Insurance Group Charter on Professional Conduct Applicable GC principles 1 6 7 8 9 10

7 CSR promotion system

8 Participating in international initiatives

9 Announcement of administrative measures and our new start

15 Mitsui Sumitomo Insurance Group management

16 Ensuring compliance

18 Information management systems

19 Our extended family and CSR activities in fiscal 2005

21 Responsibility to customers P 10 principles of the United Nations Global Compact (GC) 27 Responsibility to shareholders L Human 1 Businesses should support and respect the pro- rights tection of international human rights within their 31 Responsibility to our agents sphere of influence; and 2 make sure they are not complicit in human rights 35 Responsibility to business partners Applicable GC principles 10 abuses. 37 Responsibility to employees Applicable GC principles 1 3 6 L Labor 3 Businesses should uphold the freedom of association and the effective recognition of the right of 41 Responsibility to local and international communities collective bargaining; 4 the elimination of all forms of forced and compul- 45 Responsibility to the environment Applicable GC principles 7 8 9 sory labor; 5 the effective abolition of child labor; and 53 Messages from stakeholders 6 the elimination of discrimination in respect of employment and occupation. 55 CSR accounting L Environment 7 Businesses should support a precautionary 59 Reading the MSI CSR report approach to environmental challenges; 8 undertake initiatives to promote greater environmental responsibility; and Cautionary statement Any statements about Mitsui Sumitomo Insurance Co., Ltd.’s future plans, 9 encourage the development and diffusion of envi- strategies, and performance contained in this report that are not historical facts ronmentally friendly technologies. are meant as, or should be considered as, forward-looking statements. These L Anti- 10 Businesses should work against corruption in all forward-looking statements are based on the Company’s assumptions and corruption its forms, including extortion and bribery. opinions in the light of the information currently available to it. The Company wishes to caution readers that a number of uncertain factors could cause actual results to differ materially from those discussed in the forward-looking statements. Principles of the United Nations Global Compact ( pp. 2, 8) Such factors include, but are not limited to: (1) General economic conditions in the Company’s markets, (2) Competitive conditions in the insurance business, URL for the Mitsui Sumitomo Insurance Website: (3) Fluctuations of foreign currency exchange rates, and http://www.ms-ins.com (4) Government regulations, including changes in the tax rates.

URL for the Mitsui Sumitomo Kirameki Life Insurance Website: http://www.ms-kirameki.com

Mitsui Sumitomo Insurance CSR Report 2006 Mitsui Sumitomo Insurance Group Charter on Professional Conduct Mitsui Sumitomo Insurance Group Charter on Professional Conduct

Responsibility to the environment We, at the Mitsui Sumitomo Insurance Group, aspire to be a company that enjoys the trust of all members Our conduct of society and inspires pride among its employees. The Mitsui Sumitomo Insurance Group works to protect and improve the global environment for the sake of future generations. To this end, acting in the best interests of the insurance and financial services community, we: A We work to develop and deliver products and services that help pro- As members of the Mitsui Sumitomo Insurance Group, • Accept, as life’s mission, the provision of superior solutions to social concerns and risks; vide solutions to global environmental issues. we will conduct ourselves under the following principles: B We maintain energy and resource conservation, waste reduction, and • Place top priority on fair, impartial, and ethical conduct; and L Fundamentals of our conduct recycling programs and work to reduce the impact of our business P To achieve constant progress, we recognize that fairness and honesty are • Constantly work to ensure adequate transparency through internal and external communication and activities on the environment. crucial to business operations, and we will place priority on the ethicality of C We maintain ongoing programs in accordance with the Mitsui extensive disclosure of information. our actions in all respects. Sumitomo Insurance Group Environmental Policy. P We will not discriminate against any person based on race, nationality, gen- der, age, profession, position, belief, or handicap. Responsibility to local communities P We value information disclosure and will work to create bonds of trust with and the international community society through the fulfillment of the aforementioned seven responsibilities.

The Mitsui Sumitomo Insurance Group L Endeavors in daily activities The Mitsui Sumitomo Insurance Group maintains good relations P We will not engage in any practices that our consciences regard as disreputable. embodies the following seven principles with local and international communities and works for mutual P When another party is dissatisfied, we will first look for shortcomings in our- Responsibility progress as a member of these communities. as its corporate pledge to society. Responsibility selves. to the A We respect the culture, customs, and history of each country and P We will set completion dates for all objectives and take swift action. to customers region, and will build friendly relations through the promotion of environment P We will manage our own schedules and remain mindful of others’ time so as mutual understanding and contribute to development in each country to provide a comfortable working environment. and region. P We value the pursuit of reform and innovation and embrace the challenges B We encourage employee volunteer work of all kinds as well as partici- of new tasks. Responsibility to customers pation in other such social action programs. P We value the spirit of learning beneficial practices and will carefully nurture

C We continually support academic research, education, culture and art, the employees that will take charge of the generations to come. We provide top-quality risk solutions services with customer and athletics. satisfaction as the basis for all of our actions. Responsibility L Emphasis on communication Responsibility to local We will greet others with a sincere smile and extend heartfelt greetings. A Each and every employee is fully aware that individual conduct is communities and P representative of the Company as a whole and maintains a sense to shareholders Responsibility to employees P We will use clear and concise language in both oral and written communication. the international of gratitude to the customers with whom they interact. We community P Company policies will be understood by all employees, and information will approach all customers without bias and practice fair and trans- The Mitsui Sumitomo Insurance Group provides a stimulating and be shared. parent competition. Mitsui Sumitomo Insurance Group amenable workplace for the invaluable employees that uphold its P We will place priority on the reporting of negative information. B We work to make accurate assessments of customer needs and organization. P We value teamwork, and Company and department objectives will be provide the most suitable products and services. We give clear A We respect the human rights, individuality, and initiative of our achieved through the combined work of all employees. employees and implement fair and honest human resource policies. and concise explanations of the content and crucial points of L Thoroughgoing compliance We emphasize skill development and provide our employees with each insurance policy. P We will observe all applicable laws and regulations. opportunities for self-fulfillment. C In the event of a claim, we maintain consideration for the victims P We will have the courage to point out unethical practices or practices that B We provide an open and harmonious workplace, where employees and all involved parties and provide prompt, appropriate, and violate laws and regulations and cooperate in correcting such practices. can freely express opinions, that is safe, clean, and free of hazards. polite claims-handling services. Responsibility Responsibility P We will participate in no transactions that may hinder the interests of the We will work to help employees achieve comfortable lifestyles for D We exercise the most stringent control of private information to employees Company or that are made for personal gain. to agents them and their families. obtained from our customers in the course of service operations P We will stand firm against antisocial forces and organizations and refuse all C We work to prevent discrimination, sexual harassment, and power and make no use of such information other than that for which undue or improper demands. customer consent has been obtained. Responsibility harassment. In the unlikely event of any contention, we will promptly E In the unlikely event of discordance, we will respond quickly and to business part- look into the case and take measures to aid the injured parties and L Criteria for decisions when in doubt earnestly to provide the quickest possible solution and apply all ners prevent future recurrences. When in doubt over the correct direction, the decision will be made based on experience thus gained to the prevention of future mishaps. (Contractors, suppliers, the following criteria: and others) P Whether the action will violate any laws or regulations Responsibility to business partners P Whether the action is ethical Responsibility to shareholders (contractors, suppliers, and others) P Whether the decision is being made based on adequate information and with ample caution The Mitsui Sumitomo Insurance Group lives up to its share- Responsibility to agents The Mitsui Sumitomo Insurance Group maintains healthy relations P Whether the decision is being made with adequate consideration for all holders’ expectations by expanding its enterprise value and with its business partners, and, together, we fulfill our responsibili- involved parties providing appropriate profit sharing. The Mitsui Sumitomo Insurance Group works to achieve ties to society. P Whether one can take pride in describing the action to one’s family and mutual prosperity through collaboration with its agents, who A We maintain management with transparency and proper check- A We always treat our business partners with respect. friends are crucial business partners. and-balance systems, and we will pursue sustainable improve- B We do not abuse our standing in transactions to demand inequitable P Whether the action will hinder the trust or the brand value of the Mitsui ment in business performance through the efficient use of A We fully collaborate with our agents to achieve constant terms. Sumitomo Insurance Group business resources and adequate risk management. improvement in customer satisfaction while conducting compre- C We cooperate with our business partners and provide support to P Whether the action will hinder the continual progress of the Mitsui B We conduct dynamic IR programs both in Japan and overseas hensive compliance activities and appropriate implementation of ensure they fulfill their social responsibilities and commend those Sumitomo Insurance Group and enjoy open dialogue with our shareholders and investors. accountability measures and paying close attention to the man- partners who make diligent efforts in this respect. C We have absolutely no involvement in any actions that might agement of customers’ private information. include insider trading. B We maintain smooth communication with our agents and think and act in unity. C We maintain fair and healthy relations and work to achieve The Mitsui Sumitomo Insurance Group Charter on Professional Conduct is available on our Website. http://www.ms-ins.com/company/csr/action_group.html mutual independence and coprosperity.

Mitsui Sumitomo Insurance CSR Report 2006 Mitsui Sumitomo Insurance CSR Report 2006 CSR promotion system

We have established the MSIG Charter on Professional All employees participate in CSR initiatives. Conduct, which forms the basis of employee behavior.

In October 2004, MSI unveiled the MSIG Charter on Professional MSI has established the CSR Committee to achieve the optimal Conduct ( p. 5), a pledge to stakeholders (various parties balance of CSR activities. The committee is chaired by the involved with the Company) about how MSIG’s employees will Chairman and consists of principal officers and managers of rele- behave. Drafting the Charter took over one year, incorporating dis- vant departments. Its objective is to manage overall progress to cussions at major nationwide business sites as well as public ensure stable and continuous CSR activities. comment from within the Company. The CSR Section, a full-time CSR department, has been estab- As principles of behavior that uphold our Mission Statement, lished as part of the Corporate Planning Department and, in addi- the MSIG Charter on Professional Conduct aims at the Mission tion to a full-time section chief and staff, the section includes Statement’s realization by translating its spirit into everyday representatives from the Customer Service, Human Resources, actions. The Charter outlines MSIG’s responsibilities toward its General Affairs, Public Relations, and Compliance departments seven groups of stakeholders, which include customers, share- that work horizontally to plan and execute initiatives. Furthermore, holders, agents, business partners, employees, the local and inter- 690 operations managers (branch managers) and CSR promotion national communities, and the environment. A preamble outlining representatives lead initiatives at Groupwide branches and busi- our core thoughts and values explains why we must fulfill these ness sites, including those located overseas. seven responsibilities, while the “Our conduct” section at the end of the Charter explains how each individual employee should conduct himself. Each business site has its own local language ver- We are developing initiatives that prioritize sion of the MSIG Charter on Professional Conduct, which is the workplace meetings. core of CSR initiatives and the basis for activities. However, it is not possible for us to say that we have satisfac- The MSIG Charter on Professional Conduct has meaning only if torily put into practice such items as “In the event of a claim, we individual employees understand it, agree with it, and put it into maintain consideration for the victims and all involved parties and practice in the course of their everyday work. We are working to provide prompt, appropriate, and policy claims-handling services,“ create an environment in which employees can share problems which is one of our responsibilities to our customers. and areas for improvement when putting the Charter into practice. Consequently, we are reviewing Company frameworks and sys- In fiscal 2005, every workplace in Japan had two workplace tems as well as individual operations to ensure that they are in meetings to discuss their ideal vision of the Company, what it accordance with the spirit of the Charter. ( p. 9: Announcement of should strive for, and issues to be tackled at the workplace, as administrative measures and our new start) well as specific measures to be taken.

L Interrelationships among CSR initiatives

CSR activities to promote trust with seven stakeholders Creating manage- Customers Environment Local communities ment systems to Shareholders and the international community promote CSR Disclose informa- Agents Business Employees initiatives partners tion to stakeholders

—Overall evaluation Making CSR an integral part of the corporate culture and promote two- Understanding, linking, and implementing using MSI CSR the MSI Group Charter in daily business activities way communication • Holding workplace meetings Management Score • Improving training and communication system Strengthening internal systems Compliance/risk management/crisis management/corporate governance/other issues

Mitsui Sumitomo Insurance CSR Report 2006 両観音表面（推進体制・国際的なイニシアチブ）p.8 260mm× 205mm 両観音表面内折り扉①（特集）p.9 260mm × 195mm

CSR promotion system/Participating in international initiatives

In light of the incident concerning the claims payment defaults where employees throughout Japan can share and exchange infor- Announcement of administrative of supplementary coverage items, the customers’ perspective is a mation about initiatives. theme for the entire Company in fiscal 2006. Business sites nation- Along with these activities, branches throughout Japan as well wide set targets for initiatives at the beginning of the fiscal year as major overseas business sites are engaging in independent ini- and have begun initiating activities. In order to ensure that these tiatives led by branch managers and CSR promotion representa- initiatives are sustained and that they reach all Group employees, tives. we are incorporating CSR into all types of training, including training for newly promoted managers, assistant managers, and operations leaders, and have created opportunities for individual Emergence of the problems and their origins and background employees to consider and discuss the specific CSR measures they should be taking. In addition, we have established a “Let’s Talk In June 2006, the Company received administrative measures that included an about CSR” section on the Company intranet’s message board Workplace meetings order for partial suspension of business as well as a remedial action order. On July 21, 2006, the Company submitted its Business Improvement Plan to the Financial We are committed to evaluating the status of initiatives. Services Agency (FSA). In accordance with the administrative measures, as of We have created the MSI CSR Management Score, a standard for evaluating all CSR activities based on 66 items. Once a year, the December 31, 2006, the Company has suspended the submission of applications department responsible for CSR promotion uses a five-rank grading to evaluate the status of its section’s initiatives against the evalua- for new products and revisions of existing products as well as the concluding of tion standards. The resulting score is reviewed by the CSR Committee. contracts and solicitations of certain insurance products. Selected MSI CSR Management Scores from the first half of fiscal 2006 Evaluation standard Status of the Company’s initiatives Score Officers verbally express their • In August, the Chairman and President, as well as representative officers from the Head Office, 3 Communication beliefs directly to employees and began paying visits to branches throughout Japan to engage in the free exchange of opinions and The permeation and success The facts that led to the administrative measures consisted of the following between take actions to create opportuni- hold management meetings in which business operations issues and their solutions are discussed. of initiatives are still being six issues: officers and ties to obtain direct feedback from They are expected to have visited all 189 branches nationwide by the end of November. measured. the front lines about the actual • At all meetings and training sessions, officers transmit their messages in person to employees. employees state of operations.

Customers’ demands, complaints, • The Customer Service Department has been established to carry out centralized management and 2 1) Inappropriate nonpayment of claims for whole life medical insurance and other and opinions are communicated to analysis of customer feedback—including complaints—so that it can be used to improve business A framework and system for Responding to officers, and feedback is reflected operations. initiatives has been put in third-sector products, customers in improvements. • The Council on Promotion of Customers’ Interests, over half of which consists of outside experts, place. has been established to analyze customer feedback and propose various policies to the Board, with 2) Claims payment defaults of supplementary coverage items, the aim of improving customer protection and convenience. (To begin in October 2006) 3) Inappropriate administration of agents, Business sites are equipped with • In fiscal 2006, two Group companies, Mitsui Sumitomo Insurance Staffing Service Co., Ltd., and 4 environmental management sys- MSK Insurance Center Co., Ltd., have initiated activities and are expanding the scope of their activi- 4) Inappropriate systems for complaints handling and misconduct handling, Environmental As a result of promoting initia- tems. ties in anticipation of a new audit for ISO 14001 certification in the second half of fiscal 2006. management tives, awareness and success • To strengthen environmental measures that have roots in our principal business, we identified 111 rates have been improved 5) Inappropriate overseas network administration systems, and system activities at 40 departments (including Group companies), and promoted their resolution. (In fiscal compared with the last evalu- 2005, 74 activities were resolved at 35 departments.) ation in March 2006. 6) An inappropriate management administration system. Participating in international initiatives

In response to the problems, the Company strictly implemented in-house puni- 10 principles of the United Nations Global Compact We are participating in the local network tive actions against its employees and officers to clarify their responsibilities, which of the United Nations Global Compact. L Human rights 1. Businesses should support and respect the protection of international human rights within their sphere of influence; and were the cause of the administrative measures. 2. make sure they are not complicit in human rights abuses. Here, we will explain the three problems (primarily 1, 2, and 3 above) that In June 2004, MSI became the first financial institution in Japan to L Labor 3. Businesses should uphold the freedom of association and the effective recognition of the right of collective bargaining; directly affected customers and explain their origins and background. participate in the United Nations Global Compact (GC) ( p. 2). 4. the elimination of all forms of forced and compulsory labor; Participation in the GC demonstrates a company’s respect for 5. the effective abolition of child labor; and 6. the elimination of discrimination in respect of employment and human rights, labor, the environment, and anti-corruption and is occupation. For details of the administrative measures, please visit http://www.ms-ins.com L Environment 7. Businesses should support a precautionary approach to environ- further evidence of our commitment to promoting CSR. As the mental challenges; chairing company of the GC Japan network, we engage in various 8. undertake initiatives to promote greater environmental responsibility; and initiatives aimed at raising the caliber of measures taken by 9. encourage the development and diffusion of environmentally Japanese companies. Furthermore, we actively participate in a friendly technologies. L Anti- 10. Businesses should work against corruption in all its forms, includ- dialogue with the rest of the world to raise understanding and corruption ing extortion and bribery. trust of Japan within the international community. Mitsui Sumitomo Insurance CSR Report 2006 8 9 Mitsui Sumitomo Insurance CSR Report 2006 両観音表面内折り扉①（特集）p.9 260mm × 195mm 両観音表面内折り扉②（特集）p.10 260mm × 195mm

Announcement of administrative measures and our new start

Emergence of the problems and their origins and background Drastic review of business operations and the creation of a new vision by all employees

In June 2006, the Company received administrative measures that included an The Company treats the recent administrative measures with the utmost seriousness order for partial suspension of business as well as a remedial action order. On July and has created the Business Improvement Plan, which undertakes a drastic review 21, 2006, the Company submitted its Business Improvement Plan to the Financial of its business operations to realize the five initiatives listed below. Services Agency (FSA). In accordance with the administrative measures, as of December 31, 2006, the Company has suspended the submission of applications I The Company shall raise the transparency of its management through a stronger internal for new products and revisions of existing products as well as the concluding of verification system as well as third-party inspections. (Reform of corporate governance) contracts and solicitations of certain insurance products. II The Company shall engage in product development that reflects feedback from customers, agents, and employees. (Reform of product development system) III The Company shall create a system for ensuring the handling of claims and upgrade its The facts that led to the administrative measures consisted of the following system for responding to inquiries and other customer needs. (Reform of claim payment six issues: administration system) IV The Company shall ensure that compliance is the basis for business activities. (Reform of legal compliance system) 1) Inappropriate nonpayment of claims for whole life medical insurance and other third-sector products, V The Company shall value customer feedback and incorporate it into its management. (Reform of complaint response system) 2) Claims payment defaults of supplementary coverage items, 3) Inappropriate administration of agents, 4) Inappropriate systems for complaints handling and misconduct handling, 5) Inappropriate overseas network administration systems, and In addition, the Company is creating a New Vision of MSIG (New Management 6) An inappropriate management administration system. Plan) with the participation of all employees and has initiated the Create and Change Project, which aims to create a company that is open and communicative and where employee suggestions are considered. Going forward, we will concentrate all our efforts on recovering the trust of custom- In response to the problems, the Company strictly implemented in-house puni- ers and all stakeholders through the steady execution of the Business Improvement tive actions against its employees and officers to clarify their responsibilities, which Plan in our aim to become a company that uses open employee discussion to effect were the cause of the administrative measures. continual changes made from customers’ perspective. Here, we will explain the three problems (primarily 1, 2, and 3 above) that Here, we will explain the details and status of initiatives related to the review of directly affected customers and explain their origins and background. our business operations as of September 30, 2006. In the future, the Company will disclose the status of its initiatives under the For details of the administrative measures, please visit http://www.ms-ins.com Business Improvement Plan in news releases and on its Website. For details of the Business Improvement Plan and the status of our progress after October 2006, please visit our Website at http://www.ms-ins.com.

9 Mitsui Sumitomo Insurance CSR Report 2006 Mitsui Sumitomo Insurance CSR Report 2006 10 両観音中面①（特集）p.11 260mm × 195mm 両観音中面②（特集）p.12 260mm × 205mm

Emergence of the problems and their origins and background

Problem 1: Inappropriate nonpayment of claims for whole life medical insurance and other third-sector products Response P At present, we are contacting the affected customers and moving forward in the payment process and, of 1,140 cases, have completed payment for 945, or 82.9%, of the cases as of November 20, 2006.

Emergence Of the cases in which we denied payment of claims for whole life medical insurance and other third-sector products between July 2001 and June 2006, Origins Problems with our P Some of the reasons leading to inappropriate nonpayment of claims were insufficient measures taken to of the 1,140 claims were inappropriately handled. Specific examples of nonpayment are outlined below. product development carry out research on similar products; fully consider the criteria and process for handling claims, estab- problem system and manage- lishing rules, and preparing manuals; and developing a system to educate and train employees and Inappropriate handling of preexisting conditions Inappropriate application of policy termination due to violation of ment system for the P P agents so that they could engage in sales and handle claims in an appropriate manner. • MSI’s whole life medical insurance products do not cover illnesses in cases the obligation to disclose handling of claims Reform initiatives where customers had the illness before the date that insurance coverage began • When a customer signs a policy, he has an obligation to accurately disclose his P Furthermore, the systems for checking for flaws in new products after their launch and continuously II and III (preexisting condition). medical history and any illnesses he may have had (the obligation to disclose) monitoring the status of sales and handling of claims were also inadequate. • Furthermore, a clause states that the date that the illness began shall be deter- and, if he intentionally or due to gross negligence fails to disclose correct infor- Problems with the mined by a doctor’s examination. mation, or if the information disclosed is false, MSI can terminate a policy on the P Due to failures to register customer complaints into the database and the failure to discover major system for responding problems in the complaints that were registered, information related to complaints about this problem grounds that he has violated the obligation to disclose. to customer complaints was not adequately shared. However, in cases where the examination report stated that the time that the illness • However, if MSI omits certain information (for example, if its explanation about Reform initiative V began was unclear, the illness was judged to be preexisting from the time that gen- the obligation to disclose such information is insufficient, or a false explanation eral symptoms appeared, resulting in cases in which nonpayment was not based on a is given by the Company when the customer signs the policy), it cannot terminate Problems with P Customer complaints and information from the Sales and Insurance Claims Handling sections were not doctor’s examination. the policy. corporate governance fully disclosed to management, and the system for verifying that the business was being operated Reform initiative I properly was inadequate. There were some cases of inappropriate application of the obligation to disclose re- quirement in which policies of customers who did not give misleading or omit important Background P Specialized know-how is critical for developing, selling, and handling claims for whole life medical insurance. Engaging in sales information were terminated on grounds of violation of the obligation to disclose. of such products without adequate preparation for acquiring and using know-how led to the problem.

Problem 2: Claims payment defaults of supplementary coverage items Problem 3: Improper processing of insurance policies

Emergence Between April 2002 and June 2005, in cases where basic insurance claims were paid for vehicle coverage and coverage Emergence When an agent sells an insurance product, he is supposed to Origins Problems with the We have worked to ensure thorough compliance of the for bodily injury liability as well as fire insurance coverage, there were 46,730 cases (as of November 20, 2006) in which of the explain important items about the product to which the cus- compliance system from employees and agents by holding group compli- problem items for consolation and rental car expenses, etc. (supplementary coverage items), were not paid. problem tomer should agree, after which the agent receives the pre- Reform initiative IV ance training for all employees and agents twice an- mium. However, some agents paid insurance premiums on nually, but a failure for all to fully understand the Response P As of November 20, 2006, the Company had completed payments of 46,178, or 98.8%, of the cases. the customer’s behalf and used seal impressions that were in necessity for compliance resulted in behavior that P The Company is continuing to investigate supplementary coverage items for which it is possible the Company should their possession to complete procedures for extending poli- was in violation of the law. have paid. cies, failing to properly process policies and explain important items to customers. Origins Problems with the P The Company’s system for properly handling insurance claims was inadequate in such areas as Problems with the Although the Company carried out the necessary in- management system system for respond- vestigations and confirmations related to improper the development of an insurance claims handling system to ensure that claims were paid in full Response In cases where procedures were improperly handled, the for handling claims P ing to complaints processing of policies using the customer complaint and the establishment of clear processes for properly explaining policies to customers. Company confirmed the terms and conditions of the policy V Reform initiative III Reform initiative database ( p. 25), the system for incorporating P Furthermore, the system for checking, verifying, and monitoring whether insurance claims were with each customer, making the necessary corrections to such complaints into a review of its operations was properly handled was inadequate. the policy according to each customer’s intention. inadequate. P The Company submitted a Notification of Misconduct to the Problems with Management left field surveys and the deliberation of countermeasures related to unpaid supple- Financial Services Agency (FSA) and is taking action against governance mentary coverage items to the Insurance Claims Handling Section and the system for internal au- Background Education and training of agents was insufficient, and due to concerns Reform initiative I individual agents in accordance with the Company rules. dits to verify that business was being operated properly was inadequate. about an adverse effect on the business, the Company did not thoroughly ensure that improper business operations would not occur. Background P Because the development of special coverage was not only spurred by consideration of customer needs, but also by competition with other insurance companies, the number of special coverage items ballooned, and products became Note: Notification of Misconduct: In cases where certain behavior interferes with the sound and proper operations of an insurance company, the Business Law and its enforcement regulations require that the insurance complex. This resulted in a situation in which agents and employees did not have a firm grasp of which items should company submit a notification to the FSA. be paid. P In addition, the Company assumed that claims were being paid properly, and due to the fact that information was not shared about the claims payment defaults, the Company did not have a clear understanding of the situation, and in- A basic attitude common to all three problems vestment of management resources in the development of a system to ensure the proper handling of claims was insuf- P Amid the intense product development competition following the deregulation of P In addition, the system for incorporating feedback from employees and agents— ficient. the insurance industry, the Company was not able to adopt a stance of giving the who have regular contact with customers—into business strategy and business highest priority to the interests and protection of its customers in the course of operations was insufficient, and the sharing of information with the entire Com- its product development, sales, and claims handling. pany, including management, was insufficient, with certain information critical to Note: Even in supplementary coverage claims cases in which customers have not paid charges, there are cases in which the Company will pay a fixed amount or fixed percentage. protecting customers remaining in a single department. 両観音中面③（特集）p.13 260mm × 205mm 両観音中面④（特集）p.14 260mm × 195mm

Drastic review of business operations Creating a New Vision of MSIG

Initiatives to be addressed Specific initiatives As part of the steady implementation of the Business Improvement Plan, the newly established New Vision Promotion Headquarters, headed by President Toshiaki Egashira, will create a New Vision of I The Company shall raise the trans- p The Audit Committee with a majority composed of outside directors has been established to verify parency of its management through a the propriety of overall business operations from a third-party perspective. MSIG (New Management Plan), with the aim of creating an MSIG that customers can trust. stronger internal verification system p Management shall be committed to discussing and examining such critical issues as customer pro- Furthermore, the Headquarters initiated the Create and Change Project to ensure full participation as well as third-party inspections. tection and new product development with customer protection in mind. of all employees and officers in the creation of a New Vision of MSIG. This project aims to create a com- (Reform of corporate governance) p The Corporate Quality Control Department has been established to verify whether operations are pany that is open and communicative and will collect suggestions from the Sales and Claims Handling properly executed by collecting information about each level of operations in the areas of product sections and incorporate them into a New Vision of MSIG. development, sales, and claims handling. p The Company has strengthened the independence of the Internal Audit Department and increased the number of audit personnel and strengthened the organization. Customer feedback Agent feedback II The Company shall engage in prod- p The Company shall systematically gather and analyze customer feedback collected from surveys uct development that reflects feed- given after the sale of products or after insurance claims have been handled and have a system for reflecting such feedback in its products. back from customers, agents, and Corporate Quality Control Department/Customer Service Department P K Meetings employees. (Reform of product de- p A detailed deliberation process has been established for all relevant Company sections; partnerships K Meetings, which got their name from the between relevant sections have been strengthened and shall have a more prominent role in the Japanese words for management (keiei) and velopment system) PWorkplace Meetings management of product development targeting general consumers. reform (kaikaku), which both begin with the letter “K,” refer to a series of meetings in New Vision Promotion Headquarters Workplace Meetings are held for employees p The Company has established a policy of developing a system for proper claims handling and shall which the Chairman, President, and officers in at every workplace to discuss improvements III The Company shall create a system based on customer and agent feedback that handle all of the coverage items and provide customers with clear explanations regarding claims charge of the Head Office have open and lively for ensuring the handling of claims discussions with employees from 189 nation- can be made to the Company as a whole as Create and Change Project and upgrade its system for re- handling. wide business sites about various topics. well as measures that should be taken at that workplace. sponding to inquiries and other p In addition to increasing the number of personnel in the Claims Handling sections, the Company shall review rules, manuals, and explanatory materials related to claims handling. Furthermore, it shall customer needs. (Reform of claim K Meetings Workplace Meetings payment administration system) create a system and databases for claims handling. p The Company has established the Claims Handling Examination Department, which shall centralize Proposals monitoring and verification of the validity of decisions made not to cover claims. The department shall regularly assess nationwide insurance claims handling offices to ensure that claims are being PProject Committee correctly and properly handled. Project Secretariat At Project Committee meetings, the Chair p The Claims Payment Examination Council, consisting of such third parties as outside attorneys, con- man, President, and officers in charge of the Head Office as well as representatives from sumer representatives, and medical experts who participate in the review of cases, shall engage in each region (Project Secretariat) discuss var- Reports/Deliberation preliminary reviews of significant cases where a decision has been made not to cover claims as well ious suggestions and proposals that have been made via the Proposal Project message as reviews of cases in which there is an objection registered after notice is given to the customer. board and K Meetings.

p The Company has established a claims payment objection office consisting of outside attorneys to Project Committee meetings ensure proper responses to customers’ objections. IV The Company shall ensure that p The Company has established the Compliance Department, which centralizes the management of compliance is the basis for busi- compliance issues related to insurance sales both in Japan and overseas, proposes policies for ness activities. (Reform of legal promoting compliance, and investigates and monitors insurance sales. Furthermore, the department Proposals compliance system) has carried out intensive compliance education for all employees and agents. Feedback p The evaluation systems for employees and officers as well as the Sales and Claims Handling sections have been revised with a focus on compliance. Sectional meetings by topic Section meetings by business V The Company shall value customer p The Company has established the Customer Service Department for the centralized management of Proposal Project Management/Control Life Insurance complaints and other customer feedback that will be used to improve operations. In addition, the P feedback and incorporate it into its The Proposal Project Corner has been estab- Corporate Quality Overseas Business Claims Handling Consulting Section has been established within the department to deal with inqui- lished on the message board of the Company management. (Reform of complaint Marketing Financial Services ries, provide advice, and handle complaints related to claims. intranet for employees to contribute propos- response system) als based on discussions at Workplace Claims Handling Risk-Related p The Council on Promotion of Customers’ Interests, consisting of a majority of outside experts, has Meetings. Human Resources/

been established to analyze complaints and other feedback as well as propose various policies Organization aimed at improving customer protection and convenience to the Board. Products Operations/Systems Investment Management 両観音表面内折り扉②（特集）p.10 260mm × 195mm 両観音表面（三井住友海上グループの経営）p.15 260mm × 205mm

measures and our new start Mitsui Sumitomo Insurance Group management

Strengthening corporate governance by more clearly Strengthening corporate governance defining management roles

To ensure stability and growth over the long term, MSI has posi- MSI has adopted the corporate auditor governance model and is tioned the further strengthening of corporate governance as one of working to improve corporate governance by strengthening the Drastic review of business operations and the creation of a new vision by all employees its most crucial management issues. The Company is actively functions of the Board of Directors and the Board of Auditors and engaged in initiatives to enhance its corporate governance. through proactive information disclosure. The Company holds to the basic view that it will fulfill its Moreover, to provide for fast decision making together with the The Company treats the recent administrative measures with the utmost seriousness responsibilities to its stakeholders by working to increase its cor- appropriate monitoring of management activities, the Company and has created the Business Improvement Plan, which undertakes a drastic review porate value under its Mission Statement and by ensuring that all has appointed outside directors, eliminated board member titles of its business operations to realize the five initiatives listed below. management and staff act in accordance with laws and regula- other than “director” (with the exceptions of the Chairman and tions under its MSIG Charter on Professional Conduct. President), and introduced an executive officer system. The objectives of these measures are to make a clear distinction between the roles of the Board of Directors, which are to make decisions I The Company shall raise the transparency of its management through a stronger internal regarding critical management matters and supervise the Group’s verification system as well as third-party inspections. (Reform of corporate governance) operations from an overall perspective, and the roles of the execu- II The Company shall engage in product development that reflects feedback from custom- tive officers, who have responsibility for the day-to-day conduct of ers, agents, and employees. (Reform of product development system) business activities, and to strengthen the respective function of III The Company shall create a system for ensuring the handling of claims and upgrade its directors and executive officers. system for responding to inquiries and other customer needs. (Reform of claim payment L The Company’s Corporate Governance Framework (As of September 1, 2006) administration system) P Auditors and the Board of Auditors General Meeting of Shareholders Auditors, in accordance with the auditing IV The Company shall ensure that compliance is the basis for business activities. (Reform P Board of Directors policies established by the Board of Auditors, Appointment Appointment Appointment of legal compliance system) The Board of Directors discusses and makes supervise the execution of duties by the decisions regarding critical management members of the Board of Directors, internal

V The Company shall value customer feedback and incorporate it into its management. issues for the Group as a whole and super- Board of control systems, and other matters by (Reform of complaint response system) vises directors and executive officers in the Board of Directors Corporate Auditors attending the meetings of the Board of execution of their duties. Directors: 11 Directors, examining important documents, Corporate Auditors: 6 Moreover, to secure transparency in man- (Including three outside directors) Audits Reports visiting the branches, conducting examina- agement, the Nominating Committee, the (Including three tions of subsidiaries, and other activities. Remuneration Committee, and the Audit Nominating Committee outside corporate Committee have been formed as internal auditors) Remuneration In addition, the Company is creating a New Vision of MSIG (New Management committees of the board to provide advice to and supervision

Committee Accounting Auditor the board. P Task-specific committees Plan) with the participation of all employees and has initiated the Create and Audit Committee Audits Task-specific committees discuss key man- Management decision making Change Project, which aims to create a company that is open and communicative agement issues related to the execution of operations and conduct exchanges of views and where employee suggestions are considered. among related divisions. The main commit- Appointment tees are as follows: and supervision Appointment Going forward, we will concentrate all our efforts on recovering the trust of custom- p Risk Management Committee ers and all stakeholders through the steady execution of the Business Improvement To promote and ensure strict adherence to comprehensive risk management, the Risk Plan in our aim to become a company that uses open employee discussion to effect Management Management Committee formulates risk Committee Task-Specific Committee Meetings management policies, monitors the status of continual changes made from customers’ perspective. Executive Officers over their implementation, discusses key issues, Reports Here, we will explain the details and status of initiatives related to the review of Senior Executive Officers, • Risk Management Committee and conducts other related activities. Managing Executive Meeting p Disclosure Committee our business operations as of September 30, 2006. P Management Committee Officers (in charge of Reports • Disclosure Committee Meeting To ensure appropriate disclosure, the The Management Committee conducts delib- respective divisions at • CSR Committee Meeting, etc. Disclosure Committee monitors internal In the future, the Company will disclose the status of its initiatives under the erations on critical issues regarding Group Head Office) business processes, evaluates the effective- Business Improvement Plan in news releases and on its Website. For details of the management, including management policy ness of information disclosure systems, and and management strategy. Executive endeavors to ensure the smooth conduct of Business Improvement Plan and the status of our progress after October 2006, Execution of operations Officers: 34 the disclosure process. (Including officers p CSR Committee please visit our Website at http://www.ms-ins.com. who are also The CSR Committee optimizes and improves directors) the overall balance of Company initiatives Internal Audit Department and carries out comprehensive progress management. Head Office, Reports Departments, Audit Department Audits and Branches Mitsui Sumitomo Insurance CSR Report 2006 10 15 Mitsui Sumitomo Insurance CSR Report 2006 Mitsui Sumitomo Insurance Group management/Ensuring compliance

and supervisory functions and is aiming for a high level of trans- Initiatives to further improve and parency in its activities. strengthen governance systems 2. Monitoring the suitability of business operating systems: Establishment of the Corporate Quality Control Department The Company seriously regrets the recent administrative measures Also on September 1, 2006, the Company established its Corporate taken against it by the government and is proceeding with initia- Quality Control Department. The roles of this department include tives to further improve and strengthen its corporate governance. collecting information through customer surveys and consumer ( p. 9: Announcement of administrative measures and our new interviews and conducting follow-up monitoring of the suitability start) of the Company’s business operations. Then, the department 1. Management systems appropriate to a company develops any necessary improvement strategies and administers adopting the committee model of corporate governance the implementation of those strategies. On September 1, 2006, MSI, as a company adopting the commit- 3. Improvement and strengthening of internal audit systems tee model of corporate governance, established its Audit The Internal Audit Department has been positioned under the Committee to join its existing Nominating Committee and Audit Committee to strengthen its independence. In addition, the Remuneration Committee, bringing the total of governance-related number of personnel assigned to internal auditing in the depart- committees to three, all of which have a majority of outside direc- ments in charge of internal auditing of claims handling and other tors. As a result, MSI has strengthened its management monitoring departments has been increased.

Ensuring compliance

Since its establishment, MSI has placed highest priority on compliance by all employees and officers and strengthening its internal control systems to ensure the sound and appropriate conduct of its activities. However, one of the facts that was cited as having led to the recent administrative measures against the Company was the inadequacy of the supervision of insurance agents in its sales activities. Accordingly, the Company has taken steps to improve its compliance systems. The following paragraphs report on these activities and the content of reforms aimed at ensuring compliance.

L Compliance promotion compliance of employees and agents as well as for the planning Previously, the department responsible for formulation of policies and implementation of operating rules related to insurance sales. related to compliance in insurance sales was separate from the The division of responsibilities within the Compliance Department department in charge of investigating and punishing actions in vio- is shown in the diagram below. lation of legal regulations, thus making it difficult to ensure compli- In terms of overseas compliance, the Overseas Compliance Team ance. To remedy this situation, compliance matters related to promotes compliance throughout overseas operations and monitors insurance sales have been centralized in the Compliance the status in overseas offices. The Company promotes compliance Department, thus making it possible from an organizational per- in its overseas operations by selecting and stationing compliance spective to decide on related policies quickly and accurately. This controllers and internal auditors at each of its overseas offices. department is responsible for measures and policies related to

Board of Directors Planning Team Agent Compliance Team Agent Registration Team Audit Committee Investigation Section

Compliance Department Regional Compliance Section Overseas Compliance Team

Mitsui Sumitomo Insurance CSR Report 2006 16 L Flow of compliance initiatives

Compliance Manual Compliance program MSIG Charter on Professional Conduct/ Compliance program Legal Compliance Rules Identification and analysis of improper conduct Compliance training Monitoring of the departments of the Head Office/ Training for newly appointed department managers and section Responding to complaints/Monitoring of departments heads/Group compliance training/e-learning sessions/Group train- and branches ing conducted by the Compliance Department/training for agents Compliance activities Inspection of agency operations/ Compliance program Compliance program semiannual comprehensive inspection/ inspection of operational management

L Compliance Program when such cases are identified, immediate action is taken. In addi- A “Compliance Program” is prepared annually to provide specific tion, during specified periods, compliance training is conducted for action plans for compliance promotion systems and training plans. all employees and agencies.

L Compliance Manual L Monitoring activities A Compliance Manual has been prepared P Monitoring through customer surveys and distributed to all employees and offi- In November 2006, the Company began to conduct surveys of its cers, based on the MSIG Charter on customers to determine whether agents are conducting their sales Professional Conduct and the Legal activities appropriately. In addition, the opinions and expressions Compliance Rules, that provides informa- of dissatisfaction among customers regarding agents and the tion on the laws that management and Company are used in initiatives to improve customer service. employees must comply with as well as explanations of specific examples. P Monitoring of branch operations The Regional Compliance Section is responsible for selecting L Inspections of operational management some of the Company’s branches among those nationwide, based (voluntary inspection) on the number of complaints received and incidence of improper In the marketing departments and claims handling departments, operations, and then conducting on-site inspections of the branch- voluntary inspections called “inspections of operational manage- es singled out for inspection. ment” are conducted, with the aim of managing and preventing legal violations and processing errors. The results of these inspec- L Compliance training tions are supervised centrally by registering them on the Company Training programs for agents and employees are planned and con- intranet system on a monthly basis. The Compliance Department ducted on an annual basis. monitors on a Companywide basis the number of improper opera- In fiscal 2006, staff of the Head Office conducted inspection tions, their nature, and remedial actions that were taken. tours in the Company’s offices nationwide, with the aim of making reforms in the awareness and behavior of Company employees, L Compliance Month holding Employee Compliance Explanation meetings on 48 occa- In addition to the monthly voluntary inspections mentioned above, sions. In addition, the frequency of training for agents was the Company twice yearly designates a Compliance Month when increased from the previous once to twice annually, and the con- emphasis is placed on taking remedial actions for certain high pri- tent of the training program included specific examples of activi- ority items. During these periods, a thorough check is conducted to ties that are forbidden and the punishments meted out to determine whether any improper operations have been overlooked violators. in day-to-day activities and in the voluntary inspection activities;

17 Mitsui Sumitomo Insurance CSR Report 2006 Ensuring compliance/Information management systems

Information management systems

Proper management and Preparing organizational structures and protection of customer information guidelines for information management

Protecting our customers’ personal information is a crucial issue in At MSI, the officer in charge of the Shareholder Relations & Legal the fulfillment of our social responsibility and the execution of Department acts as the executive officer for information manage- continuous and stable corporate activities. At MSI, we conduct our ment and is responsible for promoting initiatives related to the operations in compliance with the Personal Information Protection management of information. In addition, the departments in the Law and other related regulations, and, through the preparation Head Office work together with the Shareholder Relations & Legal and implementation of internal regulations as well as enhance- Department to upgrade information management systems and ments in our information systems, we work to properly manage promote related initiatives, including responding to the require- and protect customer information. ments of the Personal Information Protection Law, preventing leak- We obtain customer information only for clearly specified pur- ages of information, and other issues. poses according to legal and proper methods and make use of Moreover, the general managers of departments and branches such information solely within designated limits. To reduce the risk have been designated as the information control officers, and the of information leakage, we optimize the amount of information managers of sections and subsidiaries have been appointed as the that we retain, and information is destroyed through safe and information supervisors. These officers and supervisors are respon- secure methods when it is no longer needed. Moreover, informa- sible for providing guidance to the employees under their manage- tion that is judged to be needed for the conduct of operations and ment and to agents. In terms of rules and is designated to be “Necessary Information” is managed with regulations, within our risk management utmost care based on rules and regulations established at each policies, we have specified basic policies management level. In addition, to ensure that customer infor for preserving the safety of information mation is handled according to strict standards, we conduct vari- assets. Similarly, we have specified the ous types of inspections and audits of information management items requiring compliance within our activities. information management regulations and other related regulations as well as in P Inspections and audits for proper customer information operational manuals. management (1) Monthly inspections Increasing awareness of Information control officers (the heads of sections, branches, and customer information management subsidiaries) personally conduct inspections on a monthly basis within the organizational units they are responsible for to deter- In addition to putting regulations and systems in order, increasing mine whether internal information management rules are being the level of awareness of each and every employee of customer followed. information management is extremely important. To this end, we (2) Internal audits of information management activities work to make all employees thoroughly familiar with internal regu- MSI prepares an Internal Audit Policy on an annual basis. Auditing lations through education and training, by reminding them of this of information management affairs is one of the items to be audit- knowledge, and conducting checks on compliance with internal ed within internal control systems, which also include risk man- regulations. agement and compliance systems. Going forward, we will be working to further increase the overall level of understanding of information management, mainly through efforts to raise the degree of awareness even further, conduct educational and training programs, and implement inspections and audits. The objective of these activities will be to ensure the appropriate management and safekeeping of customer information. Mitsui Sumitomo Insurance CSR Report 2006 18 CSR activities

Our extended family and CSR activities in fiscal 2005 Business partners Non-life insurance surveyors: 60 companies Partner attorneys: 446

MSIG’s business activities depend on the support of stakeholders, which include customers, shareholders, and local communities. The Specialists and business partners who possess various kinds of technological capabilities and know-how support our business in providing customers with security and safety. We develop together by maintaining fair and honest business relationships. Company has carried out the activities described below, with the aim of fulfilling its social responsibilities, thus earning the trust of all of its stakeholders. (Figures are as of March 31, 2006.) L Attorneys L Non-life insurance surveyors When a Japanese company becomes the target In the event of an accident, these companies evaluate loss or dam- of an overseas product liability suit, we respond age, and investigate the causes and circumstances of the accident. A with the help of attorneys who possess abun- relationship of mutual trust is crucial to maximizing their capabilities. dant experience. Customers Total number of customers: 19.9 million

Our job is to provide our customers with security and safety that satisfy their needs. We do our utmost to provide the very best products and services. Employees MSI: 13,458 MSIG: 25,000* L Anshin-Station L Audio pamphlets The Anshin-Station takes cus- We have enhanced our product pamphlets The work of each and every one of our employees makes up MSIG’s business. We work to realize a workplace that is conducive to work and keeps the employees who support us motivated. * (MSIG, including overseas affiliates) tomer calls regarding acci- with SP codes, which allow visually impaired dents throughout Japan 24 and elderly customers to learn about our insur- L Next-generation human resources strategy L Internal trainee program hours a day, 365 days a year. ance products via an audio recording. MSI and We aim to be a company where all MSIG employ- We have piloted a training program whereby employ- Dedicated staff members pro- Mitsui Sumitomo agents have donated SP ees share our values, are motivated in their work, ees can acquire practical experience in the opera- vide customers with quick and code creation software and devices that read feel as if they are growing, and work enthusiasti- tions of sections where they have never worked, caring service. SP codes to the councils of social welfare. cally with a sense of satisfaction. thereby facilitating communication between sections and supporting employee career development. MSI Group Shareholders Total number of shareholders: 52,062 Local communities Number of branches that engaged in social We endeavor to use the capital entrusted to us by our shareholders as efficiently as possible, with the aim of increasing profits and providing and the international community contribution activities in fiscal 2005: 179 shareholders with a return. We respond to shareholders’ expectations by raising our corporate value and appropriately returning profits to them. As a corporate citizen, our natural duty to society is to build strong relationships in each country and community in which we work and contribute to our mutual development. We engage in activities that are rooted in and contribute to local communities and the international community. L IR meetings L New email delivery service We hold Company information seminars, We have a new email delivery service in Japanese and L Support for employee volunteer activities L Social contributions by individual workplaces or IR meetings, twice a year for institu- English so that shareholders properly understand MSIG’s Information about volunteer oppor- Every year, each branch office selects one person to be a tional investors and analysts from secu- position. Please register your email address at our tunities is posted on the Company Social Contribution Supporter, who promotes social contri- rities firms to deepen their understanding Website. intranet. The Company operates bution activities, and aims to have one social contribution of the Company. the Dolphin KIDS project in con- activity a year. In fiscal 2005, 87.7%, or 179, of branches junction with Asahi Breweries, Ltd. engaged in social contribution activities.

Agents Number of agents: 59,126 Business sites with ISO 14001 certification: The agents that have direct contact with customers are indispensable business partners. We work together to fulfill our responsibilities to customers, cooperat- Environment 347* ing with agents and aiming for mutual prosperity to gain customers’ trust. Business activities invariably have an impact on the global environment. We promote corporate activities aimed at global environmental protection so that future generations will inherit our irreplaceable earth. * (MSIG, including overseas affiliates) L Regular meetings with agents L Anshin Otodokebin We have regular meetings with agents To help agents fulfill their most important role— L Indonesia Reforestation Project L Social and Environmental Green Evaluation System to support their business growth, and close communication with customers—we pro- MSI has initiated reforestation activities in The Surugadai Building received an Excellent Stage 3, the we work in partnership with them to vide agents with a support tool that sends cooperation with Indonesia’s Ministry of highest certification given under the Social and raise customer satisfaction. customers direct mail or facsimiles by computer. Forestry. We are supporting the activities of Environmental Green Evaluation System (SEGES) of the local citizens and have planted approximately Urban Green Space Development Foundation, for its signifi- 100,000 trees over 109 hectares so far. cant social and environmental contribution.

19 Mitsui Sumitomo Insurance CSR Report 2006 Mitsui Sumitomo Insurance CSR Report 2006 20 Responsibility to customers

Aiming to be a company that listens to its customers and is constantly enhancing its services

Following the administrative measures against the Company in June 2006, we have returned to the basics of the insurance business and pledged to “explain our products and services clearly to our customers and to pay insurance claims properly.” At present, we are implementing reforms to ensure all our business activities put the first priority on the customers’ perspective. We are doing our utmost to recover the trust of customers, and, while listening to our customers, we are constantly endeavoring to reform and enhance Staff of our Anshin-Station acci- our products and services. dent call center respond to customer inquiries.

We began to issue product pamphlets in voice-recorded form in fiscal 2005. MSI has become the first company in the insurance industry to introduce product pamphlets for automobile and other types of insurance in voice-recorded form. These are issued in “SP Code”— a high-density, two-dimensional encoding system—and enable our customers who are visually challenged persons or senior citizens to confirm the details of our products aurally. The recorded pamphlets are read by a dedicated device called “Speechio” (Please refer to the photo on the far right.), which then reproduces the content of the product pamphlets aurally. In April 2006, to promote the wider use of the SP Code, MSI and the Mitsui Sumitomo Agents’ Association donated Speechio units and SP Code software to the prefectural councils of social welfare. ( p. 34) In the interest of offering product information to an even broader range of customers in the Living FIT product pamphlet Speechio years ahead, we are stepping up our efforts to issue voice-recorded product pamphlets. * “Speechio” and “SP” code are registered trademarks of KOSAIDO Co., Ltd.

Many physically challenged persons do not know where to find information and have drawn Rie Tsuda the incorrect conclusion that they cannot take out insurance policies. Since I have had expe- Administrative Leader, the Agent Sales Promotion riences like this myself, this time we have included details not only on product information Team, Marketing & Sales delivered in the form of recorded pamphlets but also on our Website and our Customer Promotion Department Helpdesk. Regardless of age or physical disabilities, we want to do our very best to deliver [Member of Team WITH] information to our customers. ( p. 40)

21 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to customers

Reassuring customers and encouraging insurance policyholding

We use our nationwide marketing network to foster L Use of proper procedures in the sales process a thorough understanding of insurance and to reassure customers and encourage insurance policyholding. When agents sell insurance products, they are supposed to explain the key features of these policies to customers and receive We have established a nationwide marketing network comprising premiums, but in some cases the procedures are not carried out 132 sales departments and branches, 729 sales sections and sub- properly. For this reason, we are checking to be sure that impor- branches, and approximately 59,000 agents, all dedicated to provid- tant items were fully explained to customers in a proper fashion. ing consulting on insurance that gives security and safety and to ( p. 9: Announcement of administrative measures and our new meeting the needs of the individual customer. start)

L Making insurance product explanations easy to understand L Making the insurance sales contract process paperless When preparing our insurance product pamphlets, we make spe- and cashless with “Mobile MS 1” cial efforts to make the product explanations easy to understand MSI has adopted a contract processing system, Mobile MS 1, by taking the opinions of our customers into account and other which makes it possible to handle the insurance contract process measures. The automobile insurance pamphlet we issued in from application to the payment of insurance premiums electroni- August 2006, for example, was especially designed in a wide rect- cally. This system, therefore, achieves paperless and cashless angular format to enable customers to understand the contents of operation. Features of the system include the following. various coverage items. (1) Accurate estimates of insurance premiums can be made in a matter of seconds. (2) Mobile MS 1 makes it possible to enter an L Our policy on solicitation electronic signature to complete the contract process. We base our policy toward solicitation on the Financial (3) With a cash card and the Mobile MS 1 unit, Instruments Sales Law, which was implemented on April 1, 2001. registration can be made for account debit set- tlements (immediate deduction from accounts) and account transfers. (4) Contract information and data are transferred Mobile MS 1 Solicitation policy immediately to the MSI computer system, and an insurance certificate is mailed to the customer the following day. 1 The Company shall strive to carry out appropriate sales activities that are in accordance with the Insurance Business Law, the Financial Instruments We introduced cashless processing using account debt settle- Sales Law, and other relevant laws. ments and account transfers for our life insurance policies in

2 The Company shall strive to acquire knowledge, encourage research, and August 2005. provide easy-to-understand explanations so that every customer fully understands the content of its products. L Management of customers’ personal information 3 The Company shall strive to ensure that customers select the products Protection of customers’ personal information is a major issue that best suited to their intentions and circumstances, taking into consideration their knowledge of the products, reasons for purchasing the prod- we must address to fulfill our social responsibilities. We have ucts, and financial situations. included policies for the management of information asset risk 4 The Company shall strive to provide accurate information so that custom- among our risk management policies and are working to ensure ers may make judgments and take full responsibility for transactions the appropriate management and protection of customers’ person- involving products that may be significantly affected by market trends. al information. 5 The Company shall strive to undertake its sales activities from a customer standpoint, taking into full consideration the time and place and other factors.

6 In the event an insured customer is involved in an accident, the Company shall strive to quickly and accurately pay out the appropriate insurance award as stipulated in the policy.

7 The Company shall strive to develop and provide products that take into account customer comments, requests, and other feedback.

Mitsui Sumitomo Insurance CSR Report 2006 22 Our comprehensive claims handling assures security.

Even though insurance is not a tangible product, our comprehen- In Japan: Offering quick solutions sive claims handling service is what makes insurance coverage and courteous customer support “real” to our customers. Since fiscal 2005, we have been working to make further improvements in this system, and, along with our From the time the accident is reported to the final payment of drive to improve the functions of the system, we are also striving claims, the claims handling process is followed by our systems, to enhance the educational and training environment for our making it possible for us to provide all-important reports to cus- employees so that customers who encounter accidents think, “I’m tomers, including progress toward final settlement. glad we chose MSI’s insurance policies.” P Reform of claims handling process To make insurance payment more quickly, beginning in fiscal 2005, our initiatives included introducing new systems and upgrading the capabilities of our image transmission system.

P National telephone role-playing contest In Japan: Claims handling network In February 2006, 40 employees of our claims handling sections nationwide participated in a national telephone role-playing contest. Since much of the communication with our customers is via the telephone, improving telephone conversation skills is extremely important. For each of us to put customers at ease when com- Whenever or wherever our customers encounter an accident, we municating with them on the telephone, we are taking the initiatives to improve our telephone communication skills. put ourselves in our policyholders’ shoes and our network responds promptly with a human touch.

P Comprehensive claims handling services (As of April 1, 2006) Claims service center 256 centers nationwide network 6,600 (300 staff were added in fiscal 2005 and another Overseas: Our global network provides support Expert staff 600 are scheduled to be added in fiscal 2006) even for accidents overseas Affiliated attorneys 446

P Accident call center (Anshin-Station) MSI has arrangements with claim agents and attorneys around Auto accident report center: 0120-258-365 the world and is well positioned to act quickly in response to acci- Fire (non-auto) and other accident report center: 0120-258-189 dents overseas.

Staff are available 24 hours a day, 365 days a year, at our accident call center P Overseas travel insurance (Anshin-Station) to respond to reports of auto accidents, fires, and other accidents. Through a tie-up with one of the world’s leading assistance companies, we offer For accidents on weekday nights or holidays, our Anshin-Station expert staff pro- our Emergency Medical Assistance Service 24 hours a day, 365 days a year, in vide quick-response services until 10 P.M. and, at customer request, can contact Japanese and have a wide menu of services including our Cashless Medical other parties in auto accidents, arrange for replacement vehicles, and alert medical Service that allows policyholders to receive medical treatment in hospitals without facilities. the need for cash. We also offer insurance-related consulting services in Japanese for dealing with various kinds of accidents via a toll-free number and collect call. P Claims handling for quick relief following major disasters When major disasters occur, including typhoons, heavy rainfall, and earthquakes, P Cargo insurance we offer quick-response services for claims handling and offer the exact insurance Damage to cargos is often discovered after they reach overseas locations. To pro- payments that customers need. Depending on the scale of the disaster, we are pre- vide sincere, courteous, and rapid services to customers to help them deal with pared to offer backup services on a Companywide basis. accidents, we make use of the services of experienced claim agents and surveyors around the world. In addition, we have Japanese staff stationed in the Americas, Asia, and Europe and have established a highly effective claims handling services network.

P Overseas product liability insurance Even in cases where Japanese companies become involved in product liability lawsuits overseas, we can respond by drawing on the services of our network of law- yers and claim agents who have considerable international experience in handling product liability cases. Especially in North America, where there is a trend toward exceptionally large damage claims, MSI mounts a unified defense against such lawsuits through MSI Claims (USA) Inc., a company specializing in responding to Claims handling room for typhoon 13 (Fukuoka) damage suits.

23 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to customers

Listening to our customers and reflecting their views in our activities

Listening directly to our customers Reflecting the views of our customers in development through our “Customer Desk” and improvement of products and services

Within the Customer Service Department, we have established the L Implementation of customer surveys Customer Desk, which is responsible for listening to the views of To increase customer satisfaction, we conduct a number of cus- our customers directly via toll-free telephone, facsimile, and the tomer surveys among our customers to gather their views regard- Internet. The toll-free number for contacting the Customer Desk is ing our products and services. In these surveys, we cover not only shown on the back of insurance policy certificates and our pam- the range of products and services that customers are already pur- phlets, and customers make direct contact with us to make inqui- chasing from us but also ask customers who have experienced ries, receive advice, and register complaints. accidents and filed claims for payment for their opinions regarding the content of our services, including the speed of our response L Customer Desk following accidents and attitude of our staff. We then make use of In April 2006, we set up our second Customer Desk in Kobe, after this information to give customers a better response in the future. the already existing one in Tokyo. This second desk has substantial- ly increased our capabilities for responding to customers and P Policyholder questionnaire improving our services. By establishing the second Customer Desk, Overall, with regard to MSI you are: 3.7% 0.6% in the event one desk ceases to function during a disaster or under Fiscal 2005 17.4% 63.6% 14.8% 3.7% 0.4% other circumstances, the remaining desk can provide backup. Fiscal 2004 17.8% 62.8% 15.3% 4.6% 0.6% Fiscal 2003 20.1% 59.9% 14.8% P The telephone number for contacting the Customer Desk is 0120-63-2277, and 5.5% 0.6% the facsimile number is 03-3615-8237. Fiscal 2002 16.3% 63.1% 14.5% (This service is toll-free and is available from 9:15 to 20:00 on weekdays and 0 20 40 60 80 100 (%) from 9:15 to 17:00 on weekends and holidays.) L Extremely satisfied L More satisfied than dissatisfied L More dissatisfied than satisfied L Extremely dissatisfied L Not sure P Itemized inquiries and requests for advice we received from customers:

Other matters 8.4% L Conduct of group interviews In fiscal 2005, to offer products that better meet customer needs Inquiries related to Inquiries about insurance accident 13.9% products and insurance and create pamphlets that are easier to understand, we conducted Total premiums 31.6% 195,160 interviews with groups of our customers. During the preparation of Cancellations 10.1% (Fiscal 2005) a pamphlet for an automobile insurance product that we began to Requests for information Matters related to about the content market in August 2006, we showed trial versions to groups of cus- changing contracts 13.1% of contracts 22.9% tomers and received their comments, which, in turn, were reflected in the final version of the pamphlet. We intend to continue to L e-Customer Center ask the views of our customers proactively to make our products Our e-Customer Center provides the following services 24 hours a and services more understandable to them. day, 365 days a year to our customers after confirming their ID and password. As of August 2006, we had approximately 110,000 IDs registered in our database. (1) Access to information on contracts (2) Changes in contract items, including addresses; changes in vehicles insured and in coverage; requests for issuance of certificates for insurance deductions

P URL for the Mitsui Sumitomo Insurance Website MOST for the Home pamphlet http://www.ms-ins.com

P URL for the Mitsui Sumitomo Kirameki Life Insurance Website http://www.ms-kirameki.com

Mitsui Sumitomo Insurance CSR Report 2006 24 L Sharing the comments of customers and agents throughout the Company Dealing with our customers sincerely To share the ideas and know-how of all MSIG employees, we have established a special bulletin board on our intranet with the title, MSI has thus far compiled complaint databases; however, from the “Let’s talk about CSR.” Employees post their suggestions for perspective of protecting our customers, because the systems for improvements and information on consultations and suggestions finding important information on customers were not sufficient, we of our customers and agents. Departments of our Head Office then were unable to share information sufficiently. This led to such prob- take the initiative in using this information in developing and lems as inappropriate nonpayment of claims for whole life medical improving products and services. insurance and other third-sector products. To address this problem, Following the recent administrative measures against MSI, this we formed the Customer Service Department to be the central unit bulletin board has been used as a tool for formulating solutions to in charge of managing and analyzing complaint information. Going various problems by drawing on the capabilities of MSI employ- forward, we will regard customer complaints as “important informa- ees. All employees express and share their ideas via this platform, tion to be used in reforming our operations.” By analyzing the back- and this is helping to facilitate the steady implementation of MSI’s ground of these complaints, we will develop improvement strategies Business Improvement Plan and preparation of a New Vision of for policyholder protection and benefits. ( p. 9: Announcement of MSIG (New Management Plan). ( p. 9: Announcement of admin- administrative measures and our new start) istrative measures and our new start)

P Analysis of background of complaints (Fiscal 2005) P Analysis of complaints (Overall) L Internal campaign to increase customer satisfaction (CS)

Other 4.3% Our sales and claims handling sections conducted an “Improving Management of customers’ personal information 2.6% Customer Satisfaction” campaign in fiscal 2005. In our sales sec-

Contracts/sales activities tions, staff prepared a list of 11 “CS Indicators” based on the con- Attitude 4.6% (Note 1) 19.7% Total number tent of consultations with customers and the complaints voiced by of complaints 9,523 customers. The sales sections are working with agents to improve Insurance claim payments 31.9% Management and safekeeping their performance as measured by these indicators, and steady of contracts (Note 2) 36.9% progress is being made. In addition, the claims handling sections have prepared “CS Indicators” that quantify CS and are taking

P Complaints about sales of insurance products specific initiatives to raise their performance in this area.

Other 1.3% Sales activities/ underwriting of contracts P Sales section CS activities 9.3% The complaint most frequently voiced by our customers, accounting for 25% of Changes of address/ complaints received, is “the insurance policy has not been delivered.” With the cancellations 21.5% goal of making sure that an accurate policy arrives in the customer’s hands before Total number Renewal/continuation of such complaints of contracts 24.0% the policy period begins, the average number of days for preparation of insurance 5,393 policies has been included in the 11 “CS Indicators.” As a result of efforts that Sending of policies Insurance products/ began in 2003, we have been able to shorten the time needed for the delivery of 42.5% pamphlets 1.4% policies by two days.

P Claims handling section CS activities To encourage staff to put themselves in our policyholders’ shoes and provide P Complaints about insurance payment prompt claims handling services with a human touch, we have also included an indicator for claims handling services and implemented it in fiscal 2005. We conduct questionnaire surveys to allow our customers to evaluate “the attitude and manner of the MSI employee in charge” and “the promptness of claims payment (period of concluding payment),” then reflect the results in a CS indicator.

Improper handling, Total number Complaints related to etc. (Note 3) 59.5% of such complaints evaluation of damages 3,035 40.5%

Notes: 1. Improper payment of premiums, complicated procedures, etc. 2. Improper delivery of insurance policies, content of policies differs from the contract, etc. 3. Inadequate explanation, improper manner of personnel, etc.

25 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to customers

Helping customers to run their business activities smoothly

L ”I Stop“ campaign Offering risk management services MSI regards ”the implementation of traffic accident prevention useful for business activities activities“ as part of its social responsibilities. In fiscal 2006, we began to conduct our ”I Stop“ campaign, which is aimed at encour- InterRisk Research Institute & Consulting, Inc., one of the Group aging drivers to make sure they obey stop signs and thereby help companies of MSIG, offers customers top-quality risk management to reduce the number of traffic accidents. As part of this campaign, solutions by combining the information in its database on acci- we worked with our agents to distribute flyers and stickers and dents compiled through many years of experience in the non-life offered an advisory service for safe driving. ( p. 34) insurance business and accident prevention know-how with its advanced research and practical consulting capabilities.

L Support for CSR activities MSI’s abundant experience and know-how We offer consulting tailored to the needs of our customers relating recognized internationally to the structuring of systems for promoting CSR activities and compliance, preparation of internal guidelines for action, training L Received ”2005 Underwriting Team of the Year“ award for employees of client companies, and other services. In December 2005, MSI’s Marine Underwriting Department During fiscal 2005, we handled 57 consulting projects and seminars. received the ”2005 Underwriting Team of the Year“ award at the Insurance Day Awards ceremony held in the United Kingdom. The L Support for structuring risk management systems award was granted in recognition of the fact that we have been We provide support to companies to help them strengthen their the leading Japanese company in the marine insurance field since risk management systems, including suggestions for optimal risk its establishment in 2001 and have maintained a high rate of management policies based on the identification of risks, analysis growth and stable earnings. The Company was also recognized for and evaluation, and the prioritization of risks. the high-quality, global services it offers to its customers. This During fiscal 2005, we handled 273 consulting projects and seminars. was the first time for a Japanese non-life insurance company to receive this award. L BCM (business continuity management) consulting As the officially appointed representative in Japan for the Business Continuity Institute, we offer top-quality information and consulting services in this area. During fiscal 2005, we handled 90 consulting projects and seminars.

L Assistance in complying with the Personal Information Protection Law We convene seminars and perform consulting projects related to Insurance Day Awards ceremony assisting our clients in complying with the Personal Information Protection Law. In addition, we prepare various types of related L Received award as the ”Best Trading Company in Asia“ reference materials and take initiatives to prevent violations of for second consecutive year the law. In February 2006, MSI received the ”Best Trading Company in Asia“ award for the second consecutive year from the U.K. During fiscal 2005, we handled 80 consulting projects and seminars. Environmental Finance monthly magazine. MSI received high L Periodic publications marks overall and was cited especially for its position as the mar- We publish a range of books and pamphlets periodically to support ket leader in Japan in the field of weather derivatives and for our business customers and other clients. being a major player in the Asia-Pacific that is actively expanding its operations globally.

Mitsui Sumitomo Insurance CSR Report 2006 26 Responsibility to shareholders

Striving for a relationship of deep trust with our shareholders

MSIG will provide its shareholders with accurate information about the status of its business and business strategies in a timely manner. Furthermore, it is committed to obtaining their important feedback through meetings with institutional investors and surveys of individual investors.

2006 Information meeting

Visitors to the MSIG Website can elect to receive news emails from us. At present, our news emails, sent to domestic recipients in Japanese and overseas recipients in English, have many subscribers around the world. How to register to receive emails: Information about the failure to pay insurance money and the resulting adminis- Go to the MSIG Website R Investor Relations R Email trative measures, both incidents that took place in Japan, was quickly disclosed in Entry English on our Website and was also sent to shareholders in an English-language Register your email address. email. (Your email address is the only information you need to register.) Negative information is something that should not exist in the first place, but we will continue to disclose news in a timely and truthful manner to overseas shareholders, investors, and other stakeholders who have registered to receive our emails.

We endeavor to reach all of our contacts—encompassing shareholders, investors, and analysts—with timely and correct information about the state of MSIG’s business and business strategy. If more of our domestic and overseas shareholders, investors, and other stakehold- Kiyotaka Nakano, General Manager, ers register for our email delivery service, we will be able exploit it to its fullest potential as a Investor Relations bridge of communication between the Company and you. We eagerly await your registration. Department

27 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to shareholders

Responding to the trust and expectations of our shareholders and investors

Stressing the importance of communicating with We aim for the timely delivery of fair shareholders and investors through IR activities and easy-to-understand information.

L Aggressive investor relations (IR) activities L Information releases follow In holding Informational Meetings for institutional investors and our information disclosure policy brokerage analysts twice annually and attending various invest- To allow shareholders, investors, and other stakeholders to better ment forums held by securities firms to give the same lectures, we understand and make investment decisions with regard to the MSI are taking advantage of opportunities that ensure that a greater Group, we have developed and announced our disclosure policy number of people understand our strategies. for the prompt and fair distribution of information.

L Toward higher corporate value L Using our Website For fiscal 2006, we have set a goal of raising corporate quality, In addition to accounting information, one can access such printed which is the basis not only for IR activities, but all of the materials as business reports and financial statements, the English- Company’s activities. This will increase the transparency and language version of annual reports, and Japanese-language disclo- strength of our business operations, and we believe that raising sure reports as well as view video recordings, in Japanese or corporate quality is directly linked to raising the Group’s corporate English, of biannual Informational Meetings. It is also possible to value. read presentation materials and Q&A pages. We are continuing to work on the Website, taking a user’s perspective in making it easy L A part of socially responsible investment (SRI) to read and creating the page design, working on the possibility of Socially responsible investment (SRI) is generating interest as a voice recognition for those with impaired sight, and responding to type of investing that selects stocks based on environmental and the ever-changing Internet environment. In fiscal 2006, we plan to social initiatives rather than financial data alone. The Company’s further enhance the Website’s content and improve its usability. stock was listed on the SRI index developed by U.K.-based FTSE and Belgium-based ECHIBEL as of September 2006. We plan to continue to honestly answer questions from domestic and overseas ratings institutions, thus enhancing transparency and fulfilling our responsibility of giving proper explanations to shareholders, investors, and other stakeholders.

L Our shareholders (as of March 31, 2006) MSI is unique in that foreign shareholders comprise 40.2% of its URL to the Shareholders/Investors section of our Website: http://www.ms-ins.com/ir/index.html shareholders. This is attributable to the fact that we have disclosed financial information in accordance with U.S. accounting standards L Shareholder returns since the 1980s and have engaged in vigorous expansion of IR Since the Company’s foundation in fiscal 2001, it has bought back activities overseas. Looking ahead, we plan to step up efforts to approximately 88 million of its own shares worth approximately maintain a loyal base of long-term individual shareholders. ¥74.0 billion. Efforts aimed at achieving a target set at the time of the Company’s founding of reducing the number of shares 10% by 2010 are progressing. In fiscal 2003, dividends increased ¥1 per share, to ¥8.5, and in fiscal 2004 a special dividend of ¥1 per share brought dividends up to ¥9.5 per share. In fiscal 2005, we made a further increase in dividends of ¥3.5 per share for an annual total of ¥13. Interim dividends paid in fiscal 2005, an industry first, garnered praise from shareholders.

Mitsui Sumitomo Insurance CSR Report 2006 28 The Mitsui Sumitomo Insurance Group at a glance

L Financial highlights

Net premiums written Consolidated Ordinary profit Consolidated (Unit : Yen in billions) (Unit : Yen in billions) 1,407.3 1,464.1 1,500 1,379.1 200 174.9 1,234.8 1,303.9 1,200 150 127.7 900 100 87.5 62.5 600 50 49.5 300 0 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005

Net income Consolidated Net expense ratio Non-Consolidated (Unit : Yen in billions) (Unit : %) 80 77.7 71.6 65.7 40 60 36.0 32.8 40 35 18.9 20 32.2 33.8 31.2 30.9 0 30 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005

Net loss ratio Non-Consolidated Net interest and dividend income Non-Consolidated (Unit : %) (Unit : Yen in billions) 65 150 136.9 63.8 129.2 116.8 114.3 110.4 59.9 120 60 57.3 90 54.9 60 55 55.0 30 50 0 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005

Net income per share Consolidated Shareholders’ equity per share Consolidated (Unit : Yen) (Unit : Yen) 1,427.17 60 53.94 1,400 45.51 50.27 50 1,200 40 1,000 963.51 30 869.82 1,021.13 717.74 20 14.44 800 22.46 10 600 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005

Disclosure policy that customers, shareholders, investors, and others can accurately grasp and The Company has adopted a disclosure policy governing information on disclo- appraise the situation of the Mitsui Sumitomo Insurance Group. sure-related activities. 2 Disclosure standards 1 Basic policy In line with the basic policy described above, Mitsui Sumitomo Insurance has Since the 1996 revision of the Insurance Business Law, deregulation and regula- prepared in-house standards* for information disclosure. In accordance with tory relaxation measures have made Japan’s non-life insurance industry increas- these standards, the Company is speedily and fairly disclosing useful informa- ingly diverse with respect to products, prices, and services. Amid the tion that facilitates the contract- and investment-related decision making of increasingly large and rapid changes that this trend has brought about, the customers and investors. importance of timely and accurate corporate information disclosure has risen *Principal types of information covered by in-house disclosure standards: still further. The standards cover information related to corporate management, products and services, investments, Regarding Mitsui Sumitomo Insurance’s information disclosure, the Company asset-liability management, risk management, corporate performance, reinsurance, overseas business, has, since July 2002, prepared and disclosed the MS Quarterly Report on its computer systems, social contributions, environmental protection, and Group companies. business performance and other topics. Moreover, in July 2003, it became the 3 only member of Japan’s non-life insurance industry to disclose consolidated per- Means of disclosure formance figures on a quarterly basis. In these and other ways, the Company has Through information disclosure activities involving such diverse media as disclo- been a leader in its industry. In the future, Mitsui Sumitomo Insurance intends to sure pamphlets, news releases, and its Website, Mitsui Sumitomo Insurance is proactively and speedily disclose information with the goal of ensuring striving to ensure that it provides information to customers, shareholders, investors, and other interested parties in a fair manner.

29 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to shareholders

L Building the New Vision of MSIG have promptly begun taking measures in line with this plan. with full participation from all employees ( p. 9: Announcement of administrative measures and our new In April 2005, MSIG established its long-term vision, “Challenge start) 10,” with the target of becoming a global leader among insurance In addition to steadily implementing the Business Improvement and financial groups by 2010. A medium-term management plan, Plan, the Company will develop a New Vision of MSIG (New “Stage I” of Challenge 10, focused on improvements in growth, Management Plan) with the participation of all employees to profitability, and corporate quality in fiscal 2005 and 2006. effect drastic change. We are revisiting our Mission Statement However, as a result of the administrative measures we and Charter on Professional Conduct in our aim to be a company received on June 21, 2006, we formulated a Business Improvement that is committed to the customers’ perspective, thereby develop- Plan and, realizing that ensuring the execution of this improvement ing a new corporate culture. plan is critical to recovering people’s trust, all Group employees

L Overview of MSIG Through comprehensive Group capabilities, we will support our customers in a full range of activities and businesses.

Overseas business Financial services business Sumitomo Mitsui Asset Management Overseas Co., Ltd. business http://www.smam-jp.com MITSUI SUMITOMO INSURANCE Non-life Financial Venture Capital Co., Ltd. Non-life insurance business insurance business services business http://www.msivc.co.jp Mitsui Sumitomo Insurance Co., Ltd. Consolidated Group management http://www.ms-ins.com

Life insurance Risk-related Risk-related business business business InterRisk Research Institute & Life insurance business Consulting, Inc. Mitsui Sumitomo Kirameki Life Insurance Co., Ltd. http://www.irric.co.jp http://www.ms-kirameki.com MITSUI SUMITOMO INSURANCE Mitsui Sumitomo MetLife Insurance Co., Ltd. Care Network Co., Ltd. http://www.msi-metlife.com http://www.msk-carenet.com American Appraisal Japan Co., Ltd. http://www.american-appraisal.co.jp

Corporate data (as of March 31, 2006) Domestic and global network

Company name: Mitsui Sumitomo Insurance Co., Ltd. Domestic network Global network (as of July 1, 2006) Sales network (as of July 1, 2006) Head Office: 27-2 Shinkawa 2-chome, Chuo-ku, Divisions...... 20 Overseas departments and branches/ Tokyo 104-8252, Japan Sales departments and branches...... 132 General representative office...... 5 Sales sections and sub-branches...... 729 Overseas representative offices...... 228 Established: October 21, 1918 Subsidiaries and affiliates...... 55 Claim services network (as of April 1, 2006) (including two reinsurance subsidiaries) Paid-in capital: ¥139.6 billion Departments...... 22 Claim service centers...... 256 Number of employees: 13,458 Claims specialists...... roughly 6,600

Number of domestic 59,126 agents:

Mitsui Sumitomo Insurance CSR Report 2006 30 Responsibility to our agents

To win the trust of customers, we provide the best products and services that support agents’ business growth.

Providing products and services that satisfy customers and supporting business growth for agents are our responsibility to agents. By re assessing our products and services and enhancing our support system, we are deepening our trusting relationship.

Regular meeting with our agents

Regular Meetings with Agents management guidance, we carry out consultations with agents aimed at We have regular meetings with agents to ensure that we provide our cus- solving problems and achieving targets. In these consultations, we provide tomers with the best possible products and services. At “success meet- guidance to administrative representatives about making operations effi- ings” attended by corporate agents and independent agents specializing in cient as well as supporting initiatives related to compliance, the base of insurance sales, agents create medium-to-long term plans that set out a the insurance business. Through face-to-face meetings and working toward vision for the future as well as year plans that clearly outline the activities shared objectives, we are working as partners with agents to expand their to be taken over one year, enabling us to provide individual agents with business and raise customer satisfaction. optimum management guidance. In addition to providing sales-related

I hold workshops with agent internal affairs representatives once a month. In addition to providing guidance on administration and compliance, I cover a broad range of topics in the Yasuko Sasaki, monthly meetings, including topics on such marketing operations as product education or Administrative Leader, Professional Agencies product-selling points. My goal is to provide agents with comprehensive support that will Sub-Branch, Yokohama allow us to offer customers products and services that are tailored to their needs. Branch

31 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to our agents

A partnership crucial to responding to customer trust

that they need to know as businesspeople with a variety of train- Cooperating with agents, our important ing materials related to the protection of personal information, business partners, for mutual prosperity including explanatory videos and documents. For example, agents can learn about the Personal Information Protection Law and how MSI entrusts the sale of insurance policies to agents who play an it affects agents. important role in linking customers with the Company. Agents handle policy consultations and applications as well as accident L Agent career advancement program: claims and consultations. To help our agents win the trust of cus- Career Up Program (CUP) tomers, we support them in all areas of their business with mutual This program offers practical courses related to insurance sales prosperity as our goal. and agent business. We provide training in product knowledge, compliance, market development, and computer skills to strengthen L Agent grading system business fundamentals, sales capabilities, and service. We also In order to provide customers with enhanced service and build offer training on the basic sales process for agent staff. trusting relationships with them, our independent Gyomu-Ranking Furthermore, we are establishing a program for business owners (operations-ranking) system supports agent-business expansion by who are new to the insurance business as well as agent staff who providing benchmarks. The operations ranking has five tiers, com- have never worked in the insurance business before. We also have prising new expert, level one, level two, level three, and level four. training courses on business strategy, leadership, and business As of March 31, 2006, 1,178 agents had acquired the new expert administration for agency owners. ranking. By operating this system and clarifying grading standards, we are endeavoring to create an environment in which more agents can achieve the top ranking. We support individuals who want to open up new agencies through our business establishment support system.

We provide training opportunities and Our Insurance Consultant (ic) System was designed to support suggestions aimed at solving management issues. people aiming to open new agencies, and it aims to develop insurance agents with specialist knowledge for sales of non-life and To encourage our customers to select our agents for their insur- life insurance, initiative, and planning capabilities. As of March ance needs, it is important for agents to accumulate knowledge 2006, 544 people had enrolled in this system, which provides and know-how that responds to a broad range of customer needs intensive practical education for potential agents over a fixed peri- and to create stable operating bases as agents. Accordingly, we od of time—the longest of which is 36 months. offer support for training and education appropriate to each stage of an agent’s development.

L Compliance-related initiatives Possessing knowledge about compliance is essential to running an insurance business. By offering group training opportunities and implementing a training system using Dairiten MS1 that gives agents the opportunity to engage in self-study, we are providing agents with an environment in which they can acquire and become familiar with accurate compliance information. To make training more convenient and easier to understand, we plan to roll out a training program that employs videos in 2007. We support agents in providing them with the necessary and accurate information

Mitsui Sumitomo Insurance CSR Report 2006 32 Supporting the daily work of agents with specialized staff and IT

L MSI Agency Service Company, Limited (MSAS) L Agent System Help Desk Sites nationwide use the MSI Agency Service, which consists of We have established a dedicated support desk for agent systems, staff who have significant business experience and can provide Agent System Help Desk, where the representative’s sole duty is business expansion advice as well as business diagnoses, merger to answer the questions that come in by telephone, email, or fac- consulting, and administrative training. Through cooperation simile. In the event of an incident that results in a high number of between MSI and MSAS, we are continuing to provide formal queries, information is posted in the Q&A section of the Help Desk business guidance that will allow even more agents to improve Corner on Dairiten MS1 to provide an easier way to obtain quick the quality of their operations. answers.

L Dairiten MS1 L Mobile MS1 Dairiten MS1 is a Web-based system that connects agents with We have introduced the Mobile MS1, the insurance industry’s first MSI and, with approximately 35,000 agents who employ it, is the fully digital terminal system for insurance policy procedures. largest such infrastructure in the Agents are improving their efficiency with the Mobile MS1, allow- industry. It provides an environment in ing them more time to focus on customer service. The greater which agents can efficiently carry out accuracy and speed the system realizes in policy preparation will daily operations, allowing them to deepen our customers’ trust ( p. 22).

make inquiries, calculate insurance Number of agents installing Mobile MSI: 1,632 (as of fiscal 2005 year-end) fees, make applications, and access

the latest news from MSI all from Dairiten MS1 their own offices. Requests regarding L Anshin Otodokebin system improvements are answered Anshin Otodokebin is a communication support tool that allows swiftly with improved functions. agents to send customers direct mail or facsimiles via the Internet. The tool enables agents to easily and quickly send customers a L Dairiten MS1 Mail variety of information, including new product Dairiten MS1 Mail can be used by agents running Dairiten MS1 and information and information or news about serves as an information network linking agents and MSI. It enables ordinary insurance. Anshin Otodokebin allows quick and effective communication through the exchange of emails us to support agents in furthering their commu-

using a secure system that protects customer information. nication with customers. Anshin Otodokebin Number of agents installing Anshin Otodokebin: 3,200 (as of fiscal 2005 year-end) Number of direct mail and facsimiles sent through Anshin Otodokebin: 208,795 (fiscal 2005)

L Agent 21 Agent 21 is a sales support system that manages customer information and utilizes policy data. Agent 21 has numerous functions, such as targeting potential customers, and it enhances proposal and information capabilities to expand agents’ business opportunities.

Number of agents using Agent 21: 9,093 (fiscal 2005)

33 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to our agents

Thinking and acting together for coexistence and coprosperity

The publication strengthens the bonds between MSI supports the creation of an organization under agents and MSIG, spotlighting sales stories and which agents meet and motivate one another. techniques from agents across Japan and impart- ing a broad range of information on agent manage- The creation of an organization where agents can share informa- ment. tion greatly benefits them. MSI supports the creation of such an Furthermore, MS Agency Tsushin includes a independent agent organization. page featuring CSR that outlines the Company’s MS Agency Tsushin stance on CSR and shares information that is necessary for MSI to MSIG agent association L work together with agents in the area of CSR. (MSA: Mitsui Sumitomo Agencies) MSA is an agent association where agents exchange information in their quest to be We work in cooperation with agents to make a social con- the agents that customers choose. MSA tribution with such activities as traffic accident prevention. comprises nationwide branches and offices, and its members meet once annually to We work alongside agents to generate ideas about the kinds of establish a one-year plan. Agents meet to things we can do to fulfill our social responsibility. improve the quality of their operations and increase their insurance sales know-how. MSA annual meeting L I-Stop campaign Number of MSA members (as of April 30, 2006): 3,528 Starting in fiscal 2006, we are implementing our I-Stop campaign to educate society about the necessity of stopping at intersections L Advance Club (AC) for service and repair shop agents and looking both ways when driving an automobile. We are work- The AC is an organization for service and repair shop agents who ing with agents to educate our customers with flyers and stickers, have a new vision for themselves. Primarily comprising large-scale thus promoting initiatives aimed at lowering the number of traffic certified businesses and designated businesses, the organization accidents. has 64 branches with 1,800 members that are working to promote environment-friendly vehicle inspections and maintenance (eco- inspections and eco-maintenance) as well as acquire the I-Stop sticker EcoAction 21 environmental management system. MSI endeavors L Social contribution activities to offer seminars to share know-how and provide technology train- We fully participate in CSR initiatives with our agents as well as ing, with the aim of promoting more widespread use of environ- activities that contribute to local communities. MSA has estab- ment-friendly technology. lished a social contribution fund to support activities that include Agents (shops) providing eco-inspections in fiscal 2005: 760 ( pp. 47, 51) aid for disaster victims and promoting social welfare. The fund has contributed money to support the revitalization L MSIG agent benefit society (MSC: Mitsui Sumitomo efforts in Afghanistan and areas affected by the Niigata earth- Corporative) quake. In fiscal 2006, we joined with MSA to donate Speechio, a MSC is a general welfare system for agents that supports the cre- device that reads SP codes—a high-density, two-dimensional ation of an environment in which agents can work with peace of encoding system—and text to create barrier-free documents—to mind. The system covers health and welfare, life planning, and the prefectural councils of social business expansion, and approximately 7,000 people participate in welfare ( p. 21). the health examination and group term insurance systems. Furthermore, MSA branches in each region engage in such voluntary activities as donating a portion Communication tools to provide information support- of agent fees to help children ing agent management orphaned by traffic accidents, thus contributing widely to the develop- L MS Agency Tsushin ment of society ( p. 42). Speechio donation In addition to daily reports sent over the Dairiten MS1 system, we publish MS Agency Tsushin, an information magazine for agents. Mitsui Sumitomo Insurance CSR Report 2006 34 Responsibility to business partners

We respect business partners as experts in their fields and are building trusting relationships as we work toward mutual development.

Cooperation with business partners in Japan and overseas who have extensive technological exper- tise and know-how in various areas is essential to enabling us to provide our customers with peace of mind and safety in our day-to-day business activities. By engaging in honest and fair trade based on a trusting relationship, we are developing in synch with our business partners. MSIG staff meet with an attorney from overseas.

Partnerships with overseas law firms analysis and evaluation based on legal precedent and the local legal con- In providing support for customers who, in the course of overseas business text. InterRisk Research Institute & Consulting, Inc., a Group company, uses expansion, are targets of product liability suits, we work in cooperation cooperative relationships with overseas law firms to offer high-quality ser- with overseas law firms. Because customs and legal contexts are different vices, providing the latest overseas risk information, holding open semi- from country to country, to deliver an appropriate response, international nars, and offering consulting and research services based on individual lawsuits require the support of local legal experts who can provide a case needs.

It is a given that the overseas law firms that partner with the Company in dealing with U.S. product liability cases have teams of specialists who are knowledgeable about responses to such lawsuits, but these teams also have a deep understanding of Japanese culture and busi- Tadayoshi Hirose ness customs so that we can trust them to respond even in cases that require close communi- Deputy Manager, cation and having a mutual understanding with customers. They respond to our opinions Fire & Casualty Claims and directions regarding responses to claims, making them partners that we can trust. Department

35 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to business partners

Collaboration with various business partners

N Services after accidents Our business is based on collaboration Many customers only begin to consider their insurance after with a variety of partners. an accident. It is no exaggeration to say that the value of insur- Reinsurance for stable operations, explanatory pamphlets and ance is decided by the quality of claims handling. We work with applications for insurance products, quick responses to accidents, partners to support customers who are feeling uneasy after facing a stable management system for vast amounts of data, knowledge an accident. about laws and taxes that resolve problems, office equipment that Typical partners Non-life insurance These partners conduct appraisals, calculate the amount of dam- provides a comfortable and healthy work environment—these are surveyors age or loss, and investigate the cause and circumstances of acci- critical things for building a trusting relationship with our stake- dents with regard to buildings and movable property. There are 673 non-life insurance surveyors at 52 locations in Japan. We holders. The cooperation of our partners enables us to realize outsource operations to 60 surveyors nationwide. Attorneys Attorneys provide legal advice and counsel in out-of-court settle- these things. It goes without saying that we are pursuing financial ments with other parties following accidents. We work with approximately 450 attorneys throughout Japan. In addition, we profits, but we respect our business partners as experts in their work with overseas law firms with extensive experience to respective fields and enjoy equal partnerships in which we work respond to overseas product liability lawsuits. Overseas non-life claim In the event that a loss of export cargo has been discovered over- toward mutual benefit. adjuster agencies and seas, we partner with overseas claim adjusters to provide prompt surveyors accident services. N Stable operations In order to protect the Company against large amounts of claims N Computer system due to major natural disasters or accidents, the Company passes We cooperate with a variety of partners in the management of our on part of its liability to other insurance companies for a given computer systems, an indispensable part of our business opera- insurance which it has accepted. This kind of insurance is called tions. These partners maintain and operate a stable system infra- “reinsurance,” and it allows insurance companies to diversify risk structure, as well as construct and operate systems that accurately and maintain stable operations. MSI maintains good relationships respond to various kinds of needs. with reinsurance companies worldwide, and works to secure stable, high-quality reinsurance. Furthermore, reinsurance brokers assist the Company in securing certain reinsurance contracts. Working with business partners on environment-related initiatives Major reinsurance companies Lloyd’s of London (U.K.), Swiss Re (Switzerland), Munich Re AG (Germany), Hannover Re (Germany), Toa Re (Japan) Initiatives aimed at resolving global environmental issues are

Major reinsurance brokers common ones that transcend business sectors and business-to- Guy Carpenter & Company, Inc. (U.S.A.), Willis Limited (U.K.) business relationships. We are working with our partners to promote environment-friendly initiatives. N Additional insurance product services Okuruma QQ-tai (Vehicle Rescue Squad) Service, which provides Examples of activities in which we have sought cooperation from our business partners assistance and advice for car trouble, and the Mitsui Sumitomo MSI suppliers • Refraining from idling vehicles in parking lots Insurance Line, which responds to overseas accidents and gives • Eliminating unnecessary packaging Business partners who • Thoroughly separating trash insurance advice in Japanese 24 hours a day, 365 days a year, are are MSI building ten- • Turning off all office equipment when leaving the office ants • Reducing paper usage when making copies (two-sided copies, etc.) examples of the Company’s lineup of various additional services. These services are made possible through partnerships with specialist assistance companies with extensive overseas networks.

P The MSI Group’s policy toward its business partners Fundamental guidelines The MSI Group’s policy toward its business partners—such as con- 1 The selection of business partners (contractors, suppliers, and others) shall not be based solely on precedent, but tractors, suppliers, and others—is based on relevant legal guide- shall reflect comprehensive consideration of business terms, the management state, technical abilities, environmental lines and social codes, and it aims for impartial and fair business activities, and other factors. transactions with those partners that are founded on relationships 2 Information arising from business transactions shall be properly controlled and protected. of mutual trust, while seeking sustained growth for all parties con- 3 Business partners (contractors, suppliers, and others) shall observe all legal guidelines and social codes. cerned as well as the execution of each partner’s duties to society. 4 The Company shall demand the optimal quality, prices, date of delivery, and services from its business partners (contractors, suppliers, and others).

Mitsui Sumitomo Insurance CSR Report 2006 36 Responsibility to employees

Aiming to be a company that is even more attractive to employees and their families and that employees are proud to work for

The structure of society as a whole is changing; differences arise in individuals’ ways of thinking, owing to such factors as differences in generation. While the business environment for companies changes by the minute, the relationship between companies and the employees who work for them is also constantly changing. Listening to employee feedback and recognizing the issues that occasionally arise between employees and the Company as well as working to solve Training for promoted operations leaders them are MSI’s responsibilities to its employees.

Strengthening national staff development Management University. The 22 leaders from MSIG from various coun- In fiscal 2007, MSI began strengthening its human resource (HR) develop- tries—the next generation of leaders—had lively discussions regarding ment system for national staff working overseas. In October 2006, human strategy and branding. resource representatives (employees who are responsible for local human resources) from all overseas locations met for the first time for a Global Human Resources Representative Meeting at the Shinkawa Head Office. The meeting allowed participants to exchange thoughts about HR development and shared values to deepen their understanding of the Group’s personnel systems and enabled both the Head Office and national staff to share know-how. Furthermore, training to nurture the next generation of managers working overseas was held in conjunction with Singapore

I joined two significant events held in October 2006 attributed to MSIG’s global human resources strategy. Although my roles as project team member in the human resources conference and as a participant in the development program were different, they brought me the same opportunity to know MSIG more and to experience the “togetherness” among the MSIG worldwide employees Iris Yuet with whom views and know-how were exchanged. I cherish these experiences as they increased my General Manager with Special Mission, confidence and attachment to my employer, and I earnestly expect MSIG’s continued commit- International Department ment to bringing care, opportunities, and challenges to its employees around the world.

37 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to employees

Reforming human resources to prioritize the development of employee capabilities

Human resources reform that focuses HR development with an eye on the future on employee development

To realize our aim of being a company where all MSIG employees For MSIG to grow, it is essential for us to bolster our workforce in share the same values, are motivated in their work, feel as if they tandem with business growth by rapidly moving forward with HR are growing, and work enthusiastically with a sense of satisfac- development that equips employees with sophisticated operation- tion, in fiscal 2005, we began reforming our personnel system. al knowledge and skills related to insurance and finance in addi- Focusing on HR development and taking into account adaptations tion to developing employees’ management aptitude and global made necessary by such external factors as the increased partici- awareness so that they can work on a global level. In addition, we pation of women in the workforce, the declining birthrate, and the are focusing on measures to facilitate communication and rela- fluidity of labor, we plan to create a company that embodies the tions between employees to foster an awareness among employ- ideals outlined below. ees that CSR should be the backbone of all their business activities, which, in turn, will lead to CSR-based operations. N Fostering an organizational culture of practical training The Company is endeavoring to foster an organizational culture of practical training that is based on on-the-job training and links off- A company that is enthusiastic about HR development, the-job training and individual practical training. a company where employees grow A fixed amount of Company profits will be invested in HR development to Active participation in HR development programs by everyone enable the Company to carry out thorough employee education. o • An investment of time and money into HR development will result in from officers to representative employees higher productivity and more valuable employees. • Active participation by officers in employee education (participation in off-the-job • Employees will feel that, as our employees, they will be able to grow, a training) feeling that will contribute to the recruitment and retention of excel- • Expansion of the mentoring program lent employees. o Supporting awareness raising and behavioral change as well as A company where employees feel challenged and motivated employee self-empowerment in their work We will create a culture in which employees can work independently, • The Company is developing independent employees by creating and executing beyond the framework of the Company, both now and in the future. medium- and long-term capability development plans under the Next Stage • Having close communication on all levels, including among employees Challenge Plan.* and between sections, will contribute to the sharing of advanced skills, • The Company actively provides a curriculum that helps employees to imagine their thus raising the organizational strength of each workplace. vision for their career’s future while taking stock of their careers and evaluating • A satisfying system of evaluation, promotion, and transfer will be themselves, with the ultimate goal of assisting employees in realizing their visions. implemented so that employees are consistently challenged with cre- * An independent capability development system whereby when employees are ative work. promoted, they create individual capability development plans to be followed until their next promotions A company where women flourish Female managers are rapidly increasing in number, and they are succeed- N Enhanced training for employees ing in a variety of workplaces. • The number of posts where women can succeed is expanding, and they who are transferred to a different section are being heavily recruited. In addition to group training given after an employee has been • We are striving to enhance our system designed to enable women to maintain a balance between work and home life and ensure the equal transferred to another section, we provide practical training before treatment of women in the workplace. the transfer as well as follow-up training that is given after a set amount of time has passed after completing the transfer to provide a backup system that allows employees to become proficient in the operations of their new workplace more quickly. N Accessing MS1-Learning from home The introduction of Home MS1 (access of the Company intranet from home) will enable us to create an environment where employees who want to learn can do so, and we are working to enhance its content.

Mitsui Sumitomo Insurance CSR Report 2006 38 A company where employees feel challenged and motivated in their work / A comfortable and open company

We value our employees for their individuality We strive to realize comfortable lives as well as their ability to rise to a challenge and provide them with opportunities for self-realization. for our employees and their families.

N Pilot session of internal trainee program N Initiatives to create a more relaxed work environment In fiscal 2005, we introduced a Company trainee program to facili- We are endeavoring to strengthen initiatives that give employees tate communication between sections and support the career more freedom by improving the workplace by changing employees’ development of employees. Thirteen employees from the sales, mindsets and enhancing employees’ skills while aspiring to estab- claims handling, and Head Office departments participated in the lish an atmosphere where employees can proactively respond to pilot session, which offered both the participants and the hosting various issues. Relaxed Work Environment Creation Committee sections an opportunity to better understand each other’s work meetings, which are attended by representatives from manage- and improve communication between sections. By experiencing ment and employees from different branches and departments the work of other sections firsthand, participants were able to who discuss initiatives to create a more relaxed work environment deepen their understanding of those sections. at their respective workplaces, and Relaxed Work Environment Creation meetings, which are attended by all employees in depart- N Step Up Job system mental branches, are held to pinpoint specific issues at each work- The Step Up Job system, which enables Operations Employees to place and accelerate measures to solve them. In fiscal 2006, all transition to regional career-track positions, has been enhanced to workplaces will hold meetings to discuss CSR together with these facilitate a faster transition to career-track positions by making meetings to strengthen the connection between the creation of a administrative staff who have been working at the Company for relaxed work environment and CSR. only a short time eligible to apply. MSI supports such employees and tries to alleviate any anxieties they may have by taking such measures as providing financial assistance for refresher-driving Breakdown of employees (as of March 31, 2006) (Number of people) courses and distributing portable security devices. Employee classification Male Female Total Applications and transfers in the Step Up Job program Associate directors 20 — 20 FY2003 FY2004 FY2005 FY2006 Applications 27 19 22 27 Career-track 5,580 49 5,629 Transfers 26 17 20 – Regional career-track 389 126 515 Sales/Claims administration 150 1 151 N Establishment of Women’s Empowerment Team Operations 16 5,342 5,358 984 54 1,038 As part of the reform of our human resources system, a Women’s Defined work I Defined work II 11 9 20 Empowerment Team was established in April 2006 as part of the Special work 167 8 175 Human Resources Department to realize the creation of a company Subtotal 7,317 5,589 12,906 where women can thrive. Through this initiative, we are aiming to Insurance consultant (ic) ( p. 32) 549 3 552 create an environment that is conducive to work styles that fit Total 7,866 5,592 13,458 women’s lifestyles, offer employees the opportunity to challenge Average number of years worked, age, salary (as of March 31, 2006) themselves should they wish to do so, and contribute to a compa- Total ny where employees are motivated and go about their work with Average number of years worked 12 years Average age 38.5 enthusiasm. We are constructing new human resources systems Average annual salary ¥7,808,880 by having discussions that take employee feedback into consider- Number of new employees (joined on April 1, 2006) ation to provide a comfortable working environment. Employee classification Male Female Total Female managers Graduate career-track 160 15 175 April 2003 April 2004 April 2005 April 2006 Graduate administrative staff 0 338 338 Number of women Mid-career career-track 6 1 7 holding position of dep- 34 58 77 158 uty manager and higher

39 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to employees

Creating an environment where diverse employees can be as active as they like

N Team WITH (team for promoting the establishment of work- We guarantee the basic rights of our employees. places that are friendly to employees with disabilities) We have established an organization called Team WITH to support the creation of workplace environments where employees with Human Resources Counseling Office disabilities throughout Japan can discover the joy of working at The Human Resources Counseling Office was established to pro- their respective workplaces and can fully explore their potential. vide counseling on such issues as problems in and out of the Members are selected by the manager of the Human Resources workplace and future lifestyle planning for middle-aged and senior Department and carry out activities to ensure the establishment of employees. The office provides counseling and advice as well as workplaces that are friendly to employees with disabilities. WITH problem resolution assistance for all manner of personnel-related is derived from the words “willingly” and “thoughtfully.” The addi- problems, including those related to the mental and physical tion of voice recordings to product pamphlets ( p. 21) were an ini- health of employees and their families, concerns and hopes tiative of Team WITH members and the CSR promotion regarding their work and private lives, and sexual harassment. representative to create barrier-free access to information for all customers. Human Resources Counseling FY2002 FY2003 FY2004 FY2005 Number of consultations – 256* 366 445 Employment rate of people with disabilities * Mental health consultations only FY2002 FY2003 FY2004 FY2005 Employment rate 1.86% 2.00% 2.06% 2.05% N Health management rooms and centers Health management rooms and centers in 11 locations throughout Japan support health management and preventative measures for employees so that they can carry out their work with healthy bod- N Labor unions ies and minds. In addition, we have created a Website, Concerns The main labor unions within MSIG are the MSI Labor Union, about Your Mind and Body, which provides health-related informa- which has 12,352 members, and the MSI branch of the Non-Life tion, and offer mental health self-care training, with the aim of Insurance Labor Union, which has 19 members. enhancing the health of employees’ minds and bodies.

Workplace accidents FY2005 Work-related accidents 15 Commuting accidents 31 Total 46

N Internal reporting system MS Help Line On September 1, 2004, we introduced MS Help Line, an internal reporting system to which employees can report illegal conduct at workplaces or by individual employees without going through management. The system aims to prevent inappropriate conduct in the workplace and makes us aware when employees are victims of such things as harassment or inappropriate management so that we can take the appropriate measures.

Use of internal reporting system MS Help Line FY2002 FY2003 FY2004 FY2005 Number of consultations – – 5 4

Mitsui Sumitomo Insurance CSR Report 2006 40 Responsibility to local and international communities

We become something familiar to people of local communities and consider the people of all over the world.

Each of the members of MSIG is aware of social issues, and, as members of local and international communities, they participate in activities that help to address these issues because it is our social responsibility. The experience we gain from these activities gives us empathy for others and improves our attitudes in our work.

Dolphin KIDS project

Dolphin KIDS project Putting volunteer opportunity Beginning in fiscal 2005, in cooperation with Asahi Breweries, Ltd., we information on the intranet began to invite children living in foster homes in Hyogo Prefecture, who We use our Company intranet to deliver information on volunteer for whatever reason are unable to live with their parents, to stay for two programs that are seeking participants. In addition, we use the days and one night in towns by the seaside. Volunteers from the two intranet to call for donations to people in need of assistance after companies plan the event, which includes dolphin touching, swimming in natural disasters and to introduce goods that are sold by charita- the surf, and watching fireworks displays. ble groups.

I began to participate in the activities last year. When I went to meet the children at JR Osaka Nahoko Ohnishi Station, I was a little nervous, but I felt happy when the children held my hand with their Kobe Motomachi Service little hands. When children and adults have a nice time together, it is a rare pleasure in Center, modern-day society, and I feel that this is an experience that society needs. Kansai Automobile Claims Dept.

41 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to local and international communities

Corporate activities for contributing to society

MSIG has established a policy for activities that contribute to L Social contribution activities outside our business activities P Gifts of 578 items to 51 NPOs in fiscal 2005 society and is engaged in a range of initiatives. We provide to NPOs the equipment and fixtures we no longer need when we move or rebuild our office premises. In fiscal 2005, we made gifts of 578 pieces The Company and individual staff members are both members of of equipment, fixtures, and other items. society and engage in activities that contribute to society. That is P NPO coffee shop “Cafe Iris” set up why we prepared the MSIG Guidelines for Societal Contribution in MSI Head Office building Activities. In 1993, we established a coffee shop on the ground floor of our Nagoya Building and entrusted the man- Cafe Iris agement of the shop to an NPO that assists aurally and intellectually challenged persons. Individuals with these disabilities are The MSIG Guidelines for Societal Contribution Activities: employed in the coffee shop, and, to support the operation, we provide the space Fundamental guidelines and equipment as well as pay the water and other utility bills. Profits from this In accordance with the MSIG Charter on Professional Conduct, as a member shop are used to assist the activities of the NPO. of local and international communities, the Group shall contribute to the sustainable development of those communities and support the social contribution activities of employees and agents. L Support for various activities and recent developments 1 Promotion of corporate activities for contributing to society The Company offers support, in the form of special systems and The Company contributes to the development of society in all points of con- environments, for certain of the activities undertaken autonomous- tact with local communities and the international community. ly by the employees and agents. 2 Support of employee and agent activities for contributing to society The Company will strive to be a good company by supporting employees’ Days off and leaves of absence for volunteer work and agents’ voluntary contributions to society and promoting awareness of Days off: Employees may apply for days off for volunteering equal to his or her their roles in society. annual paid vacation days. Leaves of absence: Employees may apply for a leave of absence of 6 to 28 months to participate in volunteer activities. L Striving to make social contributions

through our business activities Social activity supporter system P Transferring advanced non-life insurance technology to other countries in Asia Under this system, one social activity supporter is appointed in each department or MSI began its non-life insurance business activities in Asia in 1954. Working branch to promote social contribution activities in each region throughout Japan. through the government insurance authorities and insurance associations in the countries of Asia, we offer our technology, experience, and know-how to the Matching gifts for disaster relief region. Following disasters in Japan that qualify under the Disaster Relief Law and major P Received award as the “General Insurance Company of the Year” overseas disasters, the Company makes donations that match those gathered from in the Ninth Asia Insurance Industry Awards ceremony employees. These matching gifts amounted to nearly ¥12,985,400 in fiscal 2005. As a result of the purchase of all the non-life insurance operations in Asia of Aviva plc of the United Kingdom, MSIG rose quickly to the position of the largest foreign non-life insurance company operating in Asia. The receipt of this award reflects a L Activities of the MSI Welfare Foundation high appraisal of our ability to offer technology for insurance products and services to the countries of Asia. (established in 1975) The MSI Welfare Foundation provides assistance for the preven- P Development and sale of automobile insurance products As a result of our introduction of discounts for eco-friendly cars, vehicles used for tion of automobile accidents and all manner of disasters as well welfare purposes, and vehicles equipped with an inmobilization device (“immobiliz- as for activities and research to further enlighten people about ers” that prevent auto theft), we are now giving our support for concern for the natural environment, normalization (the creation of environments that encourage the caring for the elderly. In the 30 years since its founding, it has pro- participation of physically challenged persons and senior citizens in social activi- vided ¥1,824 million for 1,393 activities. The results of funded ties), and auto theft prevention. research are collected every year in a Research Results Report P Assistance to children orphaned by traffic accidents from compulsory auto- that is registered and made public on the National Institute of mobile liability insurance fees Informatics database. Agents of MSI and others are now contributing a portion of the fees earned from the sale of compulsory automobile liability insurance to NPOs that provide support for children who have been orphaned as a result of traffic accidents. ( p. 34)

Thank you letters from across Japan

Mitsui Sumitomo Insurance CSR Report 2006 42 Employee leadership shines in various activities

Employees join together to make societal contributions through the Smile Heart Club.

Assistance to children through sale Participation in the “Provide Picture L What is the Smile of charity greeting cards Books Movement” Indonesia Night Charity Event Heart Club? Since fiscal 1992, Since fiscal 2000, a A Bali dance event The Smile Heart Club, whose members are these efforts have total of 3,750 books for charity by MSIG MSIG employee volunteers, is a group that raised ¥33.2 million. have been present- employees. Since fis- conducts social contribution activities. ed. cal 2004, proceeds Every month, each member donates less have amounted to than ¥100, which is rounded off from the ¥156,604 in total. last two digits of his or her salary plus a voluntary amount in multiples of ¥100, and the funds collected are used to finance such activities as the following: P Offering assistance to NPOs, including welfare facilities and environmental Presenting hand-knit sweaters to groups children around the world Buta Neko charity concert Valentine charity concert P Providing funds for the club’s social contribution activities Since fiscal 1992, a A mini-concert by The proceeds of an annual light music P Supplying financial assistance for the total of 10,687 students from a concert are donated for scholarships to volunteer activities and events of club sweaters have been music college is children in Thailand and Laos. Since fiscal members sent as gifts. held in the lobby of 1996, this activity has made it possible MSI’s Head Office. for 106 children to attend middle schools. Since fiscal 2000, the proceeds from these concerts have totaled ¥483,794.

Branches and departments nationwide promote social contribution activities.

Donation of Christmas cakes to orphanages: 1,500 MSI employees prepare and donate braille picture L One social contribution “Be Santa once a year!” books. activity a year at branches During the Christmas season, MSI Group Participants pasted transparent seals and departments employees give Christmas cakes to chil- over the text and pictures in 158 picture MSIG volunteers conduct a broad range dren in local orphanages. books, with the text translated into of social contribution activities suited to braille and the picture also outlined in local needs. Through these activities, we raised dots. These books were then are working to build stronger ties with donated to libraries and schools for the local communities. visually challenged. Conduct of local safety Continuing support for the physically challenged and security patrols and senior citizens Association for registering blood and bone marrow donors To help prevent accidents and criminal The Hiroshima Office conducted support activities eight times Events were held simultaneously in 10 loca- activity in regional areas, MSIG employ- during the year, including assistance for taking care of physically tions throughout Japan to register blood ees and agents put magnetic stickers on challenged orphans, support for nursing care for the physically and bone marrow donors. Since fiscal 2002, vehicles used for their business purposes. challenged, and wheelchair services for senior citizens attend- a total of 2,720 individuals have cooperated ing the Peace Memorial Ceremony. in blood donation activities and 294 have registered in bone marrow banks.

Proactive support for employees’ voluntary spirit

Sponsorship of sales for products manufactured in shops Soccer schools with J-League support employing physically challenged workers MSIG provides its cooperation to soccer schools taught by J- MSIG makes arrangements periodically within its offices for the League athletes that are sponsored by the J. League Pro- sale of products, such as cookies, cakes, and jam, that are made Footballers Association for orphanages. by physically challenged persons. Since fiscal 2005, these events have raised ¥3,027,187.

43 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to local and international communities

Creating an affluent society through culture, the arts, and sports

Interacting with the local community Working to nurture athletes and promote sports through promoting culture and the arts

L Shirakawa Hall We formed our women’s judo club in 1989 and a women’s track In 1994, MSI opened this medium-sized concert hall in Nagoya. and field club in 1991 and are striving to promote sporting activi- The hall has received high ties that will contribute to the strength and prosperity of judo as praise from performers and well as track and field sports in Japan while also contributing to audiences alike, who find it the global community. At present, many MSI club athletes are a comfortable place in active in events in Japan and overseas. which to play and listen, Judo respectively. Each year, a May 2005: Participated in National Businessperson’s Judo Team Competition and won in the charity concert is held to women’s class for the third time, placing first for the first time in two years. September World Judo Championship: Yuki Yokozawa won a silver metal in the 52kg class. support the Japan Marrow Shirakawa Hall 2005: Donor Program. April 2006: Three athletes (Masae Ueno, Riei Iwafuji, and Yuki Yokozawa) from the MSI club won at the All-Japan Women’s Judo Singles by Weight Class Competition L Activities of the MSI Cultural Foundation Track and field (established 1988) November The MSI team became the first to win the East Japan Businessperson’s Group The MSI Cultural Foundation provides financial support for music 2005: Relay Race for six consecutive years. and local performing arts with the aim of December The MSI team came in first for the fifth time (a tie for the event), and the third advancing culture promotion in local 2005: consecutive win, in the National Businessperson’s Group Relay Race. March 2006: Yoko Shibui came in second in the Nagoya International Women’s Marathon. communities. It cooperates with munici- April 2006: Reiko Tosa came in first among Japanese contenders and third among all runners palities to provide high-quality concerts in the Boston Marathon. and contributes to activities promoting international cultural exchange. By the end of fiscal 2005, the foundation had sponsored 434 concerts in 395 different cities, towns, and villages and provided assistance for 335 international Masae Ueno Emi Yamagishi Yoko Shibui exchange programs and activities A concert for residents of the local L Judo school for boys and girls community amounting to ¥225.5 million. In 1998, MSI began to sponsor its Judo School for Boys and Girls, especially for L Employees perform Beethoven’s 9th Symphony primary school children, in the vicinity of To commemorate the 5th anniversary of the formation of the its Setagaya judo training facility. MSIG, 300—including the MSI Symphony Orchestra, employees, Members of the MSI judo club act as persons retired from MSIG instructors, and lessons are held three companies, their families, times a week. and staff members of agents—came together on L Support for expanding and improving April 16, 2006, in the sports opportunities for the physically challenged Suntory Hall in Tokyo’s In 2006, Mitsui Sumitomo Kirameki Life Insurance began to spon- Akasaka district to give an sor the activities of the following organizations: Japan Sports inspiring performance of The Suntory Hall in Tokyo’s Akasaka district Association for the Disabled, Japan Judo Association for the Beethoven’s 9th Symphony. Visually Handicapped, and the Japan Association of Athletics Federations for the Disabled, with the goal of expanding and improving opportunities for the physically challenged.

Mitsui Sumitomo Insurance CSR Report 2006 44 Responsibility to the environment

Working to realize a sustainable relationship between business activities and the environment

In some form or another, corporate activities have an impact on the environment. As an insurance company, we offer society products and services that contribute to alleviating environmental degradation so this beautiful planet can be hand- ed down to the next generation. As a global citizen, we are fulfilling our responsibility to the environment by taking such measures to improve

the environment as reducing carbon dioxide Planting trees at the Paliyan emissions. Wildlife Sanctuary

Full-fledged start of tropical forest renewal in the Republic of Indonesia For the children of Indonesia

In April 2005, in an effort to reverse the trend of shrinking tropical forests, just one of the world’s environ- To promote reforestation activities with mental problems, we collaborated with Indonesia’s Ministry of Forestry to plant approximately 260,000 trees local citizens over the long term, we have in the Paliyan Wildlife Sanctuary, which covers approximately 300 hectares. donated textbooks, writing supplies, and In December 2005, under the sponsorship of the special governor of Yogyakarta, a planting ceremony sports equipment to local elementary attended by the Forestry Minister and local citizens was held to pray for the project’s success. schools to further deepen the friendly Through the planting, we are aiming to realize reforestation relationship we have with the community. whereby the forest will be able to coexist with local citizens and will contribute to a reduction in natural disasters as well as recover the essential functions of the forest. Since the commencement of reforestation efforts, approximately 100,000 trees have been planted over 109 hectares. We plan to carry out surveys and research on the effects of the reforestation on Paliyan Wildlife Sanctuary biodiversity in conjunction with Indonesia’s Gadjah Mada University. Children excited about receiving Java, Republic of Indonesia school supplies and sports equipment

We have donated books about forests to local schools to educate local children about the sig- nificance of forests. They will be affected by the global environment of the future, and it would be excellent if the local citizens, with our help, could raise and protect the Paliyan forest. Seiichiro Miyake MSIG is developing its global activities; for example, when the local residents living in the Director, vicinity of the forest experienced a major earthquake in 2006, it collected donations from PT. Asuransi Mitsui Group companies throughout the world. Sumitomo Indonesia

45 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to the environment

Corporate activities that protect and improve the global environment

Bettering the environment is one We have constructed environmental management systems for all busi- of our management priorities. ness locations and are promoting Groupwide environmental activities.

N MSIG Environmental Policy N Environmental management structure In accordance with its management priority of bettering the envi- All business sites in Japan have acquired ISO 14001 international ronment, MSIG has established the MSIG Environmental Policy. environmental management certification, and we are creating a In following the four specific guidelines outlined below, we are structure for promoting Groupwide environmental initiatives under the MSIG working toward the protection and improvement of the environment. Environmental Policy. In fiscal 2005, two new Group companies began working MSIG Environmental Policy toward certification, and, at present, MSI and 13 of its Group companies have P Basic philosophy acquired the 2004 version of ISO 14001 Based on the MSI Group’s management philosophy of endeavoring to contrib- certification. Among overseas business ute to the enrichment of society by bringing security and safety to the world, we shall strive to protect and improve the global environment and shall pro- sites, ISO 14001 certification has been mote steady and sustainable initiatives in accordance with the action guide- acquired in Malaysia. lines described below. ISO 14001 certificate for environmental management system

P Action guidelines MSIG ISO 14001 Certification 1 Global environmental protection through insurance and financial services business Date of certification Company names Every department in the Company and other Group companies shall work to November 2002 Mitsui Sumitomo Insurance Co., Ltd., Mitsui Sumitomo develop and offer to society products and services that contribute to resolv- Kirameki Life Insurance Co., Ltd., InterRisk Research ing global environmental problems. Institute & Consulting, Inc., MSK Information Service Co., Ltd., MSK System Development Co., Ltd. 2 Reduction of environmental impact of business activities November 2003 MSK Hontenkanri Co., Ltd., MSK Building Services Starting with the observance of environmental laws and regulations as well Co., Ltd., MITSUI SUMITOMO INSURANCE Claims as charters and guidelines for industry to which we have agreed, we shall Adjusting Co., Ltd., MSK Claims Services Co., Ltd., MSK Anshin-Station Co., Ltd. promote energy and resource conservation along with waste reduction and recycling activities to reduce the environmental impact of our business activi- November 2004 MSK Marine Services Co., Ltd., MSK Shoji Co., Ltd. ties and contribute to the realization of a zero-waste society. February 2006 MITSUI SUMITOMO INSURANCE Loan Service Co., Ltd. MITSUI SUMITOMO INSURANCE Agency Service Co., Ltd. 3 Advancement of environmental management systems Certification body: Japan Quality Assurance Organization We shall work to construct environmental management systems and carry out initiatives established by environmental objectives and targets to effect continuous improvement and prevent pollution. Structure of environmental management promotion (As of April 2006) Top management Note: About 250 ISO Promotion Officers have been 4 Harmonious coexistence with society Chairman, President deployed at offices throughout Japan to lead Director in Charge of activities at the local level. through environmental awareness activities General Affairs In promoting greater harmony with society, we shall conduct environmental education to raise awareness of environmental problems among our execu- Environmental Management Internal audit team tives and regular employees and promote environmental awareness activities Officer General Manager for Central Secretariat both within and outside the Company so that all employees may proactively General Affairs Department Community relations and carry out environmental protection activities themselves. We shall also wide- environmental management ly disclose environment-related information. Block headquarters secretariats Block headquarters, General Affairs group (10 divisions), This environmental policy shall be made familiar to all executives and regular Group companies (13 companies) employees at all Group companies and be disclosed to the general public. General Managers ISO Promotion Officers Established October 1, 2001

We collaborate internationally to help alleviate environmental degradation on a global scale.

P United Nations Environment Programme (UNEP) P Participation in Carbon Disclosure Project 4 (CDP4) Insurance Industry Initiative for the Environment The Company participatedd in the fourth CDP, which calls for the In November 1995, the Company helped draft and signed the UNEP Insurance world’s top corporations to disclose their initiatives to combat envi- Industry Initiative for the Environment and joined insurance companies through- ronmental degradation. CDP4 aims to accelerate initiatives to pre- out the world in promoting global initiatives that aim for the sustainable devel- vent global warming through the disclosure of such information. opment of society.

Mitsui Sumitomo Insurance CSR Report 2006 46 MSIG environmental We have introduced an environmental management management system system, and we are promoting activities and striving for continual improvement using the PDCA cycle.

2005 Implementation Plan and operations Plan Do

Establishment of environmental targets and plan of action for 2005 Execution and regular inspections of environmental activities in 2005

The Company pinpoints the environmental aspects of its business activities Activities are steadily implemented according to environmental management plans. and separates those activities into activities undertaken by all business Implementation status is reviewed periodically and inadequate activities are corrected. locations and those undertaken by segments, after which it establishes Evaluation A: Achieved targets specific environmental targets. B: Less than 10% deviation from targets Activities undertaken by all business locations: Energy and resource conser- C: Less than 30% deviation from targets vation by all employees Activities undertaken by segments: Environmental initiatives related to the main business of segments at Head Office

P Environmental activities undertaken by all business locations P Results of activities undertaken by all business locations Activity (environmental target) Achievement Environmental objective Fiscal 2005 targets Fiscal 2006 targets Two-year plan total Activity description Evaluation Items for commendation, issues (compared with fiscal (compared with fiscal (compared with fiscal status 2004 performance) 2004 performance) 2004 performance) 1. Use of back side of paper Increase in printed materials due to product Reduction of paper More than 5% More than 5% More than 10% 2. Two-sided copies, 2-in-1 reduced copies –2.1% revisions (250 tons more than the previous consumption reduction reduction reduction 3. Reduction of needless inventories of B year) printed materials

1. Last person to leave the office uses check sheet to Reduction of electricity More than 3% More than 2% More than 5% confirm that all office equipment has been turned off Implemented energy-saving measures when –2.6% B consumption reduction reduction reduction 2. Use of stairs for going up one floor or down two building facilities were upgraded floors

Reduction of gasoline More than 5% More than 5% More than 10% Promotion of replacement of Company vehicles Thorough implementation of eco-driving –7.7% consumption reduction reduction reduction A with fuel-efficient vehicles

Promotion of environmen- Implementa- Implementation of eco-inspections of cars at 760 maintenance shops Provision of eco-inspections of cars at Seminars and individual support activities (27 tal measures for automo- tion at 760 (includes those with existing facilities) ( pp. 34, 51) maintenance shops A additional shops) biles in use shops

Promotion of repairs using Efforts to encourage customers and repair Ratio of parts Promoted initiatives by using recycled parts as recycled parts from cars Ratio of parts recycled from cars damaged in accidents: 3.4% shops to use recycled parts 3.4% A an indicator in performance evaluations damaged in accidents

P Environmental activities undertaken by segments P Principal results of activities undertaken by segments Note: 75 items were implemented. (56 activities were implemented in fiscal 2004.) Note: 75 items were evaluated. (A: 69, B: 4, C: 2) Responsible department Environmental target of the activity Results Evaluation Food scraps from the cafeterias in the Surugadai Building and Shinagawa Building were recycled as animal General Affairs Dept. Reassessment of system for recycling food scraps feed. In one year, 24 tons, or 3%, of waste were recycled. A Development and consideration of products that counteract environ- Marine Underwriting mental degradation through activities of the Kyoto Protocol Launched Eco Cruise pleasure boat insurance ( p. 51) and Support One transit insurance Dept. A Communications Group Held the seventh Marine Accident Prevention for Ships and Cargo Marine Claims Dept. Held nine marine accident prevention seminars seminar to help customers prevent marine pollution A Mitsui Sumitomo Promoted green procurement (green procurement rate for fixtures 100% green procurement of fixtures and equipment Kirameki Life Insurance and equipment: 95%) A

Response to emergency situations Environmental education

We have created a procedure for responding to emergency situations. In accor- To ensure proper understanding and raise awareness of environmental degradation and envi- dance with these procedures, we conduct an annual emergency response drill. ronmental management systems, and to link this to proactive environment-related activities by each and every member of MSIG, we offer a variety of opportunities for environmental H Status of emergency response drill (as of June 2006) training and education. Starting in fiscal 2005, everyone who works at MSI business loca- Assumed emergency situation: Heavy oil leakage from underground tank and/or tions, including regular employees, temporary employees, and part-time employees, receives pipe for private power generation environmental education through an e-learning initiative. In addition, A Portable Guide to ISO Target buildings: Chiba New Town Center, Hachioji Center, Sanda Center 14001, which includes an activity checklist, has been distributed to all employees to ensure Details: Conducted checks and tests according to response procedure their environmental awareness.

47 Mitsui Sumitomo Insurance CSR Report 2006 Review by management action 2006 Action Responsibility to the environment lan Planning P 2005 PDCA Cycle heck P Ranked number one in the financial sector by C the 9th Nikkei Environmental Management Survey The Company has been recognized for such measures to counter- o act global warming as reductions in office electricity consumption D and a reduction in CO2 emissions by Company cars, as well as its Check and take remedial action Implementation and operations method for managing targets for ISO initiatives. Moving forward, it plans to strengthen such resource-recycling initiatives as the measure to realize zero food scrap emissions at its Shinagawa and Surugadai buildings. Check and take Review by remedial action management Check Action Review by management

Executive officers improve the Plan, Do, Check, & Act (PDCA) cycle through an Inspection for compliance with environmental laws and regulations annual review of the environmental management system that takes into consider- We carry out a nationwide inspection to ensure that all relevant ation the results of assessments by external assessment bodies as well as inter- laws and regulations that apply to the Company are being observed. nal audits, compliance with laws and regulations, and environment-related The results of this inspection are used to verify that there have performance. In fiscal 2005, they reviewed the items below. been no violations of the law, environment-related lawsuits, or demands from stakeholders. Fiscal 2006 targets Environmental targets Comparison with fiscal 2005 Comparison with fiscal 2004

Internal environmental audits Reduction in paper consumption Made a downward revision to targets due –10% R 1% Periodic internal audits are conducted to ensure that our environ- to an anticipated increase in printed mate- –5% R 3% rials resulting from the revision of products mental management system conforms to ISO 14001 standards and and pamphlets that it is being properly implemented. Reduction in gasoline consumption Made an upward revision to targets in Dates of audit August 5-30, 2005 –3% R –5% –10% R –12% light of the progression of the transition to Physical audit 87 nationwide departments and branches (group fuel-efficient vehicles companies included) Environmental management system Changes to enhance the team of internal auditors Document Audit details All business locations audit Audit ISO 14001 standards and MSI’s environmental man- 2006 standards agement manual Plan Auditors 7 lan Noted items 7 (no significant items) P Establishment of theme and plan of action for 2006 The appropriateness and effectiveness of environ- Audit results mental management systems continue to produce Overall results. A stronger relationship between CSR and Based on the results of the review by management, the Company has established environ- evaluation customer service as well as an increase in the num- mental targets for its activities in fiscal 2006. It stepped up efforts to pinpoint environmental ber of internal auditors are recommended. aspects of its main business and came up with 140 items. As a result of environmental All units have responded to and resolved noted impact evaluations, 111 of the 140 items have been selected as activities for which it will Response to noted items items. set environmental targets.

P Environmental activities undertaken by all business locations Activity (environmental target)

Environmental objective Fiscal 2006 targets (compared Two-year plan total (compared Result of renewal inspections by third-party certification bodies with fiscal 2005 performance) with fiscal 2004 performance)

Assessment dates January 17-20, 2006 Reduction of paper consumption Less than 3% increase Less than 1% increase

ISO 14001 certification has been renewed under Reduction of electricity consumption More than 3% reduction More than 5% reduction the fiscal 2004 version, and recommended Overall evaluation improvements from the previous assessment have been made. Reduction of gasoline consumption More than 5% reduction More than 12% reduction

Items for inprovement 0 Promotion of environmental measures Acquisition of EcoAction 21 certification by 20 additional at repair shops repair shops Items for which 12 items R Increase in the number of internal Promotion of repairs using recycled parts improvement is auditors, increase in the number of items related Ratio of parts recycled from cars damaged in accidents: 3.6% from cars damaged in accidents suggested to environmental aspects in essential operations

3 items R Increase in the number of environment- P Environmental activities undertaken by segments related initiatives in Head Office segment opera-

Areas of evaluation Items evaluated highly tions, aggressive efforts to raise the popularity of Responsible department Environmental target of the activity eco-inspections for the general population Information Technology 95% of computer equipment purchases to be environment-friendly products In fiscal 2006, the Company will increase the num- Planning Dept. in accordance with the Law on Promoting Green Purchasing Response to recommended ber of internal auditors and pinpoint the environ- 90% reduction in paper output by changing to electronic documents for new improvements Agent System Dept. mental aspects of its principal businesses. development proposals 5% reduction in water consumption by the employee cafeteria compared MSK Shoji Co., Ltd. with the previous year InterRisk Research Institute & Ongoing transmission of environment-related information with the publica- Consulting, Inc. tion of a quarterly environment newsletter

Mitsui Sumitomo Insurance CSR Report 2006 48 Measures to reduce the environmental impact of business activities

We are working to understand the extent of the environ- P Use of electricity for the computer network needed to mental impact of our business activities and are promoting respond to customer needs measures to reduce environmental impact by all employees. P Use of gasoline for the Company cars required to ensure N Characteristics of environmental impact close communication with customers and agents There are three main factors related to the environmental impact Of these three factors, electricity and gasoline use are the pri- of our insurance and financial services business activities: mary causes of carbon-dioxide emissions—a cause of global P Use of paper for insurance product applications and pam- warming. To reduce this impact, we have set concrete targets and phlets and for the management of customer policies developed an action plan that is being undertaken Groupwide.

Electricity (82,144,377kWh)

Gas Total carbon-dioxide (2,717,223m3) emissions 55,233t Change in total carbon-dioxide emissions (tons-CO2) Heavy oil (11,601 ) Total 59,703 57,408 55,233

E n e r g y 242 (0.4%) 332 (0.6%) Gasoline 4,427 (7.4%) 209 (0.4%) (5,120,531 ) 5,020 (8.7%) Other 5,864 (9.8%) 5,013 (9.1%) 6,631 (11.6%) Heat supply M SIG 6,413 (11.6%) General waste 14,959 (74,825,566MJ) 734,995kg (25.1%) 12,890 11,890 (22.5%) Heat supply (21.5%) Gas Water (198,687m3) 34,211 32,534 31,708 (57.3%) (56.7%) (57.4%) Gasoline

Paper Sewage system (6,061t) 3

240,985m Electricity our insurance and financial services business activities

Three main factors related to the environmental impact of 2003 2004 2005

Carbon-dioxide emissions data record Total Use of Head Office and related buildings Cause of Emissions Emissions Kg of emissions Scope Performance Emissions volume CO2 per Number of emissions coefficient (kg of CO ) person volume Total floor 2 (tons of CO ) Name of building Location people using 2 area (m2) the building All 82,144,377kWh 82,144,377kWh 0.386kg-CO /kWh 31,707,730 1,644 31,708 Electricity locations 2 Shinkawa Building Chuo Ward, Tokyo 58,883 2,000 Surugadai Building Chiyoda Ward, Tokyo 75,609 2,800 Gasoline All locations 5,120,531r 5,120,531r 2.322kg-CO2/r 11,889,873 616 11,890 Chiba New Town Center Inzai, Chiba Prefecture 81,010 2,700 Hachioji Center Hachioji, Tokyo 19,707 820 Gas Head Office and 1,186,056m3 2,717,223m3 2.360kg-CO /m3 2,799,092 332 6,413 related buildings 2 Sanda Center Sanda, Hyogo Prefecture 21,764 100 Total number of MSIG employees: 19,290 as of March 31, 2005 (excluding part- Heat Head Office and 32,661,030MJ 74,825,566MJ 0.067kg-CO /MJ 2,188,289 260 5,013 time employees) supply related buildings 2 Method of calculating total emissions: Total emissions volume was calculated by multiplying emissions per person by the total number of Group employees. Sewage Head Office and 105,189m3 240,985m3 0.511kg-CO /km3 53,752 6 123 system related buildings 2 Carbon-dioxide emissions coefficient: We have used the emissions coefficient specified by the fiscal 2005 Tokyo Global Warming Prevention Plan. Head Office and 5,064r 11,601r 2.710kg-CO /r 13,723 2 31 Heavy oil related buildings 2 Electricity usage volume: Head Office and related buildings (Shinkawa, Surugadai, Chiba New Town Center, Hachioji Center, and Sanda Center): Actual usage volume. Water Head Office and 86,726m3 198,687m3 0.190kg-CO /m3 16,478 2 38 Other buildings: Calculated from electricity fees by using average electricity unit supply related buildings 2 price of ¥18 per 1 kWh. Gasoline usage volume: Gasoline usage volume was calculated based on monthly General Head Office and 320,822kg 734,995kg 23.500kg-CO /ton 7,539 1 17 waste related buildings 2 gasoline bills and the nationwide average retail price for each month. Sanda Center: The Sanda Center closed in December 2005. The number of people Total 2,863 55,233 using the building is an average based on previous figures. 49 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to the environment

Status of activities to lessen environmental impact of five Head Office related buildings and Company cars

We are steadily reducing emissions of carbon diox- 3. Replaced old heating system with energy-saving model in the ide—a cause of global warming—by aggressively Hachioji Center Building promoting energy-saving measures in our buildings. 4. Installed an inverter in the air-conditioning system in the com- We aggressively promote energy saving at all buildings and are puter wing of the Chiba New Town Center Building reducing our use of electricity and other kinds of energy. In fiscal 5. Streamlined operations at the Mita Center Building after the 2005, we took the initiatives listed below to realize a significant restructuring of the computer center’s operations decrease in the consumption of electricity and other kinds of energy. In addition, the Company has been aggressively replacing 1. Commencement of operations and management of Shinagawa Company vehicles with low-emissions gas vehicles, achieving a Building using the Building and Energy Management System (BEMS) replacement rate of 92% in the Tokyo metropolitan area as well as 2. Replaced old light fixtures with highly efficient ones at the the Kansai and Chukyo regions. Surugadai Building Electricity usage volume Water usage volume Final disposal volume for general waste

Unit: Millions of kW/h Unit: 1,000m3 Unit: Tons 50.8 49.1 48.4 47.9 50 46.2 120 500 428.1 102.7 103.7 101.8 95.6 40 100 86.7 400 325.7 320.8 80 312.2 257.8 30 300 60 20 200 40 10 20 100 0 0 0 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 Heat supply volume Gas usage volume Introduction of low-emission vehicles

Unit: Millions of Mcal Unit: 10,000m3 Unit: vehicles � Normal vehicles and penetration 143.5 Low-emission vehicles and penetration 34.1 33.3 140.8 124.9 �� 35 33.4 32.7 140 118.6 2,000 1,735 30 30.0 120 113.0 1,649 1,600 1,553 1,567 1,566 25 100 20 80 1,200 1,442 15 60 800 1,370 1,417 1,111 1,252 (90.4%) (92.6%) 10 40 (75.9%) (88.2%) (64.0%) 5 20 400 0 0 0 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005

Examples of voluntary environmental improvement Environment-friendly initiatives implemented Other environment-friendly initiatives actions taken throughout Japan by individual employees

P Aichi Prefecture P Promotion of Eco Two movement P Construction of environment-friendly, energy-saving Automobile eco-business recognition Employees are reviewing their everyday work and develop- Shin-Osaka Division Building (tentative name) In fiscal 2005, the Nagoya Building, Aichi Higashi Building, ing Eco Two (ecology and economy) movement initiatives, The Shin-Osaka Division Building, scheduled to be completed Kariya Building, and Toyota Building were recognized as which seek to eliminate waste, in all business locations. in March 2008, will be equipped with a solar-powered genera- automobile eco-businesses for their promotion of the imple- tor. Green procurement was employed in the purchase of mate- mentation of eco-cars. rials, and green space on the rooftop will counteract the heat island phenomenon. This building has received the top S rank- P Osaka Prefecture ing of the Osaka Comprehensive Assessment System for Registration as a business that practices eco-driving Building Environmental Efficiency (CASBEE) for its comfort and Rather than concentrating solely on Company vehicles, we Eco Two movement seals consideration of the environment. are promoting Eco Safety Driving for private vehicles as well. We promote related initiatives through the Eco Safety P Implementation of Eco Two BIZ (year-round casual P Eco Envelopes Driving News, which provides information about Eco Safety dress code) We have adopted the use of environment-friendly envelopes Driving training sessions and such things as the effects of We are promoting a change to a casual business dress code when mailing documents to customers and shareholders. By practicing Eco Safety Driving. in exchange for a one-degree increase in office temperatures using glassine paper and biodegradable organic films for the in the summer and a one-degree decrease in the winter. windows in our envelopes, we have made it possible to recycle them without having to remove the window material. Furthermore, the use of easy-to-remove soy ink also lightens the impact on the environment.

Environment-friendly Eco Two BIZ office Eco Safety Driving News envelopes

Mitsui Sumitomo Insurance CSR Report 2006 50 Contributing to the alleviation of environmental degradation through insurance and financial services

We are promoting the development and provision of environment- The popularity of eco-inspections friendly products and services through our principal businesses. and eco-maintenance is on the rise.

N Eco Balance (investment trust product Eco-inspections and eco-maintenance control the emissions of nicknamed Umi to Sora) harmful and toxic gases as well as noise and vibration and, by

MSI sells Eco Balance (nickname: Umi to Sora, or Sea and Sky), an improving fuel efficiency, reduce CO2 emissions, thereby reducing environment-friendly investment trust product that invests in com- the environmental impact that arises from operating a vehicle. As panies chosen for their excellent environmental records. The eval- of March 31, 2006, 700 members of the nationwide vehicle main- uation of companies’ environmental initiatives focuses on their tenance organization Advance Club ( p. 34) had acquired the efforts to prevent global warming. technology necessary for these services. Amid efforts to popularize and accelerate the use of such ser- N Investment in Asia ESCO Business Fund vices across Japan, we have established an Environmental Vehicle In fiscal 2005, as an insurance company, we invested for the first time Inspection Department in the Yokohama area and, as a result of in a fund that invests in ESCO businesses*1 and renewable energy promoting eco-inspections as environmental maintenance that is businesses*2 in Asia. Investing in this fund will contribute to infra- good for people and the earth, over 3,200 vehicles received eco- structure development in Asia and the prevention of global warming. inspections in one year. This initiative won an Agency for Natural Resources and Energy Director-General prize in the service station *1 ESCO (Energy service company) An ESCO is a type of company that offers comprehensive services for improving category for contribution to the environment. energy savings, including technology, facilities, personnel, and capital, where the amount of cost reductions realized through energy savings finances investment in energy conservation. *2 Renewable energy EcoAction 21 certification—a step beyond the popularization Renewable energy refers to energy, including solar, small hydropower, geother- and promotion of eco-inspections and eco-maintenance mal heat, and biomass (timber, manure, etc.), that can be continually renewed.

EcoAction21 is a simplified version of ISO 14001 standards created N Other financial services in 1996 by the Ministry of the Environment in an effort to popular- We indirectly support environment-friendly ize it among small and medium-sized enterprises. A management actions by individuals by providing eco-car system that aims to realize reductions in CO emissions as well as loans for the purchase of environment- 2 water consumption and waste emissions, friendly vehicles as well as solar loans for it can be acquired in a relatively short the purchase of solar energy devices. amount of time at a low cost. Furthermore, for environment-friendly busi- Moving forward, we plan to go one step nesses, such as clean energy companies, further in our efforts to popularize eco- in addition to financing a wind power gen- inspections and eco-maintenance by pro- eration project, we are making proposals Weather derivative moting the acquisition of EcoAction 21. We that provide stability to companies that will provide multifaceted support for pro- deal in weather derivatives. motion activities by holding seminars and EcoAction 21 providing individual consulting. Other significant environment-friendly products and services P 1992-2004 P 2005 • Environmental Impairment Liability Insurance Net de Hoken@Travel • Environmental Impairment Liability Insurance for businesses with waste emissions (completely paperless international travel insurance available on the • Global Standard Discount (general liability insurance) Internet) ( p. 22) • Fixed amount repair coverage rider (automobile insurance) Eco Cruise (pleasure boat insurance) • Soil Decontamination Insurance This product encourages recycling by automatically including coverage • Compensation Liability Insurance for Medical Waste Generators for a portion of recycling costs in the event that the policyholder has to • Property Damage Excess Repair Fees Optional Policy (automobile insurance) write off the boat. • Environmental impairment-related services for companies expanding into China

51 Mitsui Sumitomo Insurance CSR Report 2006 Responsibility to the environment

Offering environmental studies, research, Working toward communication and harmonious coexistence with society through and risk consulting environmental education activities

By providing environment-related research and consulting services, N Surugadai Building Rooftop Garden InterRisk Research Institute & Consulting, one of the Group com- The Surugadai Building has a rooftop garden that is garnering panies of MSIG, contributes to the realization of a sustainable attention as a measure to combat the heat island phenomenon in society and environmental risk management. Tokyo. At present, the rooftop garden is open every Friday to the general public to allow people to experience its splendor firsthand. N Environmental management system consulting There is a gardening corner in one section of the rooftop garden Our team of experts, including two ISO 14001 senior auditors and that has a vegetable garden that employees and local citizens can two ISO 14001 auditors who are registered with the CEAR (Center use. Chemical fertilizers are not of Environmental Auditors Registration) offer ISO 14001-related permitted, and clippings and consulting services. weeds are composted into fertil- izer, with the aim of cultivating N Environmental risk consulting vegetables and flowers that are Our experts, including senior ISO 14001 auditors and environmen- environment-friendly. Users of Surugadai Building rooftop garden Building specifications: tal counselors, conduct environmental risk analysis of industrial the garden exchange seeds and Floor area of rooftop garden facility: 2,614m2 plants and facilities and propose improvements where necessary. seedlings in this space where Green space floor area: 2,561m2 city dwellers can relax and enjoy N Soil contamination research and consulting themselves. InterRisk engages in research and consulting regarding soil contamination systems and inspection technology as well as environ- N Holding Citizens’ Environmental Course lectures mental site assessments related to the sale of land. We sponsor environmental lectures that are open to the public, inviting speakers who are experts in environmental issues and N Eco-asset consulting for corporate green spaces community contribution. InterRisk evaluates and analyzes green spaces owned or managed by P Outline of previous lectures June 10, 2005 Cool down the city, cultivate the city companies and provides consulting to maximize the potential of the September 16, 2005 Tokyo’s “heat island” phenomenon and how we can deal space at a reasonable cost and promotes multifaceted uses for it. with it March 3, 2006 Toward the creation of a comfortable city using green spaces and heat N Provision of various kinds of information June 23, 2006 Recover, raise, and use green spaces in Tokyo! InterRisk provides information through the environmental newsletter Shin Eternal. N Parent-child summer holiday classroom In fiscal 2005, the company published Trends in European Union We held an event for children to visit their mother’s or father’s Environmental Regulations, Environmental Report and CSR Report environmentally sound workplace. Through the in Data, and The Future of Environmental Laws and Regulations in Kids’ ISO 14001 Program—an environmental China. In addition to this, InterRisk publishes the quarterly education program for children—and a seed- Environmental News, which contains information about environ- planting activity on the rooftop garden, we mental activities in Japan and overseas. raised the children’s awareness of the environ- Environmental educa- ment even when at home while deepening rela- tion outing tionships between parents and children.

P Eco-Products Farm P MS Bird Watchers’ Club Through the collaboration between the environmental The MS Bird Watchers’ Club was formed through the event Eco-Products Exhibition and the rooftop garden of initiative of current and former employees. They watch the Surugadai Building, the Eco-Products Farm was birds that fly to the Surugadai Building as well as a lit- born. Mint harvested from the garden is used in herbal tle swift’s nest that has been built there, and are tea and food served at the event’s café. Soup using rosemary maintaining observation activities over the long term, Little swift harvested from the garden providing wild bird experts with data.

Mitsui Sumitomo Insurance CSR Report 2006 52 Messages from stakeholders

We are supported by a great number of stakeholders. To fulfill our responsibility to stakeholders, we are devoted to activities Customers in line with the MSIG Charter on Professional Conduct. Below, we present seven typical messages from stakeholders regarding our daily activities After the administrative measures we received in June 2006, we received many reprimands. • You have to keep in mind that you cannot do your business with- Responsibility Responsibility out customers, and you have to treat each and every one of them to the to customers with care. Do your job properly from the first step. environment • I have recommended MSI to my friends and now feel as if I don’t have a leg to stand on and that you have betrayed my trust. Please work to recover our trust and make sure something like Responsibility this never happens again. Responsibility to local communities and • I have a policy with you, but I wonder if you will actually pay my to shareholders the international community claims. It’s a real problem that a major company like you caused MSIG something like this. Conduct yourself properly. In response to reprimand calls, we explained the situation and how we planned to deal with it, and we received these words of encour- agement: Responsibility Responsibility • My representative treated me with sincerity. If every employee is to employees to agents like him, it makes customers feel they are being treated well and that they want to renew. Try your best. Responsibility to business • Regaining trust will be hard, but do your best. partners • As an MSI fan, I don’t have any complaints. Good luck.

Shareholders Agents

Masao Muraki Hiroshi Yanagisawa Analyst, Equity Research/ Advance Club Chairman, Representative Daiwa Institute of Research Ltd. Director, Yanagisawa Motors Ltd.

The regulations framework for financial institutions is undergoing Over the past few years, we at Advance Club, the agent organiza- dynamic changes, and even in investments, CSR is growing in tion for automobile maintenance shops, have been dedicating our- importance. Shareholders expect insurance companies to engage in selves to environmental initiatives, which we have even included in management that considers stakeholders other than shareholders, our year plan. Specifically, 34 of our members have acquired including policyholders, agents, employees, and partner financial EcoAction 21 certification for environmental management initia- institutions, such that shareholders can enjoy sustainable returns. tives. Initiatives include measurable reductions in environmental

For an insurance business, which requires strong credibility, caring impact in such areas as CO2 and waste emissions as well as light for policyholders is especially important. Shareholders aren’t look- and fuel expenses and disclosing the results in an environmental ing for short-term profitability or shareholder returns; rather, they activities report. MSI has been judged harshly by society as a are becoming more interested in governance and compliance sys- whole as a result of the administrative measures, and we at tems from the viewpoint of risk management. MSI has an estab- Advance Club will continue to engage in such activities as lished reputation for growth and profitability in the areas of EcoAction 21 that make a significant social contribution. We will domestic non-life insurance, life insurance, and its overseas busi- also work steadily to regain society’s trust and act together to fur- ness. I’m looking forward to seeing even more CSR initiatives to ther develop MSIG. ensure continued growth over the long term.

53 Mitsui Sumitomo Insurance CSR Report 2006 Messages from stakeholders

Business partners Employees

Philip Quaranta Junnosuke Sekiguchi Attorney at Law, Wilson Elser Moskowitz Takasakihigashi Sub-Branch, Edelman & Dicker LLP Gunma Branch, Mitsui Sumitomo Insurance

In the future, global markets will increasingly demand CSR from all I joined the Company in fiscal 2005, and my first experience was companies. Nevertheless, we should not be hasty to conclude that five months of general training for new employees. My training market demand is currently sufficient to drive all CSR initiatives. Until began positively with the most basic aspects of insurance. Before market demand unequivocally and persistently demands enhancement being placed with a particular department, I underwent practical of labor practices, preservation of the environment, and protection of training in every department. After that, I moved to the sales office, human rights, we should all be grateful for companies that commit and now that exactly a year has passed, I can honestly say that I resources to address these issues in the international community as never imagined I would experience so many ups and downs. At the well as in local communities. We at Wilson Elser have enjoyed the opportunity to assist MSI and start of my second year, I am responsible for a larger number of InterRisk in their relationships and communications with industry, aca- agents and my everyday duties are becoming more difficult. In light demia, governments, and international associations. We are very proud of that fact, I am always thinking of the best way to give the most of our relationship with MSI. We have learned from MSI’s dedication customers a greater feeling of security, and I have pulled myself and vision. We encourage all companies to emulate MSI’s persistence together and approach my work with a resolute and positive atti- in building and maintaining interactive relationships that generate the tude, which I think is important. I believe that the work of each and type of trust, loyalty, and integrity necessary to effect the long-term every employee is linked to the Company’s social responsibility. enhancement of all societies in our global community.

Local communities and the international community Environment

Elwan Wijatmoko Yoshifumi Tajiri Site Manager of “The Rehabilitation and Regeneration Project in Paliyan Wildlife Japan NPO center Sanctuary, Yogyakarta” Director & Secretary General PT. Kutai Timber Indonesia

My first impression of the Company’s CSR is that it prioritizes moving The Paliyan Wildlife Sanctuary experienced an extensive devastation forward together. It places importance on the ordinary people’s per- caused by local people in 1997-1998. Today, the area has turned into a bar- spectives. It means lending a hand to employees and agents without ren land and lost its functions as a forest. Wild monkeys that used to live in taking away their independence. It means taking an overall perspec- the forest until the devastation had befallen them now are forced to live outside the forest. They then end up damaging the plants and crops on tive, then supporting, nurturing, and giving opportunities by promot- farms. The rehabilitation activity is a crucial program for saving the devas- ing the best in culture, the arts, and sports. Rather than thinking in a tated forest. way that polarizes givers of support from receivers, CSR gives com- Through the rehabilitation project, we would achieve the following goals: panies the responsibility for creating an environment that uses the 1. improve the ecosystem, the water system, climate, and land quality, ideas of ordinary people, employees, and specialists alike, resulting 2. build an attractive habitat for wildlife, in the idea of moving forward together. However, even if the 3. help local people to build a stronger social economy. Company has a basic policy of promoting social contribution activi- It was very meaningful that PT. Asuransi Mitsui Sumitomo Indonesia con- ties, simply having a support framework that is based on employee tributed books and stationery to some elementary schools around the proj- activities won’t result in the expansion of such activities. When a ect area. Stationery has been used gratefully by children, and many pupils company experiences hard times, engaging in activities for the bene- read the books. fit of local communities is the key to a good corporate reputation. I We value Mitsui Sumitomo Insurance’s priceless contributions and expect them to continuously support interest in the rehabilitation project, eagerly await your initiatives as a member of your local community. because “No Forest, No Future; Save the Forest, Save the Earth.”

Mitsui Sumitomo Insurance CSR Report 2006 54 CSR accounting

Scope The purpose of CSR accounting This report is concerned with activities by Mitsui Sumitomo Insurance Co., Ltd., Mitsui Sumitomo Kirameki Life Insurance Co., Ltd., and InterRisk Research Institute & Consulting, Inc., as well as the Mitsui Sumitomo Insurance Welfare Foundation and the Mitsui Sumitomo Insurance Culture Foundation. However, MSIG recognizes CSR activities as a strategic investment in attain- when possible, figures for environmental protection activities have been com- ing sustainable development. We recognize and measure the costs piled based on activities by the entire domestic MSIG. and effects of CSR-related activities as much as possible. Our purposes in conducting CSR accounting are to create a tool to com- Method of calculation 1) Composite costs are divided by rational or simple division standards. municate with our stakeholders and facilitate deeper entrenchment 2) Personnel costs are calculated based on personnel unit prices and the propor- of CSR into our corporate culture. tion of jobs related to the activities being considered. 3) Regarding environmental protection activities, classification and calculations are based on the Ministry of the Environment’s 2005 Environmental Accounting Guidelines. 4) Cost reduction effects and environmentally harmful substance reduction Features of MSIG’s CSR accounting effects of environmental protection activities are calculated using simple com- parisons with the previous fiscal year. 5) Figures are rounded to the units shown. We have established the MSIG CSR accounting model based on an environmental accounting framework. We define “CSR accounting standards” in internal manuals that describe our objects and methods of measuring in an effort to conduct more meaningful Analysis of fiscal 2005 results CSR accounting. We measure the costs and effects of social contribution and welfare (philanthropy) activities, ethics and compli- CSR-related costs totaled ¥8.8 billion, an increase of ¥1.9 billion ance activities, and environmental protection activities. compared with the previous fiscal year. Social contribution and CSR-related costs are calculated from expenses and losses welfare (philanthropy) costs increased ¥0.3 billion from the previ- based on financial accounting as well as the difference between ous fiscal year, to ¥1.4 billion; ethics and compliance costs rose the ordinary prices of products and services and the lower prices ¥0.9 billion, to ¥3.0 billion; and environmental costs totaled ¥4.3 at which we offer them. With regard to CSR-related effects, those billion, up ¥0.8 billion. The increase in ethics and compliance costs that contribute profits under financial accounting are considered was primarily a result of the construction of systems and changes “internal effects,” while influences on general society are classi- to office layouts in response to the Personal Information Protection fied as “outside effects.” Furthermore, “economic effects” are Law. An increase in the number of vehicles covered by automobile determined by measuring in monetary units, and items classified insurance discounts for eco-friendly cars and the resulting as “other effects” are measured in non-monetary, quantitative upstream and downstream costs led to the increase in environ- terms or described qualitatively. mental protection costs. Looking at CSR-related effects, total internal economic effects came to ¥0.3 billion, a slight decrease compared with the previous To compare costs and effects, it is necessary to take into consideration other effects for which monetary conversion is not possible. fiscal year. This was attributable to an increase in paper consumption costs related to the revision of documents that explain important items to customers, resulting in a negative pull on effects P Basic items corresponding to business area costs.

Accounting period Outside economic effects totaled ¥1.5 billion, an increase of Corresponds to the fiscal year from April 1, 2005, to March 31, 2006. (We have ¥0.7 billion. An increase in monetary donations as well as an provided figures for costs and economic effects for the previous period for pur- increase in resource consumption reduction effects resulting from poses of comparison.) special fixed amount coverage for repairs and special coverage for excessive repairs of accident property damage, which are reflected in upstream and downstream costs, are the main reasons for the increase. 55 Mitsui Sumitomo Insurance CSR Report 2006 CSR accounting

L CSR accounting statement Unit: ¥ million

Internal effects Outside effects CSR-related costs Economic effects Economic effects CSR-related effects Other Other Fiscal Fiscal Fiscal Fiscal effects Fiscal Fiscal effects 2004 2005 2004 2005 2004 2005 Costs related to donation activities 564 840 Effect of donation activities 0 1 — 546 825 *1

Costs related to providing facilities, etc. 353 340 Effects related to providing facilities, etc. 46 52 — 6 6 — Social contribution Costs related to social contribution Effects related to social contribution 156 154 — — — 121 122 *2, *3 and welfare and support activities and support activities activities Common costs 59 55

Subtotal  1,132 1,390 Subtotal  47 53 — 673 953 — Costs related to legal and other types Effects of legal and other types 890 1,700 12 12 *4 — — — of compliance of compliance Information and communications costs Information and communications effects 543 571 — — *5 — — — (education and research costs) (education and research effects) Ethics and compliance Monitoring costs 418 484 Monitoring effects — — *6 — — — activities Costs related to the provision of products 232 235 Effects of providing products and services 147 166 — — — *7 and services Subtotal  2,082 2,989 Subtotal  159 177 — — — —

(Note 1) Effects corresponding to business area costs Business area costs 169 312 (Note 2) 48 –48 — — — *8, *9 Effects corresponding to upstream Upstream and downstream costs 3,160 3,827 71 68 — 194 588 *10, *11 and downstream costs Management activities costs (Note 1) 128 112 Other environmental protection effects — — — — — *12 Environ mental Research and development costs 13 3 protection activities Social contribution costs 47 35

Common costs 2 3

Subtotal  3,519 4,291 Subtotal  119 20 — 194 588 —

Common CSR common costs 87 79

Total 6,820 8,750 325 250 — 867 1,541 —

*1 P Donations of courtesy products for shareholders, etc. (a total of 69 *4 P Introduced various new systems in response to the Personal *8 P Reduction of energy consumption [Number of buildings included in organizations) Information Protection Law the calculations]: P Donations of 4,340 calendars to exchange students and 643 per- P Improvement of Web system to effect immediate responses to • Electricity usage volume...... 766,620kWh [33] sonal planners (30 organizations) customer complaints • Gas usage volume...... 27,165m3 [16] P Collected and donated 120.01kg of used postage stamps, 16,781 P Establishment of compliance framework and increase in personnel • Heat supply usage volume...... 8,243,283MJ [4] used prepaid cards, 2,789 used postcards, and 2.35kg of foreign in charge of compliance • Gasoline usage volume...... 430s coins P Improvement of support system for preventing and discovering • Water usage volume...... 3,709m3 [18] *2 P Smile Heart Club activities legal and other infringements • Paper usage volume...... 127 tons • Sponsored seven charity concerts (See pages 16–18) (See pages 49–50) • Supported the world’s children through the creation and market- *5 P Thorough compliance through cyclical education at the Head *9 P Reduction of atmospheric emissions (from report data based on ing of charity greeting cards (participation by 396 individuals Office the Automobile NOx/PM Law) and groups) P Thorough compliance through implementation of concurrent train- • NOx...... 101kg • Donated hand-knit sweaters to children in Mongolia and the ing for employees and agents • Particulate matter (PM)...... –1kg former Yugoslavia (1,215 sweaters, 375 scarves, 416 hats, 35 P Reconfirmation of compliance through implementation of review P Reduction of emissions into water and soil...... 464m3 [14] vests) tests for employees and agents P Reduction of emissions of waste...... –66 tons [18] • Donated 1,048 picture books to children in Laos and Cambodia P Information exchange among all nationwide compliance personnel (See pages 49–50) P Blood donation and bone marrow donor registration (575 blood (See page 16) *10 P Activities by InterRisk Research Institute & Consulting donors and 65 bone marrow donors registered) *6 P Created reporting systems (sales and claims departments) to mon- • Sponsorship and lectures given at environmental protection (See page 43) itor infringements of laws and other guidelines seminars...... 8 *3 P Popularization and support of women’s judo and women’s track P Implementation of cyclical verification tests at all nationwide • Media releases (details and proposals of activities)...... 2 and field as sports promotion activities sales bases by nationwide compliance personnel (See page 52) (See page 44) (See page 17) *11 P Number of “eco-car” discounts given...... 3,445,000 *7 P Activities by InterRisk Research Institute & Consulting (an increase of 670,000 compared with the previous year) • Open seminars on internal management and compliance for *12 P Number of facilities implementing car eco-inspections...... 760 companies (three seminars) (increase of 17 compared with the previous year) • Media releases (details and proposals for activities) (7 items) (See page 51) (See page 26)

Notes: 1. Fiscal 2004 business area costs and administrative activities’ costs included in environmental protection activities’ costs have been changed due to an increase in the number of buildings included in environmental impact data for the current fiscal year and changes made to previous years to maintain consistency. Please note that the same applies to “Distribution among stakeholders and relationship with CSR accounting.” Notes: 2. Fiscal 2005 effects corresponding to business area costs, included in environmental protection effects, are negative as a result of a ¥1.5 billion increase in paper-use costs stemming from the revision of documents that explain important items to customers.

Mitsui Sumitomo Insurance CSR Report 2006 56 L Principal breakdown of CSR-related costs and effects (economic effects)

Classification Principal breakdown

Social contribution Costs related to donation activities • Donations made with a social contribution or welfare purpose ( p. 43) and welfare costs • Donations and monetary assistance from foundations ( pp. 42, 44)

Costs related to providing facilities, etc. • Maintenance and operation costs for Shirakawa Hall (includes depreciation expenses) ( p. 44)

Costs related to social contribution and support • Automobile insurance welfare vehicle discount ( p. 42) activities • Support for Smile Heart Club activities ( p. 43) • Maintenance costs for sports promotion facilities (includes depreciation expenses) ( p. 44)

Common costs • Personnel expenses related to all social contribution and welfare activities ( p. 41)

Ethics and compli- Legal and other compliance costs • Costs related to compliance activities (30% of composite costs) ( p. 16) ance costs Information and communications costs • Personnel and physical expenses related to human rights enlightenment training • Costs related to compliance activities (40% of composite costs) ( p. 16)

Monitoring costs • Costs related to compliance activities (30% of composite costs) ( p. 17)

Cost of providing goods and services • Costs related to providing InterRisk Research Institute & Consulting’s ethics and compliance services ( p. 26)

Environmental Business area costs • Pollution control costs

CSR-related costs protection costs • Environmental protection costs • Resource recycling costs

Upstream and downstream costs (includes cost • Automobile insurance “eco-car”discounts ( p. 42) of providing products and services) • Costs related to providing InterRisk Research Institute & Consulting’s environmental services ( p. 52)

Management activities costs • Costs related to installing and operating environmental management systems ( p. 46) • Costs related to planting trees on the roof of the Surugadai Building ( p. 52)

Research and development costs • InterRisk Research Institute & Consulting’s research and development costs ( p. 52)

Social activities costs • Membership dues and donations to environmental protection groups

Common costs • Costs common to environmental protection activities ( p. 45)

Common costs Common CSR costs • Companywide CSR activity costs ( p. 7)

Social contribution Effects related to donation activities • Amount of contributions and other donations, monetary value of donated goods (outside effects) ( p. 43) and welfare effects • Amount of disposal fee cutbacks through the donation of goods (internal effects)

Effects related to providing facilities • Income generated by providing facilities (internal effects)

Effect related to social contribution and support • Difference in usage rate for MSI Cultural Foundation tickets and usual market rate ( p. 44) activities

Ethics and compli- Legal and other compliance effects • Adjusted labor money and tax payments for disabled persons (internal effects) ( p. 40) ance effects Effects of providing products and services • InterRisk Research Institute & Consulting’s sales related to the provision of ethics- and compliance-related services ( p. 26)

CSR-related effects Environmental Effects corresponding to business area costs • Reduction in electricity, gas, heat supply, and gasoline expenses protection effects • Amount of reduction in water and paper use expenses • Amount of reduction in sewage treatment expenses • Amount of reduction in waste treatment expenses ( pp. 49, 50)

Effects corresponding to upstream • Sales related to provision of InterRisk Research Institute & Consulting’s environmental services ( p. 52) and downstream costs • Resource consumption reduction effects of special coverage for automobile insurance* (outside effects) ( p. 51)

* The MSI Group participates in the Club ECOFACTURETM working group, which evaluates the external economic Basis for calculation methods: benefits of business activities on society and the environment. Based on the results of research conducted by the This insurance’s effect on expenses for parts and raw materials as well as landfills, whose lives have been pro- group, both special coverage products for automobile insurance have been calculated to have the effects shown longed, has been calculated based on assumptions of four years and a discount rate of 1.1%. (Number of vehicles below. studied: 10,817 vehicles in 2004, 12,050 in 2005) * 1) Checks resource consumption (checks volume of usage of parts and raw materials for new automobiles) * 2) Extends the life of final disposal sites for industrial waste (checks shredder dust generated by all scrapped vehicles)

57 Mitsui Sumitomo Insurance CSR Report 2006 CSR accounting

Reference index Calculation: method CSRV: CSR value (contribution to corporate value) CSRV = PD / r X LD X ED From the standpoint of risk management and brand image mainte- PD: “Prestige Driver” nance and improvement, we believe that CSR initiatives contribute to Price advantage: Additional profit generated by CSR activities stable and sustainable growth for future profits in our economic and LD: “Loyalty Driver” business activities. However, we cannot numerically measure this Stable sales volume (customer loyalty): value by comparing the costs and effects on the CSR accounting Conservative correction of fluctuations in additional profit statement. CSRV is key in converting the intangible value generated ED: “Expansion Driver” by CSR activities into a quantitative value and estimates corporate Expandability into other business fields: Reflects additional profit from busi- value created by CSR activities, using as a reference the brand valua- nesses other than casualty insurance tion model laid out by the Ministry of Economy, Trade and Industry’s r: “Discount rate” = 2% Committee on Brand Value Evaluation. Although the terms PD, LD, and ED are taken from the brand valuation model shown above, certain adjustments have been made to the brand valuation for- CSRV: Contribution Estimated corporate value generat- ¥62.9 billion mula. For instance, instead of the brand management fees included in the to corporate value ed by CSR activities brand valuation model, PD includes CSR-related costs (other than costs related to the provision of products and services). To report a more accurate excess Calculation: Basic method profit rate, insurance premiums have been used in place of net sales, and Corporate social responsibility value (CSRV) is calculated by comparing the addi- claims and expenses have been used in place of cost of sales. Due to restric- tional profit due to be derived from CSR activities in the future with current cor- tions on data for the year under review, CSR-related costs have been calculat- porate value, including the effect on stability and other lines of business. ed based on data for the preceding four years.

Reference: Distribution among stakeholders and relationship with CSR accounting The CSR accounting statement for MSIG focuses on three areas: relationship with the economic effect (monetary distribution) on social contribution and welfare (philanthropy) activities, ethics and our various stakeholders is approximated in the table below. compliance activities, and environmental protection activities. However, we cannot measure the importance of our various For social contribution and welfare (philanthropy) activities and stakeholders by the monetary values associated with them in this environmental protection activities, the calculated costs and their table.

Distribution among stakeholders and relationship with CSR accounting Unit: ¥ billion

Fiscal 2004 Fiscal 2005 Principal items

Customers 1,314.3 1,332.8 Net premiums written Distributed Other 113.6 36.7 Provision for underwriting reserve, investment income (expenses), and other adjustments capital Total  1,428.0 1,369.5

Customers 845.9 787.3 Net claims, provision for outstanding claims

Agents 214.8 219.9 Agent fees

Executives and regular employees 144.6 146.6 Personnel costs, directors’ bonuses Business partners (contractors and 105.3 103.2 Non-personnel expenses, reinsurance fees suppliers) Local and Taxes 52.1 42.0 Income taxes, taxes and public charges Distribution international * Due to the fact that providing amount exact calculations of distribu- communities Social contribution 1.1 1.4 Social contribution and welfare costs (please see the CSR accounting statement) tion figures by stakeholders is challenging, the table at left Environment 3.5 4.3 Environmental protection costs (please see the CSR accounting statement) has been created based on simplified figures from the non- 60.7 64.8 consolidated financial state Shareholders Net income (excluding directors’ bonuses) (Shareholder ments. Discrepancies within the 13.6 18.5 scope of CSR accounting have dividends) been adjusted in the “Other” row. Total  1,428.0 1,369.5

Mitsui Sumitomo Insurance CSR Report 2006 58 Reading the MSI CSR report

For Mitsui Sumitomo Insurance (MSI), 2006, marking five years clear that realizing and maintaining reform will require extraordi- since its foundation, was a year in which the pain of strict admin- nary resolve. MSI depends on agents to serve as its link to cus- istrative measures was felt throughout the Company, a year in tomers rather than dealing with customers directly, meaning that which it engaged in reflection and one in which it resolved to the central issue of maintaining its customer base will require a regain customers’ trust. From the President’s message and the great amount of imagination and ingenuity. Four pages of this special feature, “Announcement of administrative measures and report express MSI’s commitment to its responsibility to agents, our new start” to the second half of the report in which the but I hope that the Company will not neglect the need for regular Company’s responsibility to stakeholders is discussed by category, self-questioning and inspections at every level to ensure that it is the report is permeated with the feeling. This is a time when most doing things properly. Japanese are at a loss as they face the advent of an ageing soci- As the chairing company for the steering committee of the ety and feel insecure about the future. I believe that is why peo- United Nations Global Compact (GC) Japan Network, MSI has ple’s desire for security is growing stronger and the roles and been at the forefront of networking activities. Although I hope to responsibilities of insurance companies who provide security, as continue to see aggressive CSR activities in the future, one of the opposed to general products and services, are becoming more most important objectives of the GC is thoroughly educating prominent. employees about its principles. In the book Dearu koto to Suru MSI deserves credit for the section that honestly explains in koto (the way things are and need to be done), Masao Maruyama minute detail the administrative measures and their origins and points out that, with freedom and democracy, if you do not make a background. Within that section, the part that mentions product conscious effort to maintain and develop them and just allow them development caught my eye. Looking at the problems as a whole, to remain as they are, a reversal will set in. Corporate activities the Company’s mind-set with regard to product development was are the same in that if a company is content in its status as a good not based solely on customer needs; rather, it was about compet- company or a model company, it will begin to unravel. Reforms of ing with other companies in the industry, and the development of organizations and systems are executed by each employee. I wel- special coverage with this mind-set resulted in complex products. come this report as a sign of MSI’s Companywide determination to There was a need for the collaboration of many sections— continue work that it can be proud of in its various roles in society. research into similar products as well as education and training for employees and agents—but it was inadequate and, furthermore, the system for post-market monitoring of product flaws and business operation was insufficient. Upon analysis and reflection, the Company has established the Audit Committee, more than half of the members of which are outside directors; reformed its product development system; and Akio Nomura established the Claims Handling Consulting Section, which deals with complaints about claims handling, as well as the Claims Visiting Professor, The Okuma School of Public Management, Payment Examination Council, which includes outside attorneys Waseda University and consumer representatives. These are all good responses, but Born in Okayama Prefecture, Professor Akio Nomura began working at Asahi having such bodies in place is common sense in most other indus- Shimbun upon graduation from International Christian University. There he worked tries. Given that the environment of intense product development at the political desk, as a Washington correspondent, as an editorial writer, as the chief of the American bureau, as the assistant managing editor, and as the Director competition resulting from deregulation of the insurance indus- of the Asahi Shimbun Research Center. From 2003 through the end of 2005, he was try—the backdrop for this incident—will continue to exist, it is the Director of the United Nations Information Center in Tokyo. He has been in his current post since April 2006.

59 Mitsui Sumitomo Insurance CSR Report 2006 From the editor

MSI’s CSR report is an important communication tool that allows readers to understand the Company and allows us to receive a wide range of feedback that helps us to become a better company. The report was written by members of the CSR Section as well as employees who are in charge of initiatives being taken to improve the relationship of trust that we have with stakeholders, and we have tried to clearly communicate to readers what our everyday activities are like. Regarding the recent administrative measures, we strove to explain their origins and background as well as describe as specifically as possible the initiatives we are taking to improve business operations. It would greatly please us if many people read this report and find that it adequately expresses the sincere feelings of each and every MSI employee about recovering your trust. At MSI, meetings have been held at every workplace to ask employees to think about CSR and how it relates to them, and we are striving to practice CSR in our individual duties. As Waseda University’s Professor Akio Nomura commented, continuing these efforts is of the utmost importance. We would greatly appreciate it if you could share with us your opinions and impressions regarding the initiatives described in this report so that we can incorporate them into future initiatives.

CSR Section Corporate Planning Department Mitsui Sumitomo Insurance Co., Ltd.

MSI CSR Report 2006 Publisher: Corporate Social Responsibility Section, Corporate Planning Department, Mitsui Sumitomo Insurance Co., Ltd. 2-27-2 Shinkawa, Chuo-ku, Tokyo 104-8252 Tel.: +81 3 3297 4632 Fax: +81 3 3297 6888 URL: http://www.ms-ins.com http://www.ms-ins.com/english/index.html