Tokio Marine Holdings, Inc

Tokio Marine Holdings 2009 Annual Report Annual Report 2009

http://www.tokiomarinehd.com/

Tokio Marine Nichido Building Shinkan, 2-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-0005, Japan phone: +81-3-6212-3333

Member of Financial Accounting

Standards Foundation Printed in Japan WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e Overseas offi ces: Located in 399 cities in 36 countries and regions Branches of Tokio Marine & Nichido • Expatriate staff: 173 • Local staff: Approx. 14,600 Representative and Liaison Offi ces of Tokio Marine & Nichido Underwriting Agents of Tokio Marine & Nichido • Claims agents: Located in 250 countries and regions Subsidiaries and Affi liates

Middle & Near East U.A.E. Dubai Tokio Marine Middle East Limited (Dubai) Al-Futtaim Development Services Co. (Dubai) Saudi Arabia Jeddah, Riyadh and Al Khobar Hussein Aoueini & Co., Ltd. (Jeddah, Riyadh and Al Khobar) Tokio Marine Saudi Arabia Limited (to be established) Tokio Marine Group Corporate Philosophy Bahrain The Arab-Eastern Insurance Co. Ltd E.C. (Manama) Turkey Allianz Sigorta A.S. (Istanbul) With customer trust as the foundation for all its activities, Tokio Marine Group continually strives Allianz Hayat ve Emeklilik A.S. (Istanbul) to raise corporate value. Oceania & Micronesia Australia Sydney and Melbourne • Through the provision of the highest quality products and services, Tokio Marine Group aims to Tokio Marine Management (Australasia) Pty. Ltd. (Sydney, Melbourne and Adelaide) deliver safety and security to all our customers. New Zealand IAG New Zealand Insurance Limited (Auckland) Guam Guam • By developing sound, profi table and growing businesses throughout the world, Tokio Marine Tokio Marine Pacifi c Insurance Limited (Guam) Group will fulfi ll its mandate to shareholders. Tokio Marine Pacifi c Insurance Limited c/o Nanbo Guam, Ltd. (Guam) Tokio Marine Pacifi c Insurance Limited c/o Calvo’s Insurance Underwriters, Inc. (Guam) • Tokio Marine Group will continue to build an open and dynamic corporate culture that enables Commonwealth of the Pacifi ca Insurance Underwriters, Inc. (Saipan) each and every employee to demonstrate his or her creative potential. Northern Mariana Islands Calvo’s Insurance Underwriters (CNMI), Inc. (Saipan) • Acting as a good corporate citizen through fair and responsible management, Tokio Marine Asia Korea Seoul Sub-branch Group will broadly contribute to the development of society. People’s Republic Beijing, Tianjin, Dalian, Chengdu, Nanjing, Suzhou, Hangzhou, Guangzhou and Shenzhen of China The Tokio Marine & Nichido Fire Insurance Company (China) Limited (Shanghai) Zhongsheng International Insurance Brokers Co., Ltd. (Beijing) Sino Life Insurance Co., Ltd. (Shenzhen, Shanghai and 20 other cities) Hong Kong Hong Kong The Tokio Marine and Fire Insurance Company (Hong Kong) Limited (Hong Kong) Taiwan Taipei Tokio Marine Newa Insurance Co., Ltd. (Taipei and 25 other cities) Philippines Malayan Insurance Co., Inc. (Manila and 27 other cities) Vietnam Vietnam International Assurance Company (Hanoi and Ho Chi Minh City) Thailand The Sri Muang Insurance Co., Ltd. (Bangkok and 16 other cities) Millea Life Insurance (Thailand) Public Co., Ltd. (Bangkok) Malaysia Tokio Marine Insuranse (Malaysia) Berhad (Kuala Lumpur and 19 other cities) TM Asia Life Malaysia Bhd. (Kuala Lumpur and 15 other cities) Tokio Marine Global Re Limited (Labuan) Singapore Tokio Marine Asia Pte. Ltd. (Singapore) Tokio Marine Insurance Singapore Ltd. (Singapore) TM Asia Life Singapore Ltd. (Singapore) On the Cover: Mangrove Afforestation Project Tokio Marine Retakaful Pte. Ltd. (Singapore) Tokio Marine is committed to reducing environmental impact as one of its major corporate social responsibility activities. In 1999 we started our mangrove afforestation TM Claims Service Asia Pte. Ltd. (Singapore) project in South East Asia and over the last ten years have planted 5,901 hectares (14,582 acres) of forests in six countries. An additional 2,300 hectares (5,683 acres) will Brunei Tokio Marine Insurance Singapore Ltd. (Bandar Seri Begawan) be added over the next fi ve years under the project, which is being undertaken in partnership with the following nongovernmental organizations: Action for Mangrove TM Asia Life Singapore Ltd. (Bandar Seri Begawan) Reforestation (ACTMANG), the Organization for Industrial, Spiritual and Cultural Advancement-International (OISCA) and the International Society for Mangrove Indonesia P.T. Asuransi Tokio Marine Indonesia (Jakarta and 7 other cities) Ecosystems (ISME). India New Delhi Mangrove trees help prevent global warming by absorbing large volumes of carbon dioxide and can serve as bulwarks to protect people from tsunamis and other IFFCO-TOKIO General Insurance Co. Ltd. (New Delhi and 110 other cities) hazards. In the tsunami that occurred in the Indian Ocean as a result of the earthquake off the coast of Sumatra in December 2004, villages situated behind mangrove Myanmar Yangon plantations were protected from the tsunami. In addition, by providing fi shery, forestry and other resources essential to local residents’ lifestyles, mangrove trees contribute to sustainable development in the areas in which they are planted. This, in turn, stabilizes and improves the lives of these residents.

Note: The forecasts appearing on this Annual Report are based on information available as of the publication date of the Report. Actual results may differ materially due to various factors. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 127 Tokio Marine Holdings Annual Report 01 Contents 2009 01 INTRODUCTION At a Glance 2 Topics 4

02 MANAGEMENT 02 President Message 8 Directors & Auditors 10

02 BUSINESS REVIEW Business Highlights 11 Business Overview 15

03 CORPORATE STRATEGY AND PROFILE 03 Corporate Strategy 20 Special Feature: International Business 24 Proﬁ le of the Tokio Marine Group 28

04 MANAGEMENT SYSTEM Basic Policies for Internal Controls 33 Corporate Governance 35 Compliance 36 04 Information Management 38 Risk Management 39 Corporate Social Responsibility 41 Internal Audit 44 Disclosure and Investor Relations 45

05 PERFORMANCE Change in Key Business Indicators (Consolidated Basis) 48 05 Financial Information 49 Solvency Margin Ratio 103 Interest-rate Sensitivity of ALM Surplus Value 106 Embedded Value 107 Statutory Reserve 112

06 CORPORATE DATA Stock Information 114 06 List of Directors and Corporate Auditors 117 Organizational Chart 122 Tokio Marine Holdings and Its Subsidiaries 123 Major Subsidiaries 124 History of the Tokio Marine Group 125 Worldwide Network of the Tokio Marine Group 126 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 1 INTRODUCTION01

At a Glance

Overview of Fiscal 2008 Results

• For the fi scal year ended March 31, 2009, consolidated ordinary income amounted to 3,503,102 million yen, of which underwriting income made up 3,130,076 million yen. Ordinary expenses totaled 3,518,230 million yen, which included underwriting expenses of 2,232,902 million yen. Ordinary profi t declined 194,199 million yen from the previous fi scal year for a loss of 15,128 million yen and net income fell 85,624 million yen, to 23,141 million yen. • In the property and casualty insurance business, Tokio Marine & Nichido’s underwriting profi t totaled 73,812 million yen, up 34,435 million yen from the previous fi scal year, although ordinary profi t and net income both declined as a result of turmoil in the fi nancial markets. Similarly, underwriting profi t at Nisshin Fire amounted to 3,231 million yen, up 3,868 million yen. However, both ordinary profi t and net income resulted in losses due to the unsettled fi nancial markets. • In the life insurance business, Tokio Marine & Nichido Life recorded 15,914,400 million yen in policies in force for individual insurances and individual annuities, up from 14,739,863 million yen a year earlier. Likewise, Tokio Marine & Nichido Financial Life’s policies in force totaled 2,642,299 million yen, higher than the 2,335,997 million yen last year.

Consolidated Business Results (Yen in millions) FY2008 FY2007 Difference Amount Percentage Amount Percentage Ordinary income 3,503,102 100.00 3,710,066 100.00 (206,963) Underwriting income 3,130,076 89.35 3,312,472 89.28 (182,396) Investment income 306,664 8.75 342,121 9.22 (35,457) Other ordinary income 66,361 1.89 55,471 1.50 10,890 Ordinary expenses 3,518,230 100.43 3,530,994 95.17 (12,764) Underwriting expenses 2,232,902 63.74 2,683,605 72.33 (450,702) Investment expenses 726,659 20.74 326,884 8.81 399,775 Operating and general administrative expenses 519,928 14.84 482,160 13.00 37,767 Other ordinary expenses 38,739 1.11 38,344 1.03 395 Ordinary proﬁ t (loss) (15,128) (0.43) 179,071 4.83 (194,199) Extraordinary gains 83,761 2.39 31,199 0.84 52,562 Extraordinary losses 21,696 0.62 35,683 0.96 (13,987) Net income 23,141 0.66 108,766 2.93 (85,624)

Tokio Marine Group’s Credit Ratings (As of July 1, 2009) Tokio Marine & Tokio Marine Tokio Marine & Tokio Marine & Rating agency Type Nisshin Fire Nichido Financial Holdings Nichido Nichido Life Life S&P Insurer Financial Strength Rating — AA / Stable A+ / Stable AA / Stable — Moody’s Insurer Financial Strength Rating — Aa2 / Stable — — — Fitch Ratings Insurer Financial Strength Rating — AA- / Negative — — — A.M. Best Best’s Rating — A++ / Stable — — — Rating and Investment Senior Long-term Credit Rating — AA+ / Stable AA / Stable — — Information (R&I) Insurance Claims Paying Ability — — — AA+ / Stable AA+ / Stable Japan Credit Rating Long-term Rating AAA / Stable AAA / Stable — — — Agency (JCR) Insurance Claims Paying Ability — — — AAA / Stable — WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 2 Tokio Marine Holdings, Inc. 2009 Annual Report 01 Assets, Liabilities and Shareholders’ Equity (Consolidated) (Yen in millions) FY2008 FY2007 Difference Assets 15,247,223 17,283,242 (2,036,018) Liabilities 13,607,708 14,703,902 (1,096,194) Net assets 1,639,514 2,579,339 (939,824) Total liabilities and net assets 15,247,223 17,283,242 (2,036,018)

Major Indicators for the Property and Casualty Insurance Business (Yen in millions) Tokio Marine & Nichido Nisshin Fire FY2008 FY2007 FY2008 FY2007 Net income 71,104 122,992 (10,315) 1,962 Ordinary profi t (loss) 69,624 183,974 (16,179) 2,622 Loss ratio 67.4% 61.6% 62.6% 61.4% Expense ratio 34.6% 31.5% 38.4% 37.1% Combined ratio 102.1% 93.1% 101.0% 98.5% Profi tability Profi Underwriting balance ratio -2.1% 6.9% -1.0% 1.5% Underwriting profi t 73,812 39,376 3,231 (637) Total net assets 1,435,527 2,326,624 64,483 86,549 Solvency margin ratio 696.8% 957.8% 737.9% 899.3% Soundness

Change in net premiums written -5.2% -0.8% -4.1% -2.1% Growth potential Net premiums written 1,813,412 1,912,180 135,916 141,684

Scale Direct premiums written (including deposit premiums from policyholders) 2,032,131 2,126,746 149,735 155,696 Notes: 1. Loss ratio = (Net claims paid + Loss adjustment expenses) ÷ Net premiums written x100 2. Expense ratio = (Agency commissions and brokerage + operating and general administrative expenses) ÷ Net premiums written x100 3. Combined ratio = Loss ratio + Expense ratio 4. Underwriting balance ratio = 100% - Combined ratio 5. Solvency margin ratio • Property and casualty insurance companies maintain reserves for paying claims when events covered by insurance issued occur and for the payout of funds at maturity for savings-type insurance. It is also necessary for them to maintain sufﬁ cient resources to cover payments in the event of either a major disaster or an unexpected crisis, such as a major decline in the price of assets owned by an insurance company. • Calculated in accordance with the Insurance Business Law, the solvency margin ratio is an indicator that compares the claims payment ability provided by the capital and reserves owned by a property and casualty insurance company against the total amount of risk in a situation that exceeds expectations. 6. Net premiums written: Direct and assumed premiums written, less ceded insurance premiums 7. Direct premiums written: Direct premiums, less canceled direct refunds and other direct refunds (including deposit premiums)

Major Indicators for the Life Insurance Business (Yen in millions) Tokio Marine & Nichido Life Tokio Marine & Nichido Financial Life FY2008 FY2007 FY2008 FY2007 Insurance premiums and others 437,688 407,697 452,289 518,869 Annualized new premiums 43,131 36,615 44,288 50,602 Ordinary profi t (loss) 5,555 6,025 10,099 (6,422) Net income 0 0 10,078 (6,478) Core operating profi t 522 427 (827) (6,105) Solvency margin ratio 2,596.7% 2,766.7% 1,057.5% 1,157.5% Policy amount in force 15,914,400 14,739,863 2,642,299 2,335,997 New policy amount 2,450,159 2,106,742 443,071 508,282 Notes: 1. Additional transfer 19,822 million yen (in fi scal 2007) and 11,095 million yen (in fi scal 2008) to Tokio Marine & Nichido Life’s policy reserves were made on top of its provisions to policy reserves calculated based on the fi ve-year Zilmer method. These amounts were included in basic expenses (policy reserve provision) within core profi ts. 2. Annualized new premium: Annual premium calculated by dividing total paid premiums for the entire term of new policies for individual insurance and annuities by the number of years in the insurance term. 3. Core operating profi t: An indicator of earnings potential in insurance operations, calculated by deducting gains on the sale of securities and other capital gains as well as one-time profi ts from ordinary profi t. 4. Policy amount in force, new policy amount: Total of new policies and policies in force for individual insurances and individual annuities WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 3 INTRODUCTION01

Topics: Tokio Marine Holdings

Acquisition of Philadelphia Consolidated, a U.S. P&C Insurance Group Through its subsidiary Tokio Marine & Nichido Fire Insurance Co., Ltd., Tokio JOC Sponsor Contract Signed Marine Holdings acquired Philadelphia Tokio Marine Holdings became Consolidated Holding Corp. (PHLY), a Gold Partner in an agreement a U.S. P&C insurance holding company, with the Japanese Olympic and its group companies on Committee (JOC). A JOC Gold December 1, 2008. Partner is the highest level of PHLY is a leading insurance group sponsorship for Japanese sports with a highly competitive business model under the JOC Partnership based on excellent product development Program. capabilities mainly in specialty products Tokio Marine Holdings focused on targeted commercial markets, continues to support sports in disciplined operations and marketing Japan by contributing to the JOC expertise utilizing a variety of distribution and other athletic groups that channels. It has achieved far superior Establishment of represent Japan in international growth and proﬁ tability than its peers in E. design Insurance Co., Ltd. tournaments and competitions. the U.S. P&C insurance industry. By combining PHLY’s product develop- Tokio Marine Holdings established ment capabilities and strong marketing E. design Insurance Preparatory skills with Tokio Marine’s superior credit Co., Ltd. through a business and rating, ﬁ nancial strength, large under- capital tie-up with NTT Finance writing capacity and a global network, Corporation, a subsidiary of PHLY will expand operations further and Nippon Telegraph and Telephone develop new businesses. Corporation, in January 2009. After it acquired a non-life insurance permit from the Financial Services Agency, the company name was changed to E. design Insurance Co., Ltd. and began operating on June 13, 2009, primarily selling automobile insurance through mobile phone networks and the internet. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 4 Tokio Marine Holdings, Inc. 2009 Annual Report Topics: Group Companies

01 Launch of Secom Home Security Tokio Marine Package Tokio Marine & Nichido Fire Insurance Co., Ltd. forged an agreement with Secom Co., Ltd., the most widely Carbon Neutral Certifi cation recognized brand name in home Tokio Marine & Nichido has security in Japan, and began to received third-party certifi cation for exclusively sell at its main agents the going carbon neutral at all of its Secom Home Security Tokio Marine business offi ces in Japan as of the Package, a home security system end of fi scal 2007. This certifi ca- jointly developed specifi cally for the The Tokio Marine & Nichido Fire tion was the result of efforts to Tokio Marine Group. Insurance Company (China) Limited reduce CO2 emissions pertaining to The Secom Home Security Tokio Starts Operations the Company’s business activities, Marine Package is an exclusive line- On November 1, 2008, The Tokio procure green electricity and offset up of affordably priced entry-level Marine & Nichido Fire Insurance emissions. To offset emissions, the products with basic features Company (China) Limited began Company purchases emission designed as a home security system operations. This Chinese subsidiary credits and plants mangrove trees for families to help prevent crime has taken over the operations of the to absorb CO2. Tokio Marine & and respond during fi res and other Tokio Marine & Nichido Shanghai Nichido is the fi rst fi nancial institu- emergencies. branch, which has steadily expanded tion in Japan to receive carbon By offering customers the safety business since its foundation in neutral certifi cation for all of its to prevent accidents through this September 1994. domestic offi ces from an external home security system, coupled with The establishment of this local organization. reassurance through insurance to subsidiary is part of a reorganization Through ongoing efforts to cover accidents, Tokio Marine & effort designed to enable an expan- reduce environmental impact, the Nichido is able to improve the con- sion of the service and marketing area Tokio Marine Group aims to sulting abilities of its agents while through branch offi ces development. become carbon negative on a improving communication with and This will allow Tokio Marine Holdings global basis over the medium- trust from its customers. to reassure its customer base with and long-term. better services through these offi ces. Note: Carbon neutral means

At fi rst, The Tokio Marine & that a company offsets its CO2 Nichido Fire Insurance Company emissions from business activities (China) Limited will open a string of by planting trees, using renewable new branch offi ces in southern, east- energy and purchasing emission ern and northern China and expand credits. Carbon negative means the areas in which it can directly that a company offsets more CO2 underwrite insurance. These efforts than is emitted from its business will improve the quality and speed of activities. our services in these regions, and are Tokio Marine & Nichido’s CO2 a part of our plans to create a net- emissions in fi scal 2007 were work of offi ces that cover the entire 65,401 tons, and the Company country. offset 65,555 tons of CO2. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 5 INTRODUCTION01

Topics: Group Companies

Consulting Services Combat Commemorating 100 Years of New Inﬂ uenza Outbreaks Business

After the SARS outbreak in 2003, To commemorate its 100th year of Tokio Marine & Nichido Risk operation, Nissin Fire & Marine Consulting Co., Ltd. began helping Insurance Co., Ltd. donated 250 sets companies plan for infl uenza out- of fi re extinguishers and commemo- breaks. The company provides con- rative gift boxes to the Kyoto Ancient sulting services focused on disease Culture Preservation Association, in (such as new infl uenza strains) and order to protect valuable cultural arti- business continuity planning and facts at shrines and temples in Japan support. In October 2008, the from fi re. Nisshin Fire published the company created a handbook for One Hundred Year History of Nisshin dealing with new infl uenza out- Fire & Marine Insurance Co., Ltd. on breaks. Complete with checklists July 1, 2008. On this occasion, the Launch of New Service for and an indexed manual, the hand- company collected and matched Protecting Customers from book covers essential information individual donations from employees Cancer to help companies prepare for and and retired employees. The donations With the introduction of Cancer deal with new infl uenza outbreaks. will be distributed to temples and Treatment Support Insurance in More than 30,000 copies of the shrines in Kyoto requiring additional September 2007, Tokio Marine & handbook were distributed for free fi re extinguishers and equipment, in Nichido Life Insurance Co., Ltd. has to companies through Tokio accordance with the wishes of the promoted awareness campaigns Marine & Nichido’s marketing divi- association. across the country to protect its sion. Moreover, updates are mailed The company also held the customers from cancer. Going beyond to customers in a web magazine Nisshin Fire 100-Year Commemorative the traditional framework of economic format. Tokio Marine & Nichido Risk Photo Contest, with the theme the support, through these campaigns Consulting Co., Ltd. will continue to “Reassurance and Comfort.” We we seek to offer more comprehensive support its corporate customers received 2,971 photographs from 1,415 assistance that ranges from mental with advanced risk consulting people. The winning prize was awarded and emotional health support to services in line with their needs. to a photo titled “Ohirune” (afternoon services and information on cancer nap), taken by Ms. Yuki Inaba. prevention and risk reduction. From October 2008, as a part of these campaigns, Tokio Marine & Nichido Life has introduced affi liated medical facilities for the early discov- ery of cancer. Customers are sup- plied with appointment and preferred price information for health checkups. Also available are PET scans, cancer consulting and advice services that dispatch professional advisors to help customers address their needs and concerns. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 6 Tokio Marine Holdings, Inc. 2009 Annual Report 02

02MANAGEMENT President Message 8

Directors & Auditors 10

BUSINESS REVIEW

Business Highlights 11

Business Overview 15

WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e MANAGEMENT02 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 8 Tokio Marine Holdings, Inc. 2009 Annual Report President Message

Dear Shareholders the foundation for future earnings growth. One of these initiatives has been the creation of leading business processes Since its creation 130 years ago, Tokio Marine has been throughout Japan that are highly competitive and robust. witness to some of the most signifi cant economic and social Overseas, our sights are set upon increasing our earnings crises in global history. The recent turmoil in the fi nancial while diversifying business globally. I am pleased that Kiln markets and the consequent unavoidable economic down- Group in the U.K. and Philadelphia Consolidated Holding in turn rank among the most severe events I have ever person- the U.S. have joined us, placing Tokio Marine in an excellent 02 ally experienced. Tokio Marine, however, has weathered position to implement its strategy to develop a signifi cant much worse crises and will once again emerge even stronger portfolio of international business. as a result of recent events. Looking ahead to fi scal 2009, we expect challenging Despite the upheaval, Tokio Marine posted a profi t while business conditions to continue in the insurance market maintaining a strong balance sheet. We did not, however, given the persistence of the current economic environment. escape completely unscathed. In the fi scal year ended March Nevertheless, we have worked hard to steadily strengthen 31, 2009 (fi scal 2008), revenues decreased due to the our competitiveness especially during this time of market decline in overall economic activity. On the asset side, we turmoil. Tokio Marine will endeavor to rapidly achieve the recorded a valuation loss of approximately ¥230 billion, objectives of its three-year management plan that began in mainly on marketable securities. fi scal 2009 and deliver improved results to shareholders. Maintaining a sound fi nancial foundation is our foremost Achieving this will require the concerted efforts of our responsibility to both our customers and shareholders. In 33,000 employees located in 36 countries around the world, this challenging business environment, our efforts remain as well as the continued cooperation of our insurance focused on the preservation of our healthy asset base – this agencies and brokers to whom we extend our gratitude. ensures that our ability to pay claims remains strong even Furthermore, I deeply appreciate the support and under the most extreme of circumstances. To date, we have unwavering assistance that Tokio Marine has received from had no defaults on our assets, including those that were its shareholders. marked down as valuation losses. Moreover, the valuations of these assets have begun to improve in line with the recent July 2009 market recovery. There are many lessons to be learned from the fi nancial crisis that should serve to promote improved management of all fi nancial markets in the future. Although market volatility has increased in step with the globalization of the world Shuzo Sumi economy, it is my belief that markets of the future will President become healthier and more transparent. I also believe that enterprise risk management will continue to be a signifi cant area of focus for Tokio Marine as we work towards striking a rewarding balance between risk and return, capital effi ciency and fi nancial soundness. At our major business centers around the world, we have taken steps to cope with the fi nancial crisis and have laid WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 9 MANAGEMENT02

Directors & Auditors

Chairman of the Board Directors

Kunio Ishihara Minoru Makihara (Chairman of the Board, (Senior Corporate Advisor, Tokio Marine & Nichido) Mitsubishi Corporation) Masamitsu Sakurai (Chairman of the Board, President Ricoh Company, Ltd.)

Shuzo Sumi Tomochika Iwashita (President, Tokio Marine & Nichido) (President, Tokio Marine & Nichido Life) A I Toshiro Yagi Kunio Ito Hiroshi Miyajima Executive Vice President Director (President, Nisshin Fire) B J Executive Vice Presidents Kunio Ito Yuko Kawamoto Tomochika Iwashita (Professor, Graduate School of Commerce Corporate Auditor Director Toshiro Yagi and Management, Hitotsubashi University) C K Daisaku Honda Kunio Ishihara Minoru Makihara Standing Corporate Auditors Chairman of the Board Director D L Yasuo Yaoita Senior Managing Directors Shuzo Sumi Hiroshi Amemiya President Senior Managing Director Tetsuo Kamioka Hiroshi Amemiya E M Shin-Ichiro Okada Shigemitsu Miki (Senior Managing Director, Corporate Auditors Tokio Marine & Nichido) Senior Managing Director Corporate Auditor F N Shin-Ichiro Okada Shigemitsu Miki (Senior Advisor, Yasuo Yaoita Tetsuo Kamioka (Senior Managing Director, Standing Corporate Auditor Standing Corporate Auditor Tokio Marine & Nichido) The Bank of Tokyo-Mitsubishi UFJ, Ltd.) G O Hiroshi Fukuda Masamitsu Sakurai Hiroshi Fukuda (Attorney-at-law) Director Corporate Auditor Yuko Kawamoto H P (Professor, Waseda Graduate School of Hiroshi Miyajima Daisaku Honda Finance, Accounting and Law) Director Executive Vice President WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 10 Tokio Marine Holdings, Inc. 2009 Annual Report BUSINESS02 REVIEW

Business Highlights

Overview of Fiscal 2008 Results requirements became more stringent, both for compliance During fi scal 2008, ended March 31, 2009, net premiums writ- purposes and to ensure each customer’s wishes were ten in the non-life insurance business declined 4.9% from the honored precisely. previous fi scal year to 2,134.2 billion yen. This performance While the adoption of this type of business structure among came despite full-term contribution from the Kiln Group, which Japanese insurers led to more stable premium revenues, business was acquired in March 2008. The decline in net premiums writ- processes became increasingly bogged down by a business model ten was primarily attributable to a reduction of more than 25% catering to intricate customer needs while fulfi lling obligations to in premium rates for compulsory automobile liability insurance, explain policies in suffi cient detail. As a result, internal processes 02 as well as lower income at two Japanese non-life insurance between insurance companies and agents came to occupy more subsidiaries owing to the global economic recession. than half of total work volume. As insurance companies began to In the life insurance business, premiums slid 5.4% to engage in rate competition, conditions became more challeng- 746.0 billion yen. This decrease was mainly due to a reduction ing, making it imperative for companies to drastically reduce in income from variable annuities at Tokio Marine & Nichido their cost structures by increasing business process effi ciency. Financial Life that resulted from deterioration in the investment Early on, Tokio Marine & Nichido became aware of this environments. impending crisis and in fi scal 2004 initiated the Business Although ordinary losses totaled 15.1 billion yen, a marked Renovation Project to undertake a sweeping review of all busi- deterioration of 194.1 billion yen from the previous fi scal year, ness processes and IT systems. Management realized that Tokio Marine Holdings secured net income of 23.1 billion yen, everything was at stake unless the Tokio Marine Group was a decline of 85.6 billion yen, as the price fl uctuation reserve able to rapidly develop and conveniently offer products and was used to offset substantial valuation losses. services to customers with a high level of transparency. After Below is a discussion of the business strategies utilized by fi ve years of changes and upfront investment, the fi rst line of each segment to cope with these strenuous times. services was launched in May 2008 for systems infrastructure and a new agency system “TNet”. Competitive Strategy for Non-Life Insurance Business This system was designed to reduce agency workload by in Japan 10-30%, increase time spent with customers, enhance plan- In order to achieve sustainable growth in earnings, the Tokio ning and lead to even more compelling proposals. Already, the Marine Group must execute a clear competitive strategy. The results of this system and other initiatives undertaken are overall size of Japan’s non-life insurance market presents limit- steadily appearing. ed prospects for growth. In light of this, a key point is to bol- The decision to drastically change business processes and ster the activities of agents, the main sales conduit for products brought about requirements for thorough reexamina- insurance in Japan. On this front, Tokio Marine & Nichido has tion and forward-looking investment. Now, even if competitors been upgrading both IT system infrastructure and business pro- bring similar products to market, they will not easily be able to cesses to increase its competitiveness. imitate Tokio Marine & Nichido’s business processes enabled by Japan’s non-life insurance sector was under strict regulatory the new IT infrastructure. This is the kind of competitive oversight until 1998, when it was liberalized. Prior to this, most capability Tokio Marine & Nichido believes tomorrow’s market- insurance companies designed and marketed products in near place demands. lockstep. When Tokio Marine & Nichido introduced a new Some insurance companies have sought to increase their insurance product, other companies quickly followed suit. top line through mergers and acquisitions (M&A). It is only Competition heated up after the liberalization of the insur- afterwards that they begin to integrate competitive capabilities. ance sector began in 1998. Insurance companies sought to Tokio Marine & Nichido, on the other hand, has made all-out diversify their products by offering a wide variety of special efforts to comprehensively increase competitiveness. This clauses and supplementary services. Meanwhile, procedural investment has fi nally begun to pay off and Tokio Marine & Nichido is now fi rmly positioned to expand its market share. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 11 BUSINESS02 REVIEW

The Tokio Marine Group is already several steps ahead of its of time, Tokio Marine & Nichido Life was able to rise to its posi- rivals in carving out a competitive strategy for the future. The tion as a second-tier insurance company because it directly Tokio Marine Group aims to further increase its competitive- addressed customer concerns with a consulting-style approach ness, derived from robust business processes, through initia- while cross-selling life insurance at its network of non-life insur- tives to create a slimmer structure. ance agents. From an early stage, Tokio Marine & Nichido Life concentrated on endowment insurance products that are Improving Margins in the Non-Life Insurance Business destined to form the core of the life insurance business as the in Japan Japanese population ages. Success has also stemmed from the An urgent task at hand is lowering the combined ratio strong sense of security the Tokio Marine brand conveys (loss ratio + expense ratio) in the non-life insurance business throughout the Japanese insurance market. in Japan. In October 2009, Tokio Marine & Nichido Life plans to Over the past few years, the combined ratio has increased release new medical insurance products targeting the expand- for several reasons. Premium income, the denominator in the ing third-sector market for medical, cancer and nursing care equation, has declined even as loss and expense expanded. The insurance, a growing fi eld as Japanese society ages. latter included upfront investment in the Business Renovation The other life insurance subsidiary, Tokio Marine & Nichido Project, the hiring of compliance personnel to deal with the Financial Life, focuses on the variable annuities market. As improper nonpayment of insurance claims, an increase in agen- almost all variable annuities sold in Japan have GMDB cy commissions for incentives to switch to cashless payments, (Guaranteed Minimum Death Benefi t) or GMAB (Guaranteed other higher business expenses and a rise in insurance claims Minimum Accumulation Benefi t), the fi nancial turmoil led due in part to the occurrence of major accidents. insurance companies to take signifi cant risks which required While raising premium rates, Tokio Marine & Nichido plans soaring costs and additional reserves for hedging purposes. to keep expenditures for the Business Renovation Project within As a result, several competitors, mostly foreign-affi liated com- the amount of cost reductions achieved in fi scal 2011, the fi nal panies, have withdrawn from the variable annuities market. year of its mid-term corporate strategy, and limit increases in In fi scal 2008, Tokio Marine & Nichido Financial Life turned personnel costs to the hiring of compliance professionals. a profi t for the fi rst time since its founding on a fi nancial Assuming several major incidents do not occur, the accounting basis, mainly because of the reversal of policy Company aims to get the combined ratio back down to a sta- reserves brought by ceding the minimum guarantee risk. In real ble range of 90-95% by fi scal 2011, the end of the mid-term terms, however, earning conditions worsened owing to a corporate strategy. Moreover, Tokio Marine & Nichido has set decline in special account assets due to deteriorating market its sights on restoring profi tability in the Japanese non-life conditions and lower revenues. insurance business through top-line growth. Given the declining population, an aging society and growing/ongoing distrust in the public pension system, Tokio Sustained Growth in the Life Insurance Business in Japan Marine & Nichido Financial Life expects demand to expand for Tokio Marine & Nichido Life, which began operations in 1996, fi nancial products like investment trusts and variable annuities in has steadily expanded the amount of policies in force, even as the long-term, although this demand will naturally fl uctuate other major Japanese life insurance companies endured seem- with changes in market conditions. While monitoring current ingly inexorable declines in their policies in force as they suf- conditions, Tokio Marine & Nichido Financial Life will continue to fered increased policy cancellations and struggled to attract market products under the assumption that it will be able to new customers. adequately control risks unique to its business. The Tokio Coming to the market later brings certain advantages and Marine Group will enhance prospects for growth by reinforcing Tokio Marine & Nichido Life leveraged these to introduce inno- its relationships with partner fi nancial institutions. vative products the market had never seen. Over a short period WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 12 Tokio Marine Holdings, Inc. 2009 Annual Report International Insurance Business For more than four decades, the Tokio Marine Group and Since around 2000, Tokio Marine Holdings has actively been the Kiln Group have fostered mutual respect through a business developing its international insurance business in the reinsur- relationship focused on reinsurance. Finally in March 2008, the ance markets, where it can maximize its underwriting expertise Kiln Group joined the Tokio Marine Group through a friendly and capital strength, and in the emerging insurance markets acquisition. such as BRICs and other Asian countries, where it can expect to The acquisition of the Kiln Group captured the attention of establish a long-lasting foundation for future growth. the US insurance market and the interest of Philadelphia In such emerging insurance markets, it is essential to fl exibly Consolidated Holding Corp. (PHLY), a leading medium-sized US 02 adjust to rapidly changing regulatory systems and competitive insurance group which has consistently achieved exemplary environments and to implement effective business strategies growth and earnings since its foundation in 1962. that envision future market directions. After confi rming that PHLY and the Tokio Marine Group Additionally and more importantly, Tokio Marine Holdings share important business philosophies and strategies, they has focused on, and achieved success in, fi nding local partners jointly announced that PHLY had joined the Tokio Marine Group having familiarity with local markets, localized marketing through a friendly acquisition completed in December 2008. capabilities and commercial networks supported by high Tokio Marine Holdings is convinced that it will be able to business ethics. advance its growth strategy in European and US insurance In 2008, Tokio Marine Holdings faced unprecedented global market in combination with the Kiln Group and PHLY, and such economic turmoil when it was striving to set its business in growth strategy in international insurance markets overall with emerging insurance markets on a strong growth track. However, other member companies worldwide. some regions still produced record profi ts even in such challenging In fi scal 2008, earnings results in the international insurance business environments, which gave Tokio Marine Holdings the business of the Tokio Marine Group were adversely affected by confi dence to achieve further growth in emerging insurance the turbulence in fi nancial markets and the rapid appreciation markets while enhancing its risk management structure. of the yen, which has reduced yen-denominated profi ts On one hand, in order to be a global top-tier insurance generated overseas. Nevertheless, the Tokio Marine Holdings company, it is also essential to build a strong position in the expects its international insurance business to account for 30 European and US insurance markets which represent 80 percent percent of the total adjusted earnings of the Tokio Marine of the world’s insurance market. Tokio Marine Holdings has been Group by fi scal 2011. (In fi scal 2009, management expects its engaged in locating excellent partners in Europe and the US that international insurance business to account for roughly 50 per- will help the Tokio Marine Group to achieve its strategic goals. cent of the total adjusted earnings due to the projected slow There are three indispensable qualities required to join the recovery of its domestic insurance business.) Tokio Marine Group, namely a sound business management The Kiln Group was included in the scope of consolidation capability, a strong business model and a high growth potential. from fi scal 2008, contributing 7.4 billion yen in net income of In other words, each partner must have the ability to increase the Tokio Marine Group. Kiln is striving to enhance its perfor- its own corporate value and contribute to the overall growth mance by taking advantage of the pricing improvement in the of the Tokio Marine Group. reinsurance market. In Europe, Tokio Marine Holdings invited the Kiln Group, a Earnings of PHLY will also be included in the scope of well-respected player in the Lloyd’s insurance market, to consolidation beginning with fi scal 2009. In fi scal 2008, PHLY become a Tokio Marine Group company. The Kiln Group is one achieved growth in the challenging business environment in of the top-ranked insurance groups in the Lloyd’s insurance the US insurance market and is expected to continue showing market in term of its underwriting capacities. The Kiln Group a favorable performance in fi scal 2009. has been earning respect and recognition for its competitive The Tokio Marine Group will continue to consider M&A commercial line products and prominent underwriting discipline. opportunities if it can fi nd partners that possess the three indis- WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 13 BUSINESS02 REVIEW

pensable qualities described above and that can help to expand For the past twenty years, Tokio Marine & Nichido has been the overall corporate value of the Tokio Marine Group. an active supporter of youth activities by sponsoring swimming competitions. It also contributes to society through other activi- Forecasts for Fiscal 2009 and Shareholder Return Policy ties, such as breast cancer awareness campaigns. Amid uncertainty prevailing in the global economy and fi nancial markets, management has formulated the following fore- In Conclusion casts for fi scal 2009. From early on, Tokio Marine Holdings understood that it would It is expected that ordinary income will reach 3,320 billion not be easy to increase return on equity (ROE) solely through yen, a decrease of 183.1 billion yen. This is due primarily to a the Japanese non-life insurance business which requires consid- decline in income from variable annuity premiums at Tokio erable reserves in case of such natural disasters as typhoons Marine & Nichido Financial Life, and comes despite an increase and earthquakes. Accordingly, the business portfolio is being in income from net premiums written with the addition of strengthened with the addition of Japanese life insurance and Philadelphia Consolidated to the scope of consolidation in international insurance operations. With the understanding fi scal 2009. and approval of its shareholders, the Tokio Marine Group aims Ordinary profi t and net income are expected to increase to to increase capital effi ciency and pursue a management strate- 125 billion yen and 80 billion yen, respectively, on improvement gy targeting global growth. in investment income based on the assumption that market At an early stage, a robust business model was sought conditions will remain unchanged from the end of March 2009. allowing management to achieve the highest effi ciency in In order to maintain a solid capital basis, Tokio Marine resource allocation. In fi scal 2002, a holding company Holdings has ceased share repurchases. Its management will structure was adopted and Tokio Marine Holdings again consider resuming share repurchases when a stable rebound became a pioneer. Following suit, other companies in the insur- takes root in fi nancial markets, but in the meantime the distri- ance industry soon adopted holding company structures of bution of dividends will take priority. their own. The global fi nancial crisis in fi scal 2008 and 2009 was an Corporate Social Responsibility extraordinary event that led to a profound slump in the global Tokio Marine Holdings has proactively engaged in corporate economy and disrupted the balance of the business portfolio. social responsibility initiatives worthy of a global corporation. However, management believes the current mid-term corporate Global warming will have a major impact on future genera- strategy will lead to a restoration of profi tability in Japanese tions. Tokio Marine & Nichido announced its “Comprehensive non-life and life insurance businesses by fi scal 2011. The Tokio Program Concerning Global Warming” in November 2007, Marine Group aims to recreate a solid, high-margin business making a commitment to reduce the environmental impact of portfolio that is well suited to the new global insurance market. its business activities while developing and providing products Since its establishment 130 years ago, The Tokio Marine and services that respond to climate change. Group has taken a pioneering role in offering new products In addition, since 1999, the Tokio Marine Group has been and services that advance the insurance business to new fron- involved in the mangrove afforestation project, planting 5,901 tiers. This ability to innovate on its own accord has become an hectares of mangrove trees in Southeast Asia. The mangrove inseparable part of the DNA of all employees in the Tokio trees absorb large amounts of carbon dioxide, helping to pre- Marine Group. Together, we aim to increase our competitive- vent global warming. They also support the economies in ness under the guidance of the management strategy outlined which the trees are planted, and form a natural barrier that above, and embark on a new growth trajectory. protects people from tidal waves and other natural disasters. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 14 Tokio Marine Holdings, Inc. 2009 Annual Report Business Overview

(From April 1, 2008 to March 31, 2009)

During the fi scal year ended March 31, 2009, the Japanese Tokio Marine Holdings economy showed more serious signs of deterioration as turbu- On a non-consolidated basis, Tokio Marine Holdings, the hold- lence in the fi nancial markets triggered a global recession and a ing company for the Group, received business management decline in exports and sluggish consumer spending caused cor- fees amounting to 6.5 billion yen and dividends totaling 130.0 porate earnings to decrease signifi cantly. billion yen from its subsidiaries and affi liates, resulting in operat- In the insurance industry, property and casualty insurance ing income of 136.5 billion yen, ordinary profi t of 130.4 billion premiums decreased primarily because of lower automobile yen, and net income of 117.1 billion yen. sales volume, rate cut in compulsory automobile liability insur- The Company seeks to enhance the management of subsid- 02 ance and decreased goods fl ow. In the life insurance sector, the iaries by optimizing the allocation of management resources amount of newly signed insurance policies decreased due in and strengthening risk management and compliance through- part to the declining birthrate and aging population. out the Group. In this environment, the Tokio Marine Group (the “Group”) In addition, the Company changed its corporate name to has striven to be a “global corporate group offering quality that Tokio Marine Holdings, Inc. in July 2008 and has been pushing customers select.” While refl ecting upon previous errors found forward with the Group growth strategies on a global basis in connection with insurance underwritings and claim pay- under the brand name of “Tokio Marine,” which we believe to ments, the Group has thoroughly carried out initiatives that have wide recognition at home and abroad, aimed at increasing ensure proper operations and improve quality of business in overall corporate value. accordance with its three-year “Stage Expansion 2008” business plan which ended in the fi scal year ended March 31, 2009. Property and Casualty Insurance Business Despite this effort, Tokio Marine Holdings, Inc. (“Tokio Marine In the property and casualty insurance business, premiums writ- Holdings” or the “Company” or “We”) reported a signifi cant ten decreased in a diffi cult business environment. Profi tability of underachievement of its consolidated business results. As investments also fell signifi cantly due to turbulent market condi- described below, this was mainly due to impairment losses on tions caused by aggravation of the fi nancial crisis and worsen- securities resulting from turbulence in the fi nancial markets and ing of the real economy. declines in stock markets. The following represents the operating results of Tokio On a consolidated basis, ordinary income amounted to Marine & Nichido Fire Insurance Co., Ltd. (“Tokio Marine & 3,503.1 billion yen, a decrease of 206.9 billion yen from the Nichido”) for the fi scal year ended March 31, 2009. Net premi- previous fi scal year. The main components of ordinary income ums written were 1,813.4 billion yen, a year-on-year decrease were underwriting income of 3,130.0 billion yen and invest- of 5.2 percent. Ordinary profi t was 69.6 billion yen, a decrease ment income of 306.6 billion yen. of 114.3 billion yen, and net income was 71.1 billion yen, a Ordinary profi t decreased by 194.1 billion yen to -15.1 bil- decrease of 51.8 billion yen from the previous fi scal year. lion yen. Net income was 23.1 billion yen for the fi scal year With respect to the operating results of Nisshin Fire & ended March 31, 2009, a decrease of 85.6 billion yen from the Marine Insurance Co., Ltd. (“Nisshin Fire”) for the fi scal year previous fi scal year. ended March 31, 2009, net premiums written were 135.9 billion yen, representing a decrease of 4.1 percent from the previous fi scal year. Ordinary profi t was -16.1 billion yen, a decrease of 18.8 billion yen, and net income was -10.3 billion yen, a decrease of 12.2 billion yen. Major initiatives introduced in the property and casualty insurance business in the fi scal year ended March 31, 2009 were as follows. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 15 BUSINESS02 REVIEW

Tokio Marine & Nichido aims to maintain growth by offering In January 2009, the Company entered into a business and quality that customers select by ensuring its competitiveness capital alliance agreement with NTT FINANCE CORPORATION, through the improvement of the quality of products and servic- a subsidiary of NIPPON TELEGRAPH AND TELEPHONE es, the enhancement of customer contacts in the course of CORPORATION, and established “E. design Insurance insurance solicitation to claim payments and the realization of Preparatory Co., Ltd.” Upon approval of business commence- customer-friendly business processes as a whole. ment from the Financial Services Agency of Japan, this company Tokio Marine & Nichido focused on a new business renova- changed its name to “E. design Insurance Co., Ltd.” and tion project named “Drastic Reform of Business Processes” and launched business operations in June 2009. an establishment of “Multi-access.” The purpose of the new business renovation project is to provide high-quality services Life Insurance Business and enhance business effi ciency and customer-friendliness by With regard to the life insurance business, sales of whole-life streamlining insurance products, restructuring the system infra- insurance and cancer insurance remained robust. However, sales structure and renovating business processes. As the fi rst step of of variable annuity insurance declined mainly due to diminished this project, Tokio Marine & Nichido substantially simplifi ed auto risk tolerance for investments caused by turbulence in the fi nan- insurance, the core product of Tokio Marine & Nichido, and cial markets. transferred the administration of auto insurance policies to a As of March 31, 2009, Tokio Marine & Nichido Life new system infrastructure. Additionally, Tokio Marine & Nichido Insurance Co., Ltd. (“Tokio Marine & Nichido Life”) recorded reconfi gured its agency system in May 2008. In order to 19,074.5 billion yen in the amount of life insurance-in-force, an enhance its customer contacts in full cooperation with agents, increase of 1,076.7 billion yen from March 31, 2008, while the Tokio Marine & Nichido is engaged in an establishment of a fun- amount of newly signed life insurance was 2,506.1 billion yen, damental infrastructure called “Multi-access” that utilizes call a year-on-year increase of 15.8 percent. Ordinary profi t amount- centers and websites for insurance solicitation. ed to 5.5 billion yen, a decrease of 0.4 billion yen Furthermore, to improve the service quality of agents from the previous fi scal year. Tokio Marine & Nichido Life con- offered to customers, Tokio Marine & Nichido promoted the use tinued to set aside additional amounts into underwriting of TNet, a new agency system, and reinforced support to its reserve, seeking to meet the standard underwriting reserve agents by utilizing “Agent Compass,” which helps agents required under the Insurance Business Law of Japan. As a result, assess their managerial issues to be solved. Tokio Marine & net income amounted to 0 billion yen. Nichido also supported its agents to improve the quality of their As of March 31, 2009, Tokio Marine & Nichido Financial Life risk consulting services by an alliance with Secom Co., Ltd. Insurance Co., Ltd. (“Tokio Marine & Nichido Financial Life”) where Tokio Marine & Nichido and Secom Co. Ltd. developed recorded 2,642.2 billion yen in the amount of life insurance-in- an original home security system exclusively for customers of force, an increase of 306.3 billion yen from March 31, 2008, Tokio Marine & Nichido. The home security system is offered as although the amount of newly signed life insurance decreased part of the service menu of Tokio Marine & Nichido agents’ risk 12.8 percent from a year earlier to 443.0 billion yen. Ordinary consulting service that provides its customers with a preventa- profi t and net income amounted to 10.0 billion yen, an increase tive measure to ensure safety and security in combination with of 16.5 billion yen from the previous fi scal year, respectively. insurance, which ensure an assurance for post-accidents. Major initiatives introduced in the life insurance business in Nisshin Fire also continues to focus on improving its insur- the fi scal year ended March 31, 2009 were as follows. ance underwriting and claim payments to enhance business quality in the same manner as Tokio Marine & Nichido. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 16 Tokio Marine Holdings, Inc. 2009 Annual Report Tokio Marine & Nichido Life has been advancing the In March 2009, for 26.6 billion yen, the Company sold to “Second Inauguration Project,” centering on (1) reinforcement Banco Santander S.A. all its shares of a life insurance and pen- of sales channels in response to the change in business environ- sion affi liate in Brazil that were held through its Brazilian prop- ment, (2) renovation of business processes and (3) increased erty and casualty insurance subsidiary. promotion campaigns to gain wider recognition. It has also sought to provide improved customer support through a pro- Asset Management, Financial Services Business gram called “Cancer Prevention Campaign” offering medical and Other Businesses checkups to customers to detect cancer at early stages. During the fi scal year ended March 31, 2009, Tokio Marine & 02 Tokio Marine & Nichido Financial Life strengthened alliances Nichido closely evaluated individual investment cases in its man- with fi nancial institutions on over-the-counter sales of variable aged assets and carefully carried out risk management to main- annuity insurance and has sought to ensure sound business tain a sound fi nancial base. In addition, in order to meet management by utilizing reinsurance to enhance its risk payment obligations such as insurance claims and maturity management framework. refunds, Tokio Marine & Nichido continued its efforts to strengthen its asset liability management and ensure the fi nan- International Insurance Business cial security and liquidity of its assets. Major initiatives taken in the International insurance business in However, in the fi scal year ended March 31, 2009, the Tokio the fi scal year ended March 31, 2009 were as follows: Marine Group recorded large losses due to turbulence in the The Company acquired Philadelphia Consolidated Holding fi nancial markets and the decline in stock markets. Corp. (“PHLY”), a U.S. property and casualty insurance group, Specifi cally, the Company’s subsidiaries recorded impairment and made it a subsidiary of Tokio Marine & Nichido in December losses on securities of 98.8 billion yen, the major components of 2008. For the fi scal year ended December 31, 2008, PHLY which were impairment losses on domestic stocks of 37.0 bil- achieved steady revenue growth and recorded 145.1 billion yen lion yen and impairment losses on foreign securities, including in net earned premiums, an increase of 15.3 percent from the fund-related investments, of 53.3 billion yen. Impairment losses previous fi scal year. Through this acquisition, the Tokio Marine on securities recorded in the Company’s consolidated fi nancial Group has expanded the scale and earnings of its international statements were 162.2 billion yen, which includes an adjust- insurance business and established a solid foundation to oper- ment amount of 63.3 billion yen, recorded only for consolida- ate an extensive insurance business in the U.S., the largest prop- tion accounting purposes in accordance with the purchase erty and casualty insurance market in the world. method of accounting adopted for past business combinations. In December 2008, the Company established through Tokio Besides these impairment losses on securities, impairment Marine & Nichido a syndicate that assumes a principal role in losses relating to credit default swaps (CDS) and asset-backed insurance underwriting in the Lloyd’s insurance market in the U.K. securities (ABS) amounted to 14.2 billion yen and 38.4 billion We will strive to further develop our insurance business in Lloyd’s yen, respectively. through this syndicate in close cooperation with the Kiln Group, a The Company expanded its fi nancial services business, cen- U.K. insurance group the Company acquired in March 2008. tered on the asset management business. As for other business- Upon receiving an approval from the Chinese insurance es, the Company mainly engaged in risk consulting, elderly care authorities in November 2008, Tokio Marine & Nichido estab- and health related businesses. While all these businesses faced a lished a Chinese insurance subsidiary by reorganizing its diffi cult business environment amid the global fi nancial crisis Shanghai Branch. The subsidiary plans to set up branches and and recession in the fi scal year ended March 31, 2009, all group expand its insurance business in China. companies will seek to further strengthen their risk management measures. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 17 BUSINESS02 REVIEW

Initiatives for Prevention of Global Warming Under its management philosophy to place “customer trust In November 2008, Tokio Marine & Nichido became the fi rst at the base of all its activities,” the entire Tokio Marine Group fi nancial institution in Japan to be verifi ed by a certifi ed third- will endeavor to achieve further growth as a corporate group, party institution as “carbon neutral”. Tokio Marine & Nichido’s seeking growth characterized by high profi tability, sustainability carbon emission levels from its entire domestic operations were and soundness. completely offset by its absorption/reduction effect. This refl ects Note 1: Throughout this Business Overview, all amounts (including numbers of shares) are truncated and all ratios are rounded. Tokio Marine & Nichido’s efforts to reduce carbon dioxide emis- Note 2: The yen-denominated amounts of net earned premiums of PHLY are calculated sion from its operations, its purchase of green electricity, a man- at the exchange rate as of the end of December 2008. The business results of PHLY are not included in the consolidated statement of income of the Company grove afforestation project and its purchase/amortization of for the fi scal year ended March 31, 2009, since PHLY became a consolidated emission rights. subsidiary of Tokio Marine Holdings in December 2008. Note 3: The yen-denominated amount of sales price of shares of a life insurance and pension affi liate in Brazil is calculated at the exchange rate as of the end of December 2008. Issues Facing the Tokio Marine Group Note 4: The Company’s consolidated fi nancial statements have recorded the securities In the fi scal year ending March 31, 2010, the Japanese econo- held by the acquired companies, including The Nichido Fire and Marine Insurance Company, Limited, a predecessor company of Tokio Marine & Nichido, my is expected to face continued weak domestic and foreign and Nisshin Fire at the fair value as of the respective dates of acquisition in demand amid the global recession. accordance with the purchase method of accounting. Consequently, the book value of the relevant securities on the Company’s Given current economic conditions coupled with a declining consolidated fi nancial statements is greater than those on the two subsidiaries’ birthrate and aging population, the domestic insurance market individual fi nancial statements, and so are the impairment losses on the relevant securities. is not expected to grow and it remains an essential task for insurance companies to ensure profi ts. Beginning with the fi scal year ending March 31, 2010, the Company has been implementing a new three-year corporate strategy “Innovation and Execution 2011,” with a vision of becoming a “global corporate group maintaining growth by offering quality that customers select.” In accordance with the strategy, we aim to realize sustainable earnings growth that departs from the improvement of quality of products, services and business processes. We will also focus on the establishment of an optimal business portfolio by allocating management resources in business areas with high profi tability and growth potentials. Furthermore, in order to strengthen our business management and administration system on a global basis, we will enhance our risk management structure, including the establishment of infrastructure necessary for our risk-based management (through an ERM system), and cope with the global standardization of accounting principles and risk management standards. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 18 Tokio Marine Holdings, Inc. 2009 Annual Report 03

03CORPORATE STRATEGY AND PROFILE

Corporate Strategy 20

Special Feature: International Business 24

Proﬁ le of the Tokio Marine Group 28 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 19 CORPORATE STRATEGY03 AND PROFILE

Corporate Strategy

Tokio Marine Holdings strives to increase the corporate value of conditions, Tokio Marine Holdings aims to build a secure posi- group companies through constant growth and development, tion from which it can enhance its competitiveness on a global simultaneously creating new value for society, customers and basis while providing products, services and business processes other stakeholders through strategic CSR management of group through group companies that are selected by customers for companies worldwide. their quality. Guiding the way is Innovation and Execution 2011, a three- year mid-term group corporate strategy that began in April 2009. In order to continue growing amid challenging business

Mid-Term Corporate Strategy Innovation and Execution 2011

In accordance with the mid-term corporate strategy “Innovation and Execution 2011,” the Tokio Marine Group (the “Group”) will aim to be a “global corporate group maintaining 1Outline growth by offering quality that customers select” and seek to maximize corporate value through two core strategies detailed below.

Mid-Term Vision (picture targeted for 2011)

A global corporate group maintaining growth by offering quality that customers select Targeted adjusted earnings: 220 billion yen, adjusted ROE: 6% or higher

Framework for mid-term corporate strategy

(1) Maintaining sustainable earnings growth through improvement of quality (2) Enhancing our global management structure Supporting the Risk-based Competitive strategies Competitive strategies Capital strategies overall management (ERM*) of the domestic of the international Asset management strategy insurance business insurance business Other group-wide strategies

Long-term vision (picture targeted by 2015) Top-tier global insurance group

*ERM: Enterprise Risk Management Quality encompasses all of the business activities of the Tokio Marine Group, extending to quality of products and services (conve- nience and ease of understanding), quality of business processes (accuracy and speed), and fi nancial quality (fi nancial soundness). Improving quality is essential to achieving sustainable earnings growth. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 20 Tokio Marine Holdings, Inc. 2009 Annual Report (1) Maintaining Sustainable Earnings Growth Through (2) Enhancing Our Global Management Structure Improvement of Quality We intend to build and enhance our global management struc- In order for the Tokio Marine Group to grow in a sustainable ture to provide all stakeholders with high value regardless of manner, we expect it will be necessary for all of the Group com- their country or their regional location and to more fl exibly uti- panies to innovate through the growth cycle illustrated below. lize management resources available within the Group on a We will endeavor to enhance stakeholder value in a sustainable global basis. manner in this way. In light of the fact that accounting standards and supervi-

Increase in customer value sory regulations covering the insurance business have been undergoing a process of revision, one of the activities we intend Improvement of quality to place a particular focus on is building the infrastructure need-

Increase in the number New investment in ed for enhancing our risk-based management (through an ERM of loyal customers products and services system). Improvement in profitability and capital efficiency Increase in social value Increase in employee value Increase in shareholder value The expansion and growth cycle through improvements of quality 03

Tokio Marine Holdings aims to achieve adjusted earnings of 220 billion yen and adjusted ROE Quantitative Vision of 6% or higher by the end of its mid-term corporate strategy in ﬁ scal 2011. 2(Numerical Targets) Plans call for the core domestic non-life insurance business to account for more than half of adjusted earnings, and the expansion of both the international insurance business and domestic life insurance business. Tokio Marine Holdings will concentrate on building a business portfolio that strikes a balance among all operations. (Billions of yen) Business domains Fiscal 2007 results Fiscal 2008 results Fiscal 2009 projections Fiscal 2011 targets (quantitative vision) Domestic non-life insurance business 99.4 5.1 38.0 115.0 Tokio Marine & Nichido 100.2 16.9 49.0 115.0 Nisshin Fire (0.8) (10.7) 1.0 5.0 Other — (1.1) (12.0) (5.0) Domestic life insurance business 15.1 (57.2) 21.0 40.0 Tokio Marine & Nichido Life 29.1 (6.0) 24.0 35.0 Tokio Marine & Nichido Financial Life and others (13.9) (51.2) (3.0) 5.0 International insurance business 29.7 20.8 53.0 60.0 Non-life insurance business 24.6 23.2 53.0 57.0 Adjusted earnings Direct insurance 8.1 3.3 33.0 40.0 Reinsurance 16.5 19.9 20.0 17.0 Life insurance business 6.5 (0.7) 2.0 6.0 Financial & General businesses (1.0) (21.1) (6.0) 5.0 Group total 143.2 (52.5) 106.0 220.0 Group total ROE 3.5% (1.7%) 4.1% 6% or higher Note: In order to capture and enhance the corporate value of the Tokio Marine Group, targeted earnings and ROE are based on “adjusted earnings” which are calculated as follows. International insurance business totals exclude corporate expenses.

Defi nition of adjusted earnings* (2) Life insurance business (1) Property and casualty insurance business Adjusted earnings = Increase in embedded value - Capital transactions (withdrawals) Adjusted earnings = Net income + Provision for catastrophe reserves (For some life insurance companies, adjusted earnings is calculated on the same + Provision for reserves for price fl uctuations basis as other businesses below, with corporate expenses excluded from earnings) - Gains (losses) from sales or valuations of ALM bonds and interest rate swaps (3) Other businesses - Gains (losses) from sales or valuations of stocks and proper- Net income determined following to fi nancial accounting principles ties - Other special factors *All fi gures are after tax WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 21 CORPORATE STRATEGY03 AND PROFILE

Growth Strategies for Our Main Businesses

With regard to our domestic insurance business, the core business of the Group, we intend to Domestic Insurance further enhance our Group strengths. We will seek to achieve growth by gaining support from 1Business customers and strengthening our competitiveness, including improving customer contacts and maximizing strengths and synergies.

(1) Strong Customer Contact • to introduce a new agent management system “Agent

Tokio Marine & Nichido Fire Insurance Co., Ltd. (“Tokio Marine Compass” to support agents. (See note 1) & Nichido”), the core of our domestic insurance business, has • to develop and operate “Multi-access” platforms to diversify been implementing the “Business Renovation Project” involving the agents’ solicitation process. (See note 2) such activities as streamlining products and back-ofﬁ ce work *Note 1 Agent Compass is a management support model that visualizes agent management issues by quantitative and objective indicators, diagnoses the issues in line with the processes and promoting the introduction of “TNet,” a new business processes, and formulates efﬁ cient and effective strategies. agency system. *Note 2 “Multi-access” is expected to be a set of platforms offered to Tokio Marine & Nichido’s agents for use in diversifying the solicitation process. Multi-access is expected Going forward, Tokio Marine & Nichido will seek to provide to offer agents a set of platforms, including a call-center, a web-based application plat- its customers with products and services through more customer- form and a customer-contact database structured using current technology. These platforms are expected to be tailored to Tokio Marine & Nichido’s agents so as to strengthen friendly business processes and to strengthen customer contacts. customer contacts and improve the quality ultimately offered to Tokio Marine & Nichido’s In order to achieve these goals, Tokio Marine & Nichido intends: customers.

Tokio Marine & Nichido is innovating and increasing efficiency in Business Renovation project its business processes by introducing new agent systems “TNet” and simplifying products and administrative work .

Agent management support making Agent Compass strengthens marketing and sales capabilities by the most of the Agent Compass analyzing and proposing solutions to agent management issues.

Multi Access increases customer satisfaction by using the latest Multi Access simplifies and in technology, such as contact history databases at call centers improves the speed of services and via the internet Enhance contact points

Provide safety and security consulting services through agents Growth through expansion of customer support

Enhance life and non-life insurance integrated management

(2) Maximizing the Group’s Collective Strength As customers’ needs for consulting services relating to secu- (including integrated life and non-life insurance offerings) rity and safety and to risk management also will increase, we Our customer needs are increasingly diversifying. More custom- expect our Group companies, including Tokio Marine & Nichido ers are purchasing insurance based on independent judgment Risk Consulting Co., Ltd. (operating risk consulting business), and full analysis rather than simply accepting insurance recom- Tokio Marine & Nichido Medical Service Co., Ltd. (operating mendations by sales agents. In order to meet our customers’ healthcare business) and Tokio Marine & Nichido Anshin expectations, we intend to offer an expanded insurance products Consulting Co., Ltd. (operating life planning support business), and services that will increasingly combine both life and non-life to be well positioned to meet the customer needs by utilizing insurance offerings. We believe the breadth of our insurance their own expertise and offering a variety of services with line is one of the strengths of our Group. innovative insurance features. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 22 Tokio Marine Holdings, Inc. 2009 Annual Report Due to the global fi nancial crisis, we expect that insurance customers will be increasingly International Insurance inclined to assess the fi nancial soundness of insurance companies in their decision-making. 2Business We believe that the fi nancial soundness our Group maintains will serve as a competitive edge in expanding and gaining support from customers across the world.

(1) Growth Strategy • We intend to continue developing our business with Japanese Kiln Group and Philadelphia Consolidated Holding companies abroad—which is an important pillar of our interna- We completed two large strategic acquisitions in 2008—acqui- tional insurance business. We will seek to upgrade our capabilities sition of Kiln Group and Philadelphia Consolidated Holding in responding to the needs of Japanese companies abroad by Corp. Currently, our focus is on achieving smooth integration of close collaboration with domestic insurance business counterparts. these companies into our Group and on achieving their on- M&A Strategy going business plan. As we move forward, we will develop a To enhance our medium-to-long-term growth potential, we synergistic strategy combining the strengths of those companies intend to continue evaluating M&A opportunities by taking the with the Tokio Marine Group. following three factors into consideration: Organic Growth Strategy (i) sound management • With regard to our non-life insurance business (including rein- (ii) robust business model; and 03 surance and large corporate properties), we intend to revise our (iii) high growth potential. insurance rates and underwrite new policies in line with the (2) Further Development and Reinforcement of Management changing business environment, taking account rising market Structure and Infrastructure rates and the tendency of customers to select insurance compa- Our international insurance business has undergone substantial nies based on their ﬁ nancial soundness. change both in size and quality as a result of the M&A transac- • We intend to steadily develop our non-life and life insurance tions. We also plan to implement a global risk-based manage- businesses focused on individuals, including efforts to diversify ment system (ERM system) to further upgrade our management our product lineups and distribution networks for individuals in structure and improve our infrastructure. emerging markets, including Asia and Brazil.

Direction of Strategies

Smooth integration of Kiln and Philadelphia Enhancement of management control for Timely and adequate response to changes Consolidated and execution of business plans the entire international insurance business in market environment

To create an international insurance business portfolio with well balanced geographical diversification and sustainable profit growth

3Financial and General Businesses (1) Financial Business (2) General Business We will pursue initiatives to improve the Group’s business port- We will seek to actively develop our general businesses further folio and facilitate earnings growth by focusing on developing and create more value for insurance customers by identifying the asset management (fee) business and other capital-efﬁ cient their continually diversifying needs and by delivering innovative businesses. security and safety-related products and services. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 23 CORPORATE STRATEGY03 AND PROFILE

Special Feature: International Business

Furthermore, in 2008, we completed two major acquisitions, Kiln and Philadelphia (PHLY), which enabled us to establish a strong presence in London and the U.S., the two key insurance markets of the world. These transactions have enabled us to establish a solid foundation from which to build sustainable profi ts within a well-balanced business portfolio. Shin-Ichiro Okada Those initiatives have led to a signifi cant growth in the over- Member of the Board Senior Managing Director all contribution that international business makes to our Group. Tokio Marine Holdings, Inc. In 2003, international insurance business accounted for a mere As the Japanese market matures, international insurance business 4% of the Group’s total adjusted earnings. This fi gure has has become our key business driver to achieve further growth increased to 6% and 21% in years 2005 and 2007 respectively. and profi tability for the entire Tokio Marine Group. It could be Our target is to grow the share of international insurance busi- also considered to be the key driving force for the overall growth ness to 27% by 2011, the fi nal year of the current mid-term of the Group; a unit which can produce sustainable profi ts corporate strategy. through the establishment of a globally diversifi ed portfolio. Share of International Insurance Business within the Group

Our international operation started in 1880, the following 4% year of the Group’s foundation, giving us 129 years of experience in this business. Today, we have built an extended global 27% network spanning 399 cities in 36 countries and regions, with 14,600 staff working overseas. The original focus of the business was on serving Japanese corporate clients operating in Europe, the U.S. and other parts 2003 2011 Projections of the world. Since 2000, however, we have expanded our operations to indigenous markets mainly through strategic Looking towards the future, the biggest agenda item for our acquisitions in the emerging territories such as Asia. The objec- international insurance business is to continue profi table tive is for us to take advantage of the high potential growth in growth. The initiatives with the highest priorities are as follows: both the economy and insurance markets of these regions. • Kiln and PHLY: full execution of their business plans In addition, through taking full advantage of our competi- • Reinsurance / large commercial P&C business: tive strengths, such as superior credit rating and large capacity, increase of profi t through timely and adequate response to we have expanded our international reinsurance business. changes in market conditions Through the foundation of Tokio Millennium Re Ltd. in Bermuda • Personal lines and life insurance: expansion in emerging in 2000 and Tokio Marine Global Ltd. in London in 2005, we markets through diversifi cation of products and distribution have established a platform to generate profi table business. channels Breakdown of Net Premiums Written from With respect to M&A opportunities, we will continue to International Insurance Business investigate and take advantage of opportunities which fulfi ll our criteria. We also regard enhancement of management control Life Philadelphia 34% as an important element to maintain and enhance disciplined Life Insurance 11% operations which are the basis of profi tability and growth. The Kiln 11% areas that are particularly important are underwriting capabilities Reinsurance 10% North & and the establishment of ERM (Enterprise Risk Management) Asia 12% Central America 7% systems, which include full risk quantifi cation expertise. Europe 3% South America 12% Non-Life Through the execution of these initiatives, we expect to Non-Life Insurance 89% 2009 Projections contribute further to the overall growth of the Group. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 24 Tokio Marine Holdings, Inc. 2009 Annual Report Kiln Group

The launch of Syndicate 1880 within a year of Kiln’s acquisition by Tokio Marine demonstrates strong evidence of the synergy that exists between the businesses, combining Kiln’s superior underwriting expertise with Tokio Marine’s fi nancial strength and stability. It is expected that further benefi ts of this synergy will be realized through the exploitation of both companies’ competitive advantages. Charles Franks Group Chief Executive Offi cer Overview of Kiln Group Kiln was founded in 1962 by Robert Kiln, who at that time was • Corporate headquarters: London, the U.K. one of the leading lights in the reinsurance market at Lloyd’s. It • Major companies: is headquartered in London, and all its underwriting is done Holding company: Kiln Group Limited within the Lloyd’s insurance market. Managing agency: R J Kiln & Co Limited In addition to its headquarters in the U.K., Kiln has offi ces in (manages Kiln’s fi ve syndicates) Hong Kong, Singapore, South Africa and Belgium. There are • Overseas offi ces: 03 330 employees and net premiums written will be £450 million Hong Kong, Singapore, South Africa and Belgium in 2009. • Lines of business: Kiln is a leading player and one of the largest managing property, reinsurance, marine, aviation, life, accident & health agents in the Lloyd’s market, providing a specialist underwriting • Financial highlights (FY2009 Projections): service based on underwriting expertise and experience. Net Premiums Written: ¥63.1 billion Under the wing of Kiln Group Limited (the Group’s holding Adjusted Earnings: ¥4.8 billion company ), R J Kiln & Co Limited (the managing agency) is • Credit rating: responsible for decision-making in the underwriting of business S&P: A+ (as Lloyd’s), A.M. Best: A (as Lloyd’s) and the management of Kiln’s syndicates at Lloyd’s. Until 2008, Kiln had four syndicates, all writing specialist insurance. At the end Competitive Advantages of 2008, Kiln launched a new syndicate known as 1880, which • One of the most prestigious brands in the Lloyd’s market is fully capitalized by Tokio Marine, and which brings the num- • A high degree of professionalism and underwriting skills ber of syndicates under management to fi ve. • Professional underwriters In summary, Kiln is noted for (1) a high degree of professionalism and highly developed underwriting skills; (2) customer-oriented management responding appropriately and quickly to customer needs based on long-term relationships with customers; and (3) management principles based on continuity, consistency and integrity. These values, including that of customer-oriented management, are values which Tokio Marine and Kiln hold in common. The combination of Kiln’s fi rst-class underwriting skills, its underwriting discipline, and its strong brand in the London Market, together with the Tokio Marine’s superior credit rating, large capacity and global network has the clear potential to achieve a signifi cant strengthening in the underwriting of direct The Lloyd’s building in London and reinsurance business in the global corporate fi eld across the Group, as well as establishing a stronger foundation for the growth of profi table business. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 25 CORPORATE STRATEGY03 AND PROFILE

Philadelphia Insurance Companies

By becoming a member of the Tokio Marine, superior credit rating and solid ﬁ nancial ground will allow PHLY to compete actively with the larger companies in the U.S. market, and proactively expand its business.

Overview of Philadelphia Insurance Companies • Corporate headquarters: Bala Cynwyd James J. Maguire, Jr. (suburbs of Philadelphia), Pennsylvania, the U.S. President & Chief Executive Offi cer • Major companies: Philadelphia Insurance Companies (PHLY) was founded in 1962 Holding company: Philadelphia Consolidated Holdings Corp. as a general agency by Mr. James J. Maguire, the current chair- Insurance company: Philadelphia Indemnity Insurance Company man. In 1993, it became a public company on NASDAQ. It now Philadelphia Insurance Company has become the top performer in the U.S. P&C insurance • Offi ce network: market, continuously demonstrating profi table growth. 48 regional and fi eld offi ces across the U.S. PHLY’s success is founded on a strategy which selects and • Line of business: focuses the underwriting of a basket of risks for profi table niches mainly in mid / small commercial (such as non-profi t social service industry, schools, and religious (specialty products focused on targeted niches) organizations). Through adherence to this strategy, PHLY has • Financial highlights (FY2009 Projections): achieved dramatic growth with a current network of 48 offi ces Net Premiums Written: ¥188.6 billion and 1,400 employees. Its net premiums written will be $1.9 Adjusted Earnings: ¥25.4 billion billion in 2009. • Credit rating: The fi rst and the most distinguishing characteristic about S&P: AA-, A.M. Best: A+ PHLY is its talented professionals, who work hard every day to provide quality products and services. They focus on Competitive Advantages providing service to customers at the highest level in the • Designing insurance products with value-added coverages insurance business. and services Secondly, the company has a very good business model. It • Marketing through multiple distribution channels has multiple channels of distribution through which its products • Clients less exposed to economic trend as follows; are offered and it proactively brings new business into the * Non profi t & social service organizations company by working in tandem with independent agents * Schools & medical facilities and brokers. * Sports facilities Thirdly, it utilizes advanced technology to provide its * Auto related (rental cars, classic cars, etc.) * Professionals (accountants, etc.) customers with the best quality products and services available in the market. The business process from marketing through underwriting and claim service is completely paperless. In addition, another unique aspect of PHLY is its community involvement. The spirit of voluntary work has been a part of its culture since its founding. PHLY is a sponsor of the Philadelphia Triathlon. Members of the company take part as triathletes, and the proceeds that they give and raise from these races go to charities. PHLY is a big supporter of the Children’s Hospital of Philadelphia, The Leukemia Association, the Red Cross Association and many other charitable associations.

Corporate headquarters of PHLY in Bala Cynwyd WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 26 Tokio Marine Holdings, Inc. 2009 Annual Report Asia

Tokio Marine has actively expanded in Asian market since 2000, Shanghai. In India, which is another booming market, we plan one of the fastest growing markets in the world, mainly to expand business with emphasis on the bottom-line, consider- through strategic acquisitions. In particular, the acquisition of ing the current challenging market conditions mainly caused by Asia General Holdings (AGH) Group, which operates non-life the elimination of tariffs. In Singapore and Malaysia, we will and life insurance business in Singapore and Malaysia, has strive to balance the growth of both non-life and life by utilizing signifi cantly enlarged the scale of our Asian operation. the platform we acquired from AGH. Net premiums written from Asia in 2009 is expected to While the current size of Asian market is rather small com- reach ¥64.4 billion* from non-life and ¥59.0 billion from life. pared to markets in Europe and the U.S., we intend to further Adjusted earnings in 2009 will be ¥6.4 billion* from non-life enhance the business development in this region in expectation and ¥1.5 billion from life, which accounts for 15% of the of its large growth potential. international insurance business portfolio. * The fi gures include Oceania. Major Operations in Asian Region One of the characteristics of our Asian business is the wide and diversifi ed network extended throughout Asia, managed by regional headquarters established in Singapore. Another South Korea unique aspect is that we operate both non-life and life business 03 in this region, whereas in other parts of the world our operation China is predominantly non-life. Our non-life insurance operations are in 12 countries and regions including China, India and ASEAN Taiwan countries, which focus on both local and Japanese related busi- Hong Kong India ness. Life insurance operation is in 4 countries, namely China, Philippines Thailand, Malaysia and Singapore. Thailand Vietnam We plan and execute strategies suited to each market depending on its stages of market development. In China, Malaysia which is expected to grow into a huge market in the near Singapore future, we intend to achieve growth and profi tability by expand- Non-life Insurance Operation Indonesia ing branch network through newly established subsidiary in Life Insurance Operation

Asia Non-life (JPY in billions) Net Premiums Written Adjusted Earnings

70 64.4 7 6.4 58.1

35 3.5 3.4

0 0 2006 2009 projections 2006 2009 projections

2009 ﬁ gures include intra-group reinsurance accounts. Asia Life (JPY in billions) Net Premiums Written Adjusted Earnings

70 2 59.0 1.5

35 0

14.2 -1.8 0 -2 2006 2009 projections 2006 2009 projections Tokio Marine Centre in Singapore (will be completed in 2010) WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 27 CORPORATE STRATEGY03 AND PROFILE

Profile of the Tokio Marine Group

Tokio Marine Holdings Business Description Tokio Marine Holdings is responsible for establishing and overseeing strategies for the entire group, managing the group’s capital, and preparing consolidated fi nancial statements. In addition, the holding company oversees subsidiaries to ensure that their compliance, internal auditing, risk management and other activities are consistent with the group’s basic policies. As the publicly owned company representing the Tokio Marine Group, the holding company also han- dles investor relations, public relations, and corporate social responsibility for the group. The holding company takes the lead in maximizing corporate value. One way is by establishing medium- and long-term strategies. The company also allocates resources to business fi elds with the best prospects for profi tability and growth. Collectively, these activities drive constant reforms of the group’s business portfolio and help capture synergies from the various businesses of subsidiaries.

Companies in which Tokio Marine Holdings Directly Invests

(As of July 1, 2009)

Tokio Marine & Nichido Fire Insurance Co., Ltd.

Nisshin Fire & Marine Insurance Co., Ltd.

E. design Insurance Co., Ltd.

Tokio Marine & Nichido Life Insurance Co., Ltd.

Tokio Marine & Nichido Financial Life Insurance Co., Ltd.

Millea Nihon Kosei SS Insurance Co., Ltd.

Tokio Marine & Nichido Anshin Consulting Co., Ltd. Tokio Marine Holdings, Inc. Tokio Marine & Nichido Career Service Co., Ltd. (listed holding company) Tokio Marine Nichido Samuel Co., Ltd.

Tokio Marine & Nichido Facilities, Inc.

Tokio Marine & Nichido Medical Service Co., Ltd.

Tokio Marine & Nichido Risk Consulting Co., Ltd.

Millea Mondial Co., Ltd.

Tokio Marine Property Investment Management, Inc.

Tokio Marine Seguradora S.A.

Tokio Marine Asia Pte. Ltd.

Tokio Marine Bluebell Re Limited WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 28 Tokio Marine Holdings, Inc. 2009 Annual Report Business Domains of the Tokio Marine Group and Main Group Companies

(As of July 1, 2009)

[Risk consulting business] Tokio Marine & Nichido Risk Consulting Co., Ltd. [Comprehensive personnel services business] Tokio Marine & Nichido Fire Insurance Co., Ltd. Tokio Marine & Nichido Career Service Co., Ltd. Nisshin Fire & Marine Insurance Co., Ltd. [Facility management business] E. design Insurance Co., Ltd. Tokio Marine & Nichido Facilities, Inc. Millea Nihon Kosei SS Insurance Co., Ltd. [Total healthcare consulting business] Tokio Marine & Nichido Medical Service Co., Ltd. Tokio Marine & Nichido Life Insurance Co., Ltd. [Senior citizen-related business] Tokio Marine & Nichido Financial Life Insurance Co., Ltd. Tokio Marine Nichido Samuel Co., Ltd. Tokio Marine Nichido Better Life Service Co., Ltd. Domestic Non-life [Assistance business] Insurance Business Millea Mondial Co., Ltd. [Insurance agent business] Tokio Marine & Nichido Anshin Consulting Co., Ltd., and others General Business Domestic Life Insurance Business 03 Customers

Financial Business (Investment advisory and investment trust services) International Insurance Business Tokio Marine Asset Management Co., Ltd. Philadelphia Consolidated Holding Corp. (Private equity investment services) Tokio Marine Management, Inc. Tokio Marine Capital Co., Ltd. Tokio Marine Seguradora S.A. (Derivatives and securities services) Tokio Marine Europe Insurance Limited Tokio Marine Financial Solutions Ltd. Tokio Marine Asia Pte. Ltd. (Real estate investment advisory services) Tokio Marine Property Investment Management, Inc. The Tokio Marine & and others Nichido Fire Insurance Company (China) Limited Tokio Millennium Re Ltd. Tokio Marine Global Ltd. Kiln Group Limited Overseas Network Tokio Marine Bluebell Re limited (As of March 31, 2009) and others

Overseas ofﬁ ces:

Located in 399 cities in 36 countries and regions Expatriate staff: 173 Local staff: Approximately 14,600

Claims agents:

Located in 250 countries and regions WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 29 CORPORATE STRATEGY03 AND PROFILE

Main Insurance Business Companies

Tokio Marine & Nichido Fire Insurance Co., Ltd. In October 2004, Tokio Marine & Nichido Fire Insurance Co., Ltd. was founded as a leading company in the domestic non-life insurance industry, formed through the merger of Tokio Marine and Nichido Fire, with their histories of 125 and 90 years respectively. Tokio Marine & Nichido has unrivaled strengths in the area of product and service development and risk consulting backed by sound ﬁ nancial strength and a high level of specialized expertise, and in its superior network of agents, its claims set- tlement service network and its worldwide network. We properly manage our business from the customer’s point of view, aiming to be chosen for our quality and aspiring for steady growth.

Company Proﬁ le (As of March 31, 2009) Established: August 1, 1879 Capital: ¥101.9 billion Net premiums written: ¥1,813.4 billion Total assets: ¥8,413.4 billion Number of employees: 15,747 Headquarters: 1-2-1, Marunouchi, Chiyoda-ku, Tokyo, Japan Telephone: 81-3-3212-6211 Website: http://www.tokiomarine-nichido.co.jp/

Nisshin Fire & Marine Insurance Co., Ltd. With an emphasis on the domestic retail market, Nisshin Fire, a non-life insurer, carries out its marketing activities ﬁ rmly rooted in the communities. Aiming to be a leading player as the “Customer-oriented company” in the non-life insurance industry, the Company endeavors to enhance its business quality by reviewing every business activity from customers’ perspective and making improvements such as development of tools to help customers easily understand its products and introduction of its unique agency commission system. With July 2008 marking the 100th anniversary of the Company, Nisshin Fire will continue to deliver customer-oriented security and compensation with the goal of becoming the most trusted retail non-life insurance company.

Company Proﬁ le (As of March 31, 2009) Established: June 10, 1908 Capital: ¥20.3 billion Net premiums written: ¥135.9 billion Total assets: ¥443.0 billion Number of employees: 2,746 Headquarters: 2-3 Kanda Surugadai, Chiyoda-ku, Tokyo, Japan Telephone: 81-3-3292-8000 Website: http://www.nisshinﬁ re.co.jp/ WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 30 Tokio Marine Holdings, Inc. 2009 Annual Report Tokio Marine & Nichido Life Insurance Co., Ltd. Tokio Marine & Nichido Life plays a key role in the domestic life insurance business, one of the core businesses of the Tokio Marine Group. Since opening in 1996 with “Customer-oriented life insurance business” as its basic philosophy, the Company has provided innovative life insurance products that suit customers’ needs through its strong sales channels of agents and Life Partners, resulting in its considerably remarkable growth that had hardly been seen among competitors. Tokio Marine & Nichido Life seeks to become the “Insurer most trusted by customers and agents in Japan” by appropriately responding to diversifying customers’ needs and working to implement further innovations in its business model.

Company Proﬁ le (As of March 31, 2009) Date of foundation: August 6, 1996 Capital: ¥55.0 billion 03 Total policy amount in force (individual insurance + individual annuities): ¥15,914.4 billion Total assets: ¥3,082.4 billion Number of employees: 2,017 Headquarters: 5-3-16 Ginza, Chuo-ku, Tokyo, Japan Telephone: 81-3-5537-6555 Website: http://www.tmn-anshin.co.jp/

Tokio Marine & Nichido Financial Life Insurance Co., Ltd. As a life insurance company specializing in variable annuities insurance and variable insurance, Tokio Marine & Nichido Financial Life plays a vital role in the Tokio Marine Group, seeking to achieve the vision described by the Group’s corporate philosophy of “Providing the safety and security necessary in order to contribute to the continuing economic aspirations of an afﬂ uent and comfortable society.” With customer trust at the base of all its activities, the Company endeavors to provide products that satisfy its customers and services from the customer’s point of view.

Company Proﬁ le (As of March 31, 2009) Date of foundation: August 13, 1996 Capital: ¥48.0 billion Total policy amount in force (individual insurance + individual annuities): ¥2,642.2 billion Total assets: ¥1,964.1 billion Number of employees: 363 Headquarters: ThinkPark Tower, 2-1-1, Osaki, Shinagawa-ku, Tokyo, Japan Telephone: 81-3-6420-4000 Website: http://www.tmn-ﬁ nancial.co.jp/ WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 31 04MANAGEMENT SYSTEM

Basic Policies for International Controls 33

Corporate Governance 35

Compliance 36 04 Information Management 38

Risk Management 39

Corporate Social Responsibility 41

Internal Audit 44

Disclosure and Investor Relations 45 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 32 Tokio Marine Holdings, Inc. 2009 Annual Report MANAGEMENT04 SYSTEM

Basic Policies for Internal Controls

Tokio Marine Holdings, based on the Corporation Law and its (d) The Company shall establish reporting rules to be used enforcement regulations, operates internal control systems in in the event of violations of laws or internal rules by a accordance with the following Basic Policies for Internal subsidiary and, a part from the usual reporting route, set Controls that were approved by its Board of Directors. up hotlines (an internal whistle-blower system) within the In accordance with the Companies Act of Japan and the Group while keeping the offi cers and employees of the Enforcement Regulations of the Companies Act of Japan, the Group companies informed as to the use of the system. Company has adopted basic policies for internal controls as (2) The Company shall establish the Group’s basic policy for described below. responding to antisocial factions and groups, and respond, in an organized and uncompromising manner and in associa- 1. System for Ensuring That Business Operations within the Tokio tion with such professionals as lawyers and the police, to Marine Group Are Appropriate antisocial factions and groups which threaten the order and As a holding company presiding over the businesses of the safety of civil society. Group, Tokio Marine Holdings shall, as appropriate, exercise its (3) The Company shall perform an effective internal audit using rights as a shareholder of its subsidiaries in a manner consistent an internal audit division that is independent from other with the goal of maximizing the Group’s corporate value. In divisions. In addition, the Company shall establish the basic accordance with the “Tokio Marine Holdings, Inc. Group internal audit policies of the Group, require its subsidiaries to Company Management Policies,” the Company shall prescribe perform an effective internal audit, monitor the implementa- the Group’s business strategies and various basic policies that tion of the internal audit, the status of the internal controls form the foundation of the Group’s business management. system and so forth and report the results thereof to the Furthermore, the Company shall enter into management agree- Board of Directors. ments with each subsidiary that include the identifi cation of important matters requiring the Company’s prior approval, such 3. System Regarding Risk Management as the subsidiaries’ business strategies and plans, thereby (1) The Company shall formulate basic policies for risk manage- enabling the Company to manage the businesses of its subsid- ment of the Group and require each subsidiary to carry out 04 iaries. The management of indirectly-owned subsidiaries shall its own risk management with respect to the operations of generally be conducted through their direct parent companies. its business. (2) The Company shall perform risk management of the entire 2. System for Ensuring That Professional Duties Are Performed in Group by establishing a Risk Management Committee that Accordance with the Laws and the Articles of Incorporation deliberates on important matters concerning the risk man- (1) The Company shall establish the Group’s basic policy relating agement of the Group, as well as by establishing a unit that to the promotion of compliance and implement a system for controls risk management, thereby capturing a sense of risk ensuring compliance of the Group. levels across the entire Group. The fundamental processes (a) The Company shall formulate a Code of Conduct and for carrying out risk management are risk identifi cation, risk ensure that the offi cers and the employees of the Group understand that top priority should be given to compliance evaluation, risk control, creation of a contingency plan and in all phases of business activity with the Code of Conduct. monitoring and reporting on risk management performance. (b) The Company shall establish a division that oversees The Company shall implement appropriate processes compliance issues, as well as a Compliance Committee, to depending on the type of business operations and the risk discuss important issues regarding the promotion of compli- characteristics of a subsidiary and shall report on the status ance within the Group. The Company shall also monitor of implementation of risk management to the Board of progress toward compliance by the Group and report the Directors. results thereof to the Board of Directors. (3) The Company shall formulate the policies regarding the (c) The Company shall require each of its subsidiaries to pre- integrated risk management and perform quantitative risk pare a compliance manual and provide training on laws and management of the entire Group to maintain the Group’s internal rules that must be observed by the offi cers and credit rating and to prevent bankruptcy. employees of such subsidiary with a view toward enhancing compliance. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 33 MANAGEMENT04 SYSTEM

4. System for Ensuring That Professional Duties Are Performed (b) Corporate auditors shall attend meetings of the Board of Effi ciently Directors and other important meetings or committees such (1) The Company shall formulate a medium-term management as the management meetings and express their plan and an annual plan for the Group (including numerical opinion. Furthermore, minutes of important meetings and targets, etc.), monitor the status of plan implementation at other important documents relating to decisions approved by subsidiary levels and report the results thereof to the Board directors shall be shown to corporate auditors at any time of Directors. upon request from corporate auditors. (2) The Company shall establish rules regarding the exercise of (c) Status of the hotline operation and important reporting authority in order to realize effi cient business performance and consultation matters shall be reported regularly to cor- by means of division of responsibilities and a chain of com- porate auditors. mand. At the same time, the Company shall construct an (d) Directors and employees shall explain matters concerning appropriate organizational structure to achieve its business the operation of their businesses at any time upon request purpose. from corporate auditors. (2) Matters concerning employees assisting with the auditing 5. System for Protecting the Customers’ Interest duties of corporate auditors, including matters concerning The Company shall establish the Group’s basic policies for pro- such employees’ independence from directors tection of customers’ interest and implement a system for pro- (a) In order to assist corporate auditors in carrying out their tecting customers’ interest, thereby ensuring customer-oriented duties, the Company shall establish a secretariat under the operation and the protection of customers’ interest. direct control of corporate auditors. Upon request from corporate auditors, the Company shall assign full-time staffs 6. System for Keeping and Managing Information with Respect who have the knowledge and ability to assist the audit. to Directors’ Performance of Duties (b) The staffs assigned to the secretariat of corporate auditors shall perform their assigned tasks ordered by corporate The Company shall establish rules on keeping and managing auditors and other work that is required to assist the audit, documents and so forth. The minutes of important meetings, and such staffs shall have the right to collect the necessary other important documents and so forth, including information information. on the performance of directors’ duties, shall be properly kept (c) The performance evaluation and transfer of, and disciplin- and managed in accordance with such rules. ary action against, such staffs shall be carried out with the approval of the standing corporate auditors. 7. System for Ensuring the Appropriateness and Reliability of (3) Coordination with corporate auditors of subsidiaries Financial Reporting Corporate auditors shall, based on audit standards and so The Company shall establish the necessary system to ensure the forth, request corporate auditors of subsidiaries to report appropriateness and reliability of fi nancial reporting of the regularly on important matters regarding the respective Group, monitor the effectiveness of the system on a periodic subsidiaries, such as the audit policy, audit status, audit basis and report the results thereof to the Board of Directors. results and so forth and shall endeavor to closely work with corporate auditors of subsidiaries in order to perform 8. System Regarding Audits by Corporate Auditors effective auditing. Additionally, corporate auditors shall (1) System of reporting to corporate auditors receive updates from directors or employees of subsidiaries (a) Directors shall regularly report the status of management, on the status of their duties at the respective subsidiaries fi nancial condition, compliance, risk management, internal as necessary. audit and so forth to corporate auditors, and when, in con- Adopted on May 2, 2006 nection with execution of their functions, they fi nd any Revised on December 17, 2007 material violation of laws or internal rules or any other Revised on July 1, 2008 condition or fact that may cause considerable damage to the Company, they shall immediately make a report thereof to corporate auditors. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 34 Tokio Marine Holdings, Inc. 2009 Annual Report Corporate Governance

Corporate Governance Policies fi ve. As a general rule, a majority of the corporate auditors shall Tokio Marine Holdings, Inc. (the “Company”), in line with the be outside corporate auditors. Tokio Marine Group Corporate Philosophy, is committed to the continuous enhancement of corporate value by fulfi lling its 3. Nomination Committee and Compensation Committee responsibilities to shareholders, customers, society, employees (1) Responsibilities of the Nomination and Compensation and other stakeholders. For this purpose, the Company hereby Committees establishes a sound and transparent corporate governance The Company shall have a Nomination Committee and a system and, as a holding company, aims to exercise appropriate Compensation Committee to serve as advisory bodies to its control over the Tokio Marine Group companies. Board of Directors. Tokio Marine Holdings corporate governance policies shall The Nomination Committee shall deliberate on the following be reviewed and amended as necessary to adapt to changes in matters and report to the Board of Directors: the business environment. • The appointment and dismissal of directors (including non- members of the board) and corporate auditors of the Company and its principal business subsidiaries (*); and I. • The criteria for the appointment of directors (including non- Management Organization members of the board) and corporate auditors of the Company 1. The Board of Directors and its principal business subsidiaries. (1) Responsibilities of the Board of Directors and its Members The Compensation Committee shall deliberate on the following The Board of Directors is responsible for decisions on important matters and report to the Board of Directors: matters relating to the execution of the Company’s business, for • Evaluation of the performance of directors (including non- supervising the performance of individual directors, and estab- members of the board) of the Company and its principal busi- lishing an effective internal control system. In addition, as the ness subsidiaries; and Board of Directors of a holding company, it is responsible for • The compensation system for directors (including non-mem- determining medium- to long-term business strategies and vari- bers of the board) and corporate auditors of the Company and 04 ous basic business policies for the Tokio Marine Group. its principal business subsidiaries Each director shall endeavor to enable the Board of Directors (*) The term “business subsidiary” refers to companies in which the Company directly holds a majority of the voting rights. to fulfi ll these responsibilities and functions. (2) Composition of Nomination and Compensation Committees (2) Composition of the Board of Directors The Nomination Committee and the Compensation Committee The number of directors shall generally be approximately ten shall generally each consist of approximately fi ve members. As a members, of whom, as a general rule, at least three shall be general rule, a majority of the members of each committee shall outside directors. be selected from outside of the Company, and the chairman of (3) Directors’ Term of Offi ce each committee shall be one of the outside members. Directors shall be appointed for a term of offi ce of one year. Directors may be re-appointed.

2. Corporate Auditors and the Board of Corporate Auditors II. Compensation System for Directors and Corporate Auditors of (1) Responsibilities of Corporate Auditors and the Board of the Tokio Marine Group Corporate Auditors (1) Compensation of Directors and Corporate Auditors of the Corporate auditors, as an independent body entrusted by share- Company holders, shall audit the performance of directors, with the aim Compensation for full-time directors (including non-members of to ensure sound and fair management and accountability. the board) consists of three elements: ﬁ xed compensation; Corporate auditors shall endeavor to conduct a high quality bonuses related to the business performance of the Company audit in accordance with the regulations of the Board of and the performance of the individual; and stock options. Corporate Auditors, auditing standards, auditing policies and Compensation for corporate auditors and part-time direc- auditing plans determined by the Board of Corporate Auditors. tors consists of two elements: ﬁ xed compensation and stock (2) Composition of the Board of Corporate Auditors options. The number of corporate auditors shall generally be around WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 3535 MANAGEMENT04 SYSTEM

(2) Compensation of Directors and Corporate Auditors of and the Company shall manage its subsidiaries through the Principal Business Subsidiaries establishment and operation of a governance system based on The compensation system for directors (including non-members these basis terms. of the board) and corporate auditors of the Company’s principal (2) Evaluation of Business Results of the Business Subsidiaries business subsidiaries shall generally be identical to that applied The Company shall evaluate the business results of each busi- to directors (including non-members of the board) and corpo- ness subsidiary of the Tokio Marine Group on an annual basis, rate auditors of the Company. comparing actual results with previously determined business results indices. The results of such evaluations shall be considered in the determination of the compensation for the directors III. (including non-members of the board) and corporate auditors Corporate Governance of Subsidiaries of each business subsidiary. Adopted on May 27, 2005 (1) Governance System Revised on July 5, 2007 In the “Basic Policies for Internal Controls,” the Company shall Revised on December 17, 2007 prescribe basic terms for the management of the business sub- Revised on July 1, 2008 sidiaries, systems relating to the promotion of compliance, risk Revised on June 29, 2009 management and internal auditing of the Tokio Marine group, The Board of Directors of Tokio Marine Holdings, Inc.

Compliance

Declaration of Commitment to Compliance shall strive to understand the applicable rules and fully comply The Tokio Marine Group is committed to the continuous with them. enhancement of its corporate value, with customer trust at the Non-compliance with this Code of Conduct, applicable laws, base of all its activities. Strict compliance is at the heart of our rules and regulations and internal rules are subject to appropri- corporate philosophy. The Tokio Marine Group Code of ate action, including investigation, corrective action, reporting Conduct is a compilation of important matters that must be to the supervising authorities, disciplinary action against parties strictly observed. We, the directors, offi cers and employees of concerned and measures against recurrence, in accordance with the Tokio Marine Group companies, promise to prioritize com- the internal rules of each Tokio Marine Group company. pliance in the conduct of business activities in accordance with the Code of Conduct. Basic Principles 1. Compliance Shuzo Sumi We shall comply with applicable laws, rules and regulations and President internal rules, engage in free and fair competition and conduct fair and equitable business activities in conformity with social norms. Tokio Marine Group Code of Conduct 1-1 Compliance The Tokio Marine Group Code of Conduct sets forth ethical We shall strictly comply with applicable laws, rules and regula- standards that are essential for translating its corporate philoso- tions and internal rules. phy into action, and shall be prioritized in all aspects of our 1-2 International Rules and Local Laws business operations and activities. The rules which we must obey are not restricted to those appli- We, the directors, offi cers and employees (including tempo- cable in Japan. We shall obey international rules and local laws, rary staff members) of the Tokio Marine Group companies, shall rules and regulations in the countries where Tokio Marine obey applicable laws, rules and regulations and internal rules Group companies operate. We shall also respect the traditions and conduct fair and equitable business activities within social and cultures in such countries. norms. In order to conduct our business in a fair manner, we 1-3 Free and Fair Competition We shall conduct our business in compliance with antitrust, WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 36 Tokio Marine Holdings, Inc. 2009 Annual Report competition and free trade laws. We shall not undertake any 3. Appropriate Actions of and High Transparency in Management action that hampers free and fair competition, including collusion We shall take appropriate management actions and strive to and cartel formation. We shall abstain from any act falling under realize a high standard of transparency in our management. “unfair trade practices” such as overreaching. We shall be mind- 3-1 Appropriate Transaction ful of regulations applicable to the activities of trade associations. We shall maintain sound relationships with clients and engage 1-4 Confl icts of Interest in appropriate and fair transactions. We shall not tolerate any action pursuing our personal or a third 3-2 Public Disclosure party’s interests against our respective company’s legitimate An appropriate disclosure of management information is very interests. important from the view point of enhancing customer trust. We 1-5 Insider Trading intend to enhance our shareholders’, investors’ and customers’ We shall not buy or sell securities of any company while in pos- understanding of our management. We shall make full, fair, session of material, nonpublic information (known as “inside accurate, timely and understandable disclosure of information, information”) regarding the subject company in violation of including, but not limited to, information included in reports securities related laws, rules or regulations. This rule applies not and documents that Tokio Marine Holdings, Inc. fi les with or only to the securities of Tokio Marine Holdings, Inc. but also to submits to any regulatory bodies and in other public communi- those of other companies. Without authorization, we shall not cations made by Tokio Marine Holdings, Inc. pass inside information to any other person. 3-3 Accurate Information 1-6 Intellectual Properties For the purpose of a full, fair, accurate, timely and understand- We shall respect and not infringe upon intellectual property rights able disclosure of information, all records, data and information of third parties, including copyrights, trademarks and patents. owned, used and managed by us should be accurate and com- 1-7 Working Environment plete. We shall cooperate fully with any appropriately autho- We shall comply with labor-related laws, rules and regulations rized internal and external auditing and inspection. and maintain a safe and proper working environment. 3-4 Confi dential Information In accordance with applicable internal rules, we shall protect the 2. Social and Political Issues confi dentiality of nonpublic information and not disclose such 04 We shall maintain proper conduct in social and political activities. information to anyone who is not authorized to receive it. In 2-1 Anti-social Forces addition, we shall not use any such information for the benefi t If we succumb to anti-social forces, including, but not limited to, of anyone other than Tokio Marine Group companies. criminal organizations, sokaiya (professional extortionists at shareholders’ meeting) or terrorist groups, it would result in 4. Respect for Human Rights and the Environment encouraging anti-social activities. In full recognition of our social We shall respect the human rights of our customers, directors, responsibility, we, together with all Tokio Marine Group compa- offi cers, employees and all other people, and respect the global nies, shall maintain a fi rm stand against all anti-social forces, and environment in all of our activities. we shall strive to prevent money laundering by endeavoring to 4-1 Anti-discrimination thoroughly identify transaction parties and by responding appro- Human rights are values widely recognized around the world, priately to transactions in which we suspect criminal involvement. and any discrimination on grounds of sex, age, profession, 2-2 Political Activities, Political Funding nationality, race, thought, creed, religion, social status or birth We shall comply with applicable laws, rules and regulations as well as any act constituting an infringement of human rights regarding public elections, political activities as well as political should never be tolerated. funds and donations, and we shall always maintain our posture 4-2 Anti-harassment toward fairness. Sexual or any other kind of harassment or intimidation should 2-3 Gifts and Entertainment never be tolerated. We shall not accept money, goods and other inappropriate or 4-3 Private Information unlawful profi ts by taking advantage of our position. Also, we In compliance with applicable laws, rules and regulations as well shall not accept or give any gifts or entertainment which are as the Tokio Marine Group Privacy Policy, we shall safeguard pri- illegal or not considered reasonable by social standards. vate information, including customers’ information, and we shall not use such information except on a need basis to carry out our business operations, in order to avoid any breach of privacy. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 37 MANAGEMENT04 SYSTEM

4-4 Protection of the Global Environment it is not appropriate to make use of the regular reporting sys- Acknowledging that the protection of the global environment is tem, please contact one of the hotlines, including the external an important responsibility, we shall comply with applicable laws, hotline (assigned law fi rm). rules and regulations, and respect the harmonization with and The reporter will not be treated disadvantageously because the improvement of the global environment in all of our activities. of his or her report. Furthermore, private information of the reporter shall be handled responsibly. The details of this mecha- The Applicable Laws, Rules, Regulations and Internal Rules nism are described in the respective compliance manual of each This Code of Conduct is not intended to cover every issue or sit- Tokio Marine Group company. uation we may face in our business activities. Please refer to the Compliance Department of Tokio Marine Holdings, Inc. is respective compliance manual of each Tokio Marine Group responsible for administration of the Tokio Marine Group Code company in order to understand the applicable laws, rules and of Conduct. Please contact this department with any inquiries regulations as well as the standing internal rules. related to the Code of Conduct. Changes to this Code of Conduct must be approved by the Reporting Board of Directors of Tokio Marine Holdings, Inc. Any waiver or In the case of non-compliance (including doubtful cases) with amendment of the Code of Conduct for directors or offi cers of this Code of Conduct, applicable laws, rules and regulations or Tokio Marine Holdings, Inc. must be also approved by the Board internal rules, we, the directors, offi cers and employees (includ- of Directors of Tokio Marine Holdings, Inc. Any such change or ing temporary staff members) of the Tokio Marine Group com- waiver will be promptly disclosed. panies, shall make a prompt report or consultation in Adopted on September 8, 2003 accordance with the applicable internal rules. If, for any reason, Revised on July , 2008

Information Management

Tokio Marine Group’s Information Security Management 2. Unless prescribed by law, rule or regulation, we shall not In accordance with the internal rules at each company based on provide personal information of our customers to third parties the Personal Information Protection Law and related guidelines, without prior consent of each such customer. the Tokio Marine Group has been making every effort to ensure 3. We will strive to prevent the divulgence, destruction, the thorough management of information by training its employ- impairment and unauthorized access of personal information ees and monitoring the situation of its information security. of our customers. When we contract out the management of personal information of our customers to an outside service Tokio Marine Group’s Privacy Policy provider, we shall supervise the service provider appropriately, The Tokio Marine Group is committed to the continuous as needed. enhancement of corporate value, with customer trust at the base 4. Whenever we receive requests from our customers to view or of all its activities. Guided by this corporate philosophy, we, the update their personal information we hold, we shall respond Tokio Marine Group, shall comply with laws, rules, regulations promptly in accordance with laws, rules and regulations. and guidelines related to the protection of personal information, We also welcome comments and questions regarding the appropriately manage personal information as described below management of personal information of our customers. and implement other appropriate security measures for the 5. We shall provide comprehensive supervision, instructions protection of personal information of our customers. and education to our employees who handle personal infor- 1. We shall acquire the personal information of our customers mation of our customers to ensure that such information is in a manner that is both legal and fair. Unless prescribed by managed appropriately. law, rule or regulation, we shall notify or publicize the purposes 6. We will continue to revise and aim to improve our internal for using personal information of our customers and shall use systems and procedures to protect personal information of such information within these limits. our customers. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 38 Tokio Marine Holdings, Inc. 2009 Annual Report Risk Management

Risk Management System of the Tokio Marine Group Role of Tokio Marine Holdings In the Tokio Marine Group, subsidiaries themselves take proac- Tokio Marine Holdings promotes the establishment and tive approaches to control risks related to their business activi- enhancement of the risk management system for the entire ties while Tokio Marine Holdings ascertains the risk situation Group in accordance with the Tokio Marine Group’s basic poli- facing the Group as a whole and assumes the task of conduct- cies for risk management. The Company also manages quanti- ing risk management for the entire Group. Tokio Marine tative risks for the Group in order to retain credit ratings and Holdings considers insurance underwriting risks and investment prevent bankruptcy. risks (market risks, credit risks and real estate investment risks) as core risks that must be controlled as sources of earnings and Role of Subsidiaries manages those risks actively. Operating subsidiaries actively conduct their own risk manage- In addition, with respect to ofﬁ ce work risks, system risks ment as well as that of their subsidiaries by developing their and other risks pertaining to the Group’s business activities, own risk management policies in line with the Group’s policies. Tokio Marine Holdings conducts appropriate risk management by identifying where those risks lie and taking measures to prevent or mitigate them in order to ensure stable business management.

Tokio Marine Holdings

Insurance underwriting risks

Board of Management Market risks Directors Meeting Core risks Credit risks Real estate investment risks 04 Risk Management Department Liquidity risks Risk Corporate Office work risks Management Auditors Committee System risks

Associated Information leakage risks risks Legal risks Board of Corporate Reputational risks Auditors Other risks

Indication of policies, Reporting guidance/supervision/administration/monitoring

Subsidiaries WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 39 MANAGEMENT04 SYSTEM

Basic Policies for Risk Management allowable risk quantity semiannually, and manage operations The Tokio Marine Group has developed the basic policies for risk so that risk quantity does not exceed this limit. management described below. Tokio Marine Holdings and its (3) Evaluation and monitoring of capital allocation plans subsidiaries manage risks in line with these policies. Tokio Marine Holdings ensures that the expected risk volume (1) Basic policy for risk management is within the allowable risk parameters set out in the Group The Basic Policy for Risk Management for the Tokio Marine capital allocation plan. In other words, the Risk Management Group sets forth the organizations responsible for risk man- Department, which has an internal control function, checks agement, defi nition of risks, organizations and guidelines for and examines the capital allocation plans to make sure that risk management that subsidiaries shall establish, and the they are appropriate in terms of shareholders’ equity. issues that must be reported. Subsidiaries conduct risk man- Moreover, the status of risk volume is periodically reviewed. agement based on this policy. Capital Allocation System (2) Basic policy for integrated risk management The capital allocation system has been designed to assess the The Tokio Marine Group has developed the “Basic Policy for profi tability against the capital allocated to each business unit of Integrated Risk Management,” which establishes the funda- the Tokio Marine Group and to maximize the corporate value of mental matters concerning the quantitative risk management the Tokio Marine Group through capital reallocation. of the entire Group, defi nition of risk amount and returns, Under this system, capital is identifi ed as pseudo-capital based and the process for scrutinizing risk planning and monitoring. on a risk volume calculated as a uniform gauge of all types of (3) Basic policy for crisis management risk. The capital allocation system and integrated risk manage- The Tokio Marine Group has developed the “Basic Policy for ment are intricately related and based on the same risk evalua- Crisis Management” for the entire Group; this policy clarifi es tion methods. the chain of command in the event of an emergency as well (1) Formulation of capital allocation plan as policies related to the measures to minimize losses and The Tokio Marine Group allocates capital to each business recover ordinary business operations. Subsidiaries also main- unit in accordance with the plans created each fi scal year. tain their own systems for crisis management established in In doing business, each business unit takes risks appropriate accordance with these basic policies. to the amount of the capital that has been allocated. (2) Evaluation of risk/return and improvement of business portfolio Integrated Risk Management The level of risk/return is evaluated for operations in each The main purpose of integrated risk management is to quantita- business unit using certain management indicators. Based on tively recognize all risks and properly control them so that the this, capital is reallocated to business units with higher prof- Group can limit to no more than its capital those risks that have itability and growth potential and/or new business. The emerged. introduction of a decision-making process based on the (1) Risk quantifi cation quantitative analysis method enables us to select business The Tokio Marine Group quantifi es potential losses on all risks units that should be focused on at more detailed level. that could arise within the given time horizons and that could Through this approach, we seek to increase the return on exceed the given probability levels. The risk quantifi cation equity (ROE) of the entire Group and maximize corporate method used is a risk indicator called “value at risk” (VaR). value while continuing to increase earnings. (2) Determination of allowable risk parameters Integrated risk management aims to maintain credit ratings and prevent bankruptcy by keeping risks within allowable parameters. The allowable risk parameter for the Tokio Marine Group as a whole has been defi ned in terms of an upper limit on the quantity of risk. We determine this WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 40 Tokio Marine Holdings, Inc. 2009 Annual Report Corporate Social Responsibility

The Tokio Marine Group’s Approach to CSR Participation in the United Nations Global Compact The Tokio Marine Group considers that the execution of its In recognition of the fact that the concepts behind and details of Corporate Philosophy itself is equal to the fulﬁ llment of CSR. the 10 principles for behavior in connection with human rights, The Group’s goal is to increase the value it provides every stake- labor practices, environment, and anti-corruption advocated in holder and, as a result, to increase its corporate value which is the United Nations Global Compact coincide with the Tokio the sum total of the value it provides all stakeholders, through Marine Group’s approach to CSR initiatives and its CSR Charter, the implementation of CSR practices. It has established the Tokio Marine Holdings and Tokio Marine & Nichido have taken “Tokio Marine Group CSR Charter” as a set of behavioral guide- part since 2005 in the United Nations Global Compact. lines for such implementation of CSR practices.

Tokio Marine Group CSR Charter The Tokio Marine Group is committed to fulﬁ lling its corporate social responsibilities (CSR) by implementing its management philosophy to achieve sustainable growth together with the development of society, in accordance with the following CSR Promotion Structure principles: The Tokio Marine Group has established the CSR Board chaired Products and Services by the president of Tokio Marine Holdings with membership • We aim to provide the society with products and services to consisting of the presidents of each of the Group’s companies. meet its needs for safety and security. The Board formulates fundamental CSR policies and plans for Respect for Human Rights and Dignity the entire Group, in addition to monitoring the progress of such • We respect and actively promote the recognition of human initiatives. rights for all people. 04 • We strive to ensure an energetic working environment that is Each Group company promotes its own CSR activities in line both safe and healthy and to promote training and education of with the policies and plans formulated by the Board. our employees. Additionally, Tokio Marine Holdings has established a CSR • We respect the right to privacy and strive to enforce through Section to coordinate CSR efforts across the Group and provide control of personal information. CSR support to each of the Group companies. Protection of the Global Environment • Acknowledging that the protection of the global environment The CSR Promotion Structure in the Tokio Marine Group is an important responsibility for all corporate entities, we respect harmony with and improving the global environment in Tokio Marine Holdings all of our activities. Board of Directors (Management Meeting) Contribution to Communities and Societies • As a member of various communities and societies, we respect CSR Board the diversity of cultures and customs in different countries and regions and we aim to contribute actively to society in response Corporate Planning Dept CSR Section to the needs of the current era. Compliance Tokio Marine Group Companies • While striving to maintain high ethical standards at all times, we will pursue strict compliance in all aspects of our business Board of Directors activities. CSR Promotion Officer Communication • We intend to disclose information timely and appropriately Workplace and to promote dialogue with all our stakeholders to ensure effective corporate management. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 41 MANAGEMENT04 SYSTEM

Protection of the Global Environment Working to Reduce Environmental Burden Around the World The business activities of the Tokio Marine Group involve Around the world, the companies of the Tokio Marine Group the consumption of large quantities of paper resources, work tirelessly to reduce their environmental impact. A few electricity, gasoline and other forms of energy. In order to examples follow. minimize the environmental burden of such activities, the Tokio Marine and Fire Insurance Co. (Hong Kong) Ltd. has Group is committed to promoting recycling, saving energy taken on efforts to reduce paper and electricity usage at its and conserving resources by going paperless. offi ces by recycling obsolete offi ce equipment, opting for energy-saving devices and holding “paperless” business meetings. Mangrove Afforestation Project Tokio Marine & Nichido’s mangrove afforestation project was initiated in 1999 in six countries across Southeast Asia and the Offi ce notice board promotes reducing South Pacifi c’s Fiji Island. As of March 2009, project had planted the use of paper cups 5,901 hectares of new forest in these regions. India was added to the scope of afforestation activities in fi scal 2009, bringing the total number of target countries to seven. Mangrove trees in these regions are not only essential in helping prevent global warming by absorbing large volumes of At P.T. Asuransi Tokio Marine Indonesia, shredded offi ce paper

CO2, but also serve as bulwarks against tsunamis and other nat- and used newspaper are recycled for use as writing paper, enve- ural disasters. In addition, by providing ﬁ shery and forestry lopes, notebooks and business cards. These activities contribute resources essential to local livelihoods, mangrove trees contrib- to the effective use of paper resources as well as to generating ute to stabilizing and improving the local living environment, employment for the local recycling industry. as well as to achieving environmental sustainability on a global scale.

above: Envelopes, notebooks and business cards made from recycled paper

left: Recycling

“Green Lessons: The Mangrove Story” Staged Nationwide Through the telling of “The Mangrove Story,” Tokio Marine & Nichido has developed an educational program to raise awareness of environmental issues among elementary school children in Japan. The program is led by Group employees and representatives who bring lessons to schools throughout Japan. Children learn about how mangrove trees and other activities, such as uniform recycling, contribute to ecosystem preservation and the prevention of global warming. Participating schools receive a lasting memento of the lessons in the form of planters made of Lesson in progress at Suginami Momoi-Daiichi recycled uniforms. Elementary School in Tokyo WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 42 Tokio Marine Holdings, Inc. 2009 Annual Report Contribution to Local Communities and Society The “MOTTAINAI Campaign” The business activities of the Tokio Marine Group are founded on Nisshin Fire & Marine Insurance Co., Ltd. is a staunch supporter the support of our customers and representatives in local regions of the “MOTTAINAI Campaign,” an environmental protection around the world. In turn, we undertake activities to support scheme proposed by Nobel Peace Prize laureate Wangari local communities and society with the aim of remaining one Maathai of Kenya. with the planet and its people. Since fi scal 2006, Group employees have voluntarily partici- pated in the “MOTTAINAI Mt. Fuji Clean-up Competition” Supporting the Pink-Ribbon Movement that was established with the aim of getting people to Tokio Marine & Nichido Life Insurance Co., Ltd. actively supports value nature. the efforts of the Pink-Ribbon Movement to educate women about the importance of early breast cancer detection. These efforts are coordinated by the nonprofi t organization J. POSH (Japan Breast Cancer Pink Ribbon Movement). In fi scal 2008, the Company provided venues to support the “Kids and Family Program” held in 8 locations throughout Japan. Moreover, numerous employees volunteered their time to promote early breast cancer screening. Clad in pink wind- breakers, employees and other volunteers distributed informa- tional brochures on the street at 80 locations throughout Japan. Volunteer Tree Planting in Mexico Since fi scal 2006, Tokio Marine Compañía de Seguros, S.A. de C.V. has worked to implement volunteer afforestation activities locally. In August 2008, about 30 local volunteers and NGO members joined 183 employees and their family members to 04 take part in planting 3,500 trees in the Lagunas de Zempoala The Pink-Ribbon National Park near Mexico City. Movement

The Scholarship Project for Students in Thailand Since 2005, The Sri Muang Insurance Co., Ltd. (Thailand); Millea Life Insurance (Thailand) Public Co., Ltd.; Tokio Marine Asia Pte. Ltd (Singapore); and Tokio Marine & Nichido Fire Insurance Co., Ltd. in cooperation with the National Council on Social Welfare of Thailand (NCSWT) have supported the educational ambitions of approximately 330 underprivileged secondary and high school, technical college and university students by offering scholarships for tuition, uniforms and school supplies.

The 4th scholarship conferment ceremony held in 2009 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 43 MANAGEMENT04 SYSTEM

Internal Audits

Internal Audit Framework of the Tokio Marine Group Holdings, and the Board of Directors of each member company Within the Tokio Marine Group, internal audits are executed of the Group. If any serious problem is found in the audit based on the aim that “in order to play an effective role in results, it is reported to the Board of Directors of Tokio Marine achieving the Group’s management targets, internal audits Holdings as well. covering the full scope of operations performed in its business should not simply detect and point out problems in the internal offi ce processes, but also assess the internal control system and Unifi ed Framework of Internal Audit within the Tokio Marine Group propose measures for improvements.” Within Tokio Marine A set of unifi ed “Basic Policies for Internal Audit” and “Internal Holdings and its insurance subsidiaries, each company has its Audit Rules” are applied to all internal audits that are performed own internal audit department, which performs appropriate by internal audit departments of the Group companies, in order internal audits on key components of the internal control system, to ensure consistent internal auditing within the Tokio Marine risk management and compliance, in accordance with the type Group. In addition, priority issues and checking points on internal and level of risks. The internal audit department of Tokio Marine audits are defi ned every year and internal audit plans of the Group Holdings directly carries out auditing and monitoring on the companies require a prior approval of Tokio Marine Holdings. internal control system of those subsidiaries that do not have Through these approaches, Tokio Marine Holdings endeavors their own internal audit division. The results of these audits are to enhance the consistency of internal auditing throughout reported to the internal audit department of Tokio Marine the Group.

Joint Audit In order to raise the effectiveness of internal audits, there are also cases where the internal audit departments of each subsidiary work together. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 44 Tokio Marine Holdings, Inc. 2009 Annual Report Disclosure and Investor Relations

We make every effort to disclose information about the Tokio Disclosure Materials Marine Group’s current ﬁ nancial condition and future business Tokio Marine Holdings and the ﬁ ve group insurance companies development in a fair and understandable manner that facili- create disclosure documents and materials and strive to improve tates precise understandings for our stakeholders. information content.

Disclosure Policy of the Tokio Marine Group We aim to disclose meaningful information regarding the Tokio Marine Group that enhances management transparency and fairness in connection with our “Corporate Social Responsibility.” 1. Disclosure Policy It is our policy to disclose information expeditiously in accordance with the “Rules on the Timely Disclosure of Corporate Information by Issuers of Listed Securities and the Like” stipulated by the Tokyo Stock Exchange. We strive for the timely, accurate and fair disclosure of other information that is relevant to our customers, shareholders and investors, representative ofﬁ ces and employees as well as the society at large. Websites 2. Methods of Disclosure Disclosure pursuant to stock exchange rules, regulations and Please refer to the following websites for disclosure of informa- other requirements is made through the Timely Disclosure tion relating to each Tokio Marine Group company: network, or TDnet, of the Tokyo Stock Exchange as well as the Tokio Marine & Nichido Fire Insurance Co., Ltd. Nisshin Fire & Marine Insurance Co., Ltd. 04 http://www.tokiomarine-nichido.co.jp/ http://www.nisshinﬁ re.co.jp/ press and other appropriate means. We subsequently post the disclosed information on our website. Other disclosure is made in an appropriate manner based on the content of the relevant information. 3. Additional Information Disclosure made based on this Disclosure Policy is intended to inform the public regarding the Tokio Marine Group’s activities E. design Insurance Preparatory Co., Ltd. Millea Nihon Kousei SS Insurance Co., Ltd. accurately, expeditiously and fairly and is not intended to consti- http://www.edsp.co.jp/ http://www.millea-nkssi.co.jp/ tute an investment solicitation. Adopted on November 30, 2004 Revised on July 5, 2007 Revised on July 1, 2008

Tokio Marine & Nichido Life Insurance Co., Ltd. Tokio Marine & Nichido Financial Life Insurance Co., Ltd. http://www.tmn-anshin.co.jp/ http://www.tmn-ﬁ nancial.co.jp/ WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 45 MANAGEMENT04 SYSTEM

Investor Relations Activities IR Activities via the Internet Tokio Marine Holdings strives to provide shareholders and inves- Tokio Marine Holdings proactively discloses information on its tors with timely, accurate information disclosure to facilitate website with regard to fi nancial information, Group structure, their decisions. This is one important aspect of our investor rela- management strategies and CSR activities. Through these tions (IR) activities. efforts, we are striving to offer “visible IR” that makes people Moreover, Tokio Marine Holdings promotes active dialogue feel close to the Group with a sense of trust. with shareholders and investors. We sincerely welcome the In addition, Tokio Marine Holdings provides webcasts of many opinions and suggestions gained through interaction with important IR events, such as business results briefi ngs, informa- shareholders and investors. Briefi ng sessions, one-on-ones and tion meetings for investors and business plan presentations. other IR activities serve as effective feedback channels, inform- Decisions of the Board of Directors and the monthly business ing our pursuit of sound and transparent corporate governance. results of Tokio Marine Nichido are among the many other resources provided through the Website.

Fiscal 2008 IR Activities http:// www.tokiomarinehd.com/ Many of the Company’s IR activities are specifi cally designed to encourage constructive dialogue with shareholders and investors. Tokio Marine Holdings seeks to benefi t from valuable insight on further improving business operations and management. With this goal, Tokio Marine Holdings strives to offer briefi ngs in a variety of formats to meet diverse interests and needs.

Tokio Marine Holdings Receives Activities for Individual Investors “IR Prime Business Award Special” • Information meetings for individual investors: Twice, approximately 510 participants The Japan Investor Relations Association (JIRA) recognized Tokio • Securities company investment seminars: Marine Holdings with the “IR Prime Business Award Special” on 10 times, approximately 470 participants November 12, 2008. • I R fair for individual investors: JIRA makes this annual award to listed member companies Once, approximately 500 participants that display excellent achievement by proactively engaging in IR Activities for Institutional Investors activities, demonstrating deep understanding of the central role • Large meetings: Four times, approximately 390 participants IR plays in gaining positive recognition from market players. • Small meetings: Nine times, approximately 52 companies Tokio Marine Holdings was the only ﬁ nancial institution in the • Individual meetings: 224 times, primarily with analysts and banking and insurance sectors to win this coveted award. institutional investors • Quarterly results conference calls for institutional investors: Four times Japanese and English for each, Total eight times, approximately 492 participants • Overseas investor meetings: Six times, 126 participating ﬁ rms

At the TSE IR Festa 2008 held by the Tokyo Stock Exchange in March 2009, Tokio Marine Holdings explained the business outline of its Group companies. The Group’s exhibition booth also offered a driving simulator, providing participants with a dynamic demonstration on safe driving. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 46 Tokio Marine Holdings, Inc. 2009 Annual Report 05PERFORMANCE

Change in Key Business Indicators (Consolidated Basis) 48

Financial Information 49

Solvency Margin Ratio 103

Interest-rate Sensitivity of ALM Surplus Value 106

Embedded Value 107

Statutory Reserve 112

05 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 47 PERFORMANCE05

Change in Key Business Indicators (Consolidated Basis)

(Yen in millions if not indicated speciﬁ cally) 2009 2008 2007 2006 2005 (April 1, 2008– (April 1, 2007– (April 1, 2006– (April 1, 2005– (April 1, 2004– March 31, 2009) March 31, 2008) March 31, 2007) March 31, 2006) March 31,2005) Ordinary income 3,503,102 3,710,066 4,218,557 3,399,984 2,899,467 Net premiums written 2,134,243 2,245,135 2,148,683 1,978,664 1,925,081 Ordinary profit (15,128) 179,071 168,042 136,563 139,999 Net income 23,141 108,766 93,014 89,960 67,604 Net assets 1,639,514 2,579,339 3,410,707 3,209,849 2,305,243 Total assets 15,247,223 17,283,242 17,226,952 14,260,020 11,624,496 Net assets per share (Yen) 2,066.92 3,195.45 4,127.60 1,910,092.71 1,340,336.54 Net income per share-Basic (Yen) 29.13 133.54 112.10 52,980.59 38,618.19 Net income per share-Diluted (Yen) 29.12 133.50 112.07 52,973.36 — Capital ratio (%) 10.68 14.83 19.73 22.51 19.83 Return on equity: ROE (%) 1.10 3.65 2.82 3.26 2.93 Price-to-earnings ratio: PER (Ratio) 82.22 27.56 38.89 43.98 40.40 Net cash provided by operating activities 527,964 822,143 1,367,717 899,584 385,740 Net cash used in investing activities (1,693,745) (433,857) (986,389) (1,082,442) (75,449) Net cash used in/provided by financing activities 104,189 (66,404) (51,018) (45,030) (144,902) Cash and cash equivalents at end of year 877,551 1,988,696 1,670,006 1,277,127 1,476,879 Number of employees 28,063 24,959 23,280 19,761 18,910

Notes: 1. For calculating net assets, the Company has adopted “Accounting Standard for Presentation of Net Assets in the Balance Sheet” (Accounting Standards Board of Japan, hereinafter “ASBJ” Guidance No.5, and “Guidance on Accounting Standard for Presentation of Net Assets in the Balance Sheet” (ASBJ Guidance No. 8) for the fiscal year ended March 31, 2007. 2. Effective September 30, 2006, the Company conducted a stock split of its shares of common stock whereby one share was split into 500 shares. 3. Because there were no potential common shares, “Net income per share-Diluted” is not shown for the fiscal year ended March 31, 2005 and prior fiscal years. 4. Number of employees is head-count of staffs currently at work. 5. Number of employees increased by 3,104 from 2008 to 2009, mainly due to the newly consolidated company, Philadelphia Consolidated Holding Corp. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 48 Tokio Marine Holdings, Inc. 2009 Annual Report Financial Information

1. Preparation of Consolidated Financial Statements The accompanying consolidated financial statements have been prepared in accordance with the Regulations Concerning Terminology, Formats and Preparation Methods of Consolidated Financial Statements (Ministry of Finance Ordinance No. 28, 1976, hereinafter the “Consolidated Statements Regulations”). The consolidated financial statements have been also prepared in conformity with the Enforcement Regulations for the Insurance Business Law (Ministry of Finance Ordinance No. 5, 1996, hereinafter the “Insurance Law Enforcement Regulations”), as stipulated under Articles 46 and 68 of the Consolidated Statements Regulations. The consolidated financial statements for the fiscal year ended March 31, 2008 were prepared in accordance with but prior to the amendment of both the Consolidated Statements Regulations and the Insurance Law Enforcement Regulations. On the other hand, the consolidated financial statements for the fiscal year ended March 31, 2009 have been prepared in accordance with the amended Consolidated Statements Regulations and the Insurance Law Enforcement Regulations. The Company and its domestic consolidated subsidiaries maintain their accounts and records in accordance with the provisions set forth in the Corporate Law of Japan and the Securities and Exchange Law of Japan, and in conformity with accounting principles generally accepted in Japan, which are different in certain respects as to application and disclosure requirements of International Financial Reporting Standards. Amounts less than ¥1 million have been omitted in the consolidated financial statements and. As a result, the total thereto do not neces- sarily agree with the sum of the individual account balances.

2. Auditors’ Certification Pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Law of Japan, Tokio Marine Holdings’ consolidated financial statements for the fiscal year ended March 31, 2008 and that for the fiscal year ended March 31, 2009 have been audited and certified by PricewaterhouseCoopers Aarata.

05 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 49 PERFORMANCE05

1 Financial Statements of Tokio Marine Holdings and its Consolidated Subsidiaries (1) Consolidated Financial Statements q Consolidated Balance Sheets

(Yen in millions except percentages)

As of March 31, 2009 As of March 31, 2008 Increase and Composition Composition Decrease by Notes No. Amount Amount ratio ratio Comparison Assets (%) (%) Cash and bank deposits *4 461,589 3.03 794,528 4.60 (332,939) Call loans 352,576 2.31 199,725 1.16 152,851 Receivables under resale agreement 302,893 1.99 42,951 0.25 259,942 Receivables under security borrowing transactions 47,224 0.31 95,520 0.55 (48,295) Monetary receivables bought 458,556 3.01 1,712,207 9.91 (1,253,650) Money trusts 8,688 0.06 39,215 0.23 (30,527) Securities *2*4*6 10,695,095 70.14 12,138,621 70.23 (1,443,526) Loans *3*7 611,310 4.01 685,780 3.97 (74,470) Tangible fi xed assets *1 338,414 2.22 338,367 1.96 47 Lands *4 161,238 — 161,238 Buildings *4 142,607 — 142,607 Construction in progress 10,658 — 10,658 Other 23,909 — 23,909 Intangible fi xed assets 427,931 2.81 55,270 0.32 372,660 Software 4,341 — 4,341 Goodwill 290,577 — 290,577 Other 133,012 — 133,012 Other assets 1,241,986 8.15 1,033,007 5.98 208,979 Deferred tax assets 219,116 1.44 65,565 0.38 153,551 Customers’ liabilities under acceptances and guarantees 102,208 0.67 97,688 0.57 4,520 Valuation allowances for bad debts (20,368) (0.13) (15,207) (0.09) (5,160) Total assets 15,247,223 100.00 17,283,242 100.00 (2,036,018) Liabilities Insurance liabilities 11,253,382 73.81 11,173,679 64.65 79,703 Outstanding claims *4 1,192,416 1,098,017 94,398 Underwriting reserves *4 10,060,966 10,075,661 (14,695) Short-term corporate bonds — — 99,965 0.58 (99,965) Corporate bonds 299,922 1.97 333,123 1.93 (33,200) Other liabilities 1,536,993 10.08 2,222,147 12.86 (685,153) Payables under security lending transactions 600,575 1,448,797 (848,221) Other liabilities *4 936,417 773,349 163,067 Retirement benefi t obligations 148,506 0.97 138,459 0.80 10,047 Retirement benefi t obligations for directors and 88 0.00 397 0.00 (309) corporate auditors Provision for employees’ bonus 20,272 0.13 25,355 0.15 (5,083) Provision for demolition of fi xed assets 3,359 0.02 3,773 0.02 (414) Reserve under the special law 56,449 0.37 121,989 0.71 (65,540) Price fl uctuation reserve 56,449 121,989 (65,540) Deferred tax liabilities 41,937 0.28 332,322 1.92 (290,384) Negative goodwill 144,587 0.95 155,000 0.90 (10,413) Acceptances and guarantees 102,208 0.67 97,688 0.57 4,520 Total liabilities 13,607,708 89.25 14,703,902 85.08 (1,096,194) Net assets Shareholders’ equity Common stock 150,000 0.98 150,000 0.87 — Retained earnings 1,006,891 6.60 1,010,521 5.85 (3,630) Treasury stock (59,663) (0.39) (9,792) (0.06) (49,871) Total shareholders’ equity 1,097,227 7.20 1,150,728 6.66 (53,501) Valuation and translation adjustments Unrealized gains on securities, net of taxes 608,106 3.99 1,402,487 8.11 (794,381) Deferred gains/losses on hedge transactions 17,796 0.12 11,952 0.07 5,844 Foreign currency translation adjustments (95,297) (0.63) (1,673) (0.01) (93,623) Total valuation and translation adjustments 530,605 3.48 1,412,765 8.17 (882,159) Stock acquisition rights 849 0.01 619 0.00 229 Non-controlling interest 10,832 0.07 15,224 0.09 (4,392) Total net assets 1,639,514 10.75 2,579,339 14.92 (939,824) Total liabilities and net assets 15,247,223 100.00 17,283,242 100.00 (2,036,018)

The accompanying notes are an integral part of the consolidated financial statements. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 50 Tokio Marine Holdings, Inc. 2009 Annual Report w Consolidated Statements of Income

(Yen in millions except percentages) Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008) Increase and Decrease by Notes No. Amount Ratio Amount Ratio Comparison

(%) (%) Ordinary income 3,503,102 100.00 3,710,066 100.00 (206,963) Underwriting income 3,130,076 89.35 3,312,472 89.28 (182,396) Net premiums written 2,134,243 2,245,135 (110,892) Deposited premiums from policyholders 166,255 200,161 (33,905) Investment income on deposit premiums 71,021 75,050 (4,029) Life insurance premiums 746,083 788,387 (42,304) Reversal of outstanding claims 7,915 — 7,915 Other underwriting income 4,557 3,737 820 Investment income 306,664 8.75 342,121 9.22 (35,457) Interest and dividends 237,622 285,424 (47,802) Gains on money trusts 38 517 (479) Gains on trading securities — 7,163 (7,163) Gains on sales of securities 71,693 58,913 12,779 Gains on redemption of securities 482 2,994 (2,511) Gains on derivatives 64,639 45,468 19,170 Other investment income 3,209 16,690 (13,480) Transfer of investment income on deposited premiums (71,021) (75,050) 4,029 Other ordinary income 66,361 1.89 55,471 1.50 10,890 Amortization of negative goodwill 10,604 10,436 167 Other ordinary income 55,757 45,034 10,723 Ordinary expenses 3,518,230 100.43 3,530,994 95.17 (12,764) Underwriting expenses 2,232,902 63.74 2,683,605 72.33 (450,702) Net claims paid 1,306,574 1,270,275 36,299 Loss adjustment expenses *1 87,634 86,469 1,165 Agency commissions and brokerage *1 442,153 444,572 (2,418) Maturity refunds to policyholders 271,180 288,961 (17,780) Dividends to policyholders 316 31 285 Life insurance claims 90,935 88,676 2,258 Provision for outstanding claims — 52,442 (52,442) Provision for underwriting reserves 21,443 445,465 (424,022) Other underwriting expenses 12,663 6,711 5,951

(Continued on following page)

05 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 51 PERFORMANCE05

Investment expenses 726,659 20.74 326,884 8.81 399,775 Losses on money trusts 2,619 4,178 (1,559) Losses on trading securities 1,130 — 1,130 Losses on sales of securities 33,365 14,430 18,934 Impairment losses on securities 162,205 38,221 123,983 Losses on redemption of securities 18,120 1,747 16,372 Losses on separate account 440,628 209,781 230,846 Other investment expenses 68,591 58,525 10,065 Operating and general administrative expenses *1 519,928 14.84 482,160 13.00 37,767 Other ordinary expenses 38,739 1.11 38,344 1.03 395 Interest paid 13,470 20,682 (7,212) Increase in valuation allowances for bad debts 5,693 298 5,394 Losses on bad debts 299 126 173 Equity in losses of affi liates *2 5,085 3,667 1,418 Other ordinary expenses 14,190 13,569 620 Ordinary profi t (15,128) (0.43) 179,071 4.83 (194,199) Extraordinary gains and losses Extraordinary gains 83,761 2.39 31,199 0.84 52,562 Gains on sales of fi xed assets 3,146 3,265 (118) Gains on changes in equity of affi liates — 4 (4) Reversal of reserve under the special law 65,540 — 65,540 Reversal of price fl uctuation reserve 65,540 — 65,540 Other extraordinary gains *3 15,074 27,929 (12,854) Extraordinary losses 21,696 0.62 35,683 0.96 (13,987) Losses on sales of fi xed assets 2,430 2,040 390 Impairment losses on fi xed assets *4 7,313 8,654 (1,341) Provision under the special law — 8,761 (8,761) Provision for price fl uctuation reserve — 8,761 (8,761) Losses on reduction of fi xed assets — 9 (9) Other extraordinary losses *5 11,952 16,217 (4,264) Income or losses before income taxes 46,937 1.34 174,587 4.71 (127,650) Income taxes-current 37,402 1.07 88,031 2.37 (50,628) Income taxes-deferred (12,577) (0.36) (23,763) (0.64) 11,185 Total income taxes 24,824 0.71 64,268 1.73 (39,443) Non-controlling interest (1,028) (0.03) 1,553 0.04 (2,581) Net income 23,141 0.66 108,766 2.93 (85,624)

The accompanying notes are an integral part of the consolidated financial statements. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 52 Tokio Marine Holdings, Inc. 2009 Annual Report e Consolidated Statements of Changes in Shareholders’ Equity

(Yen in millions) Year ended Year ended Increase and March 31, 2009 March 31, 2008 Decrease by (April 1, 2008- (April 1, 2007- Comparison March 31, 2009) March 31, 2008) Shareholders’ equity Common stock Beginning balance 150,000 150,000 — Changes during the year Total changes during the year — — — Ending balance 150,000 150,000 — Retained earnings Beginning balance 1,010,521 1,024,216 (13,694) Changes due to the change of accounting policies applied to foreign subsidiaries 13,306 — 13,306 Changes during the year Dividends (43,168) (31,964) (11,203) Net income 23,141 108,766 (85,624) Disposition of treasury stock (138) (139) 1 Cancellation of treasury stock — (85,410) 85,410 Changes in the scope of consolidation 1,900 (4,427) 6,327 Changes in the scope of equity method afﬁ liates 1,997 — 1,997 Others (Note) (670) (520) (150) Total changes during the year (16,936) (13,694) (3,241) Ending balance 1,006,891 1,010,521 (3,630) Treasury stock Beginning balance (9,792) (5,038) (4,754) Changes during the year Repurchase of treasury stock (50,302) (90,464) 40,162 Disposition of treasury stock 431 300 130 Cancellation of treasury stock — 85,410 (85,410) Total changes during the year (49,871) (4,754) (45,116) Ending balance (59,663) (9,792) (49,871) Total shareholders’ equity Beginning balance 1,150,728 1,169,178 (18,449) Changes due to the change of accounting policies applied to foreign subsidiaries 13,306 — 13,306 Changes during the year Dividends (43,168) (31,964) (11,203) Net income 23,141 108,766 (85,624) Repurchase of treasury stock (50,302) (90,464) 40,162 Disposition of treasury stock 292 161 131 Changes in the scope of consolidation 1,900 (4,427) 6,327 Changes in the scope of equity method 1,997 — 1,997 Others (Note) (670) (520) (150) Total changes during the year (66,807) (18,449) (48,358) 05 Ending balance 1,097,227 1,150,728 (53,501) (Continued on following page) WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 53 PERFORMANCE05

(Yen in millions) Years ended Years ended Increase and March 31, 2009 March 31, 2008 Decrease by (April 1, 2008- (April 1, 2007- Comparison March 31, 2009) March 31, 2008) Valuation and translation adjustments Unrealized gains on securities, net of tax Beginning balance 1,402,487 2,217,476 (814,988) Changes during the year Net changes in items other than shareholders’ equity (794,381) (814,988) 20,607 Total changes during the year (794,381) (814,988) 20,607 Ending balance 608,106 1,402,487 (794,381) Deferred gains and losses on hedge transactions Beginning balance 11,952 7,728 4,223 Changes during the year Net changes in items other than shareholders’ equity 5,844 4,223 1,621 Total changes during the year 5,844 4,223 1,621 Ending balance 17,796 11,952 5,844 Foreign currency translation adjustments Beginning balance (1,673) 4,031 (5,705) Changes during the year Net changes in items other than shareholders’ equity (93,623) (5,705) (87,918) Total changes during the year (93,623) (5,705) (87,918) Ending balance (95,297) (1,673) (93,623) Stock acquisition rights Beginning balance 619 336 283 Changes during the year Net changes in items other than shareholders’ equity 229 283 (54) Total changes during the year 229 283 (54) Ending balance 849 619 229 Non-controlling interest Beginning balance 15,224 11,956 3,268 Changes during the year Net changes in items other than shareholders’ equity (4,392) 3,268 (7,661) Total changes during the year (4,392) 3,268 (7,661) Ending balance 10,832 15,224 (4,392) Total net assets Beginning balance 2,579,339 3,410,707 (831,367) Changes due to the change of accounting policies applied to foreign subsidiaries 13,306 — 13,306 Changes during the year Dividends (43,168) (31,964) (11,203) Net income 23,141 108,766 (85,624) Repurchase of treasury stock (50,302) (90,464) 40,162 Disposition of treasury stock 292 161 131 Changes in the scope of consolidation 1,900 (4,427) 6,327 Changes in the scope of equity method afﬁ liates 1,997 — 1,997 Others (Note) (670) (520) (150) Net changes in items other than shareholders’ equity (886,323) (812,918) (73,405) Total changes during the year (953,131) (831,367) (121,763) Ending balance 1,639,514 2,579,339 (939,824) Note: “Others” for the fiscal year ended March 31, 2008 is the valuation differences of assets in accordance with local accounting standards in foreign countries where consolidated subsidiaries or equity method affiliates are located. “Others” for the fiscal year ended March 31, 2009 is the valuation differences of assets in accordance with accounting standards in foreign countries where equity method affiliates are located. The accompanying notes are an integral part of the consolidated financial statements. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 54 Tokio Marine Holdings, Inc. 2009 Annual Report r Consolidated Statements of Cash Flows

(Yen in millions)

Year ended Year ended Increase and March 31, 2009 March 31, 2008 Decrease by (April 1, 2008– (April 1, 2007– Comparison March 31, 2009) March 31, 2008) Notes No. Amount Amount I Cash fl ows from operating activities Income before income taxes 46,937 174,587 (127,650) Depreciation 20,833 20,524 308 Extraordinary depreciation of fi xed assets — 5,692 (5,692) Impairment losses on fi xed assets 7,313 8,654 (1,341) Amortization of goodwill 8,774 7,311 1,462 Amortization of negative goodwill (10,604) (10,436) (167) Increase in outstanding claims 9,600 53,831 (44,231) Increase in underwriting reserves 18,658 445,026 (426,367) Increase (decrease) in valuation allowances for bad debts 4,716 (808) 5,525 Increase in retirement benefi t obligations 10,338 7,360 2,977 (Decrease) increase in retirement benefi t obligations for directors and corporate auditors (309) 28 (337) Decrease in retirement benefi t obligations due to transfer to defi ned-contribution — (26,151) 26,151 pension plan (Decrease) increase in provision for employees’ bonus (3,913) 188 (4,101) (Decrease) increase in provision for demolition of fi xed assets (414) 3,773 (4,187) (Decrease) increase in price fl uctuation reserve (65,540) 8,761 (74,302) Interest and dividends (237,622) (285,424) 47,802 Net losses/(gains) on securities 147,003 (14,953) 161,956 Interest expenses 13,470 20,682 (7,212) Foreign exchange (gains)/losses (7,905) 39,313 (47,218) (Gains) on tangible fi xed assets (356) (1,215) 859 Equity in losses on affi liates 5,085 3,667 1,418 Investment losses on separate accounts 440,628 209,781 230,846 (Increase) in other assets (other than investing and fi nancing activities) (112,584) (119,402) 6,818 Decrease in other liabilities (other than investing and fi nancing activities) 56,108 48,052 8,055 Others 47,807 2,795 45,012 Subtotal 398,025 601,641 (203,616) Interest and dividends received 248,161 271,206 (23,045) Interest paid (13,407) (20,172) 6,764 Income taxes paid (110,907) (45,235) (65,671) Others 6,093 14,703 (8,609) Net cash provided by operating activities 527,964 822,143 (294,178) II Cash fl ows from investing activities Net (increase) in deposits (213,128) (12,189) (200,938) Purchases of monetary receivables bought (655,583) (1,119,993) 464,410 Proceeds from sales and redemption of monetary receivables bought 904,063 951,335 (47,272) Increase in money trusts (2,000) (810) (1,189) 05 Decrease in money trusts 29,896 40,023 (10,127) Purchases of securities (3,868,685) (4,516,456) 647,771 Proceeds from sales and redemption of securities 3,440,526 3,626,194 (185,667) Loans made (203,602) (301,682) 98,080 Proceeds from collection of loans 270,320 276,776 (6,455) (Increase)/decrease in cash received under security lending transactions (911,077) 670,887 (1,581,964) Others (3,709) (2,210) (1,498) II (a) Subtotal (1,212,977) (388,124) (824,852) (I+II (a)) (685,012) 434,018 (1,119,030) Purchases of tangible fi xed assets (22,632) (16,673) (5,959) Proceeds from sales of tangible fi xed assets 10,527 14,795 (4,268) Payments related to acquisition of consolidated subsidiaries *3 (467,160) (43,720) (423,440) Payments to acquire equity of subsidiaries (1,502) (135) (1,367) Net cash used in investing activities (1,693,745) (433,857) (1,259,887)

(Continued on following page) WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 55 PERFORMANCE05

(Yen in millions) Year ended Year ended Increase and March 31, 2009 March 31, 2008 Decrease by (April 1, 2008– (April 1, 2007– Comparison March 31, 2009) March 31, 2008) Notes No. Amount Amount III Cash fl ows from fi nancing activities Proceeds from borrowing 261,053 2,153 258,899 Repayments of borrowing (19,554) (14) (19,539) Proceeds from issuance of short-term corporate bonds 127,941 451,841 (323,899) Redemption of short-term corporate bonds (228,000) (352,000) 124,000 Proceeds from issuance of corporate bonds 22,125 84,380 (62,254) Redemption of corporate bonds (59,113) (41,791) (17,322) Proceeds from issuance of commercial paper — 692,989 (692,989) Redemption of commercial paper (16,654) (780,355) 763,700 Net increase in payables under securities lending transactions 111,151 — 111,151 Repurchases of treasury stock (50,302) (90,464) 40,162 Dividends paid (43,113) (31,906) (11,207) Dividends paid to non-controlling interest (107) (222) 114 Proceeds from paid-up share capital from non-controlling interest 1,049 1,386 (336) Others (2,284) (2,399) 115 Net cash provided by (used in) fi nancing activities 104,189 (66,404) 170,594 IV Effect of exchange rate changes on cash and cash equivalents (49,513) (5,887) (43,625) V Net (decrease) increase in cash and cash equivalents (1,111,103) 315,993 (1,427,097) VI Cash and cash equivalents at beginning of year 1,988,696 1,670,006 318,689 VII Increase in cash and cash equivalents due to newly consolidated subsidiaries 287 2,696 (2,408) VIII Decrease in cash and cash equivalents due to exclusion from consolidation (328) — (328) IX Cash and cash equivalents at end of year *1 877,551 1,988,696 (1,111,144)

The accompanying notes are an integral part of the consolidated financial statements. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 56 Tokio Marine Holdings, Inc. 2009 Annual Report Basis of Presentation and Significant Accounting Policies

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

1. Scope of (1) Number of consolidated companies: 61 companies (1) Number of consolidated subsidiaries: 53 companies consolidation For details of Tokio Marine Holdings’ consolidated subsidiaries, For details of Millea Holdings’ consolidated subsidiaries, please refer to “Tokio Marine Holdings and its Subsidiaries” in please refer to “Tokio Marine Holdings and its Subsidiaries” in “Corporate Data”. “Corporate Data.” Philadelphia Consolidated Holding Corp., Philadelphia Millea Nihon Kosei, Kiln Ltd, Kiln (UK) Holdings Limited, Kiln Indemnity Insurance Company and 12 other companies are Reinsurance Ltd., Kiln Underwriting Limited and 20 other included in the consolidation from the fi scal year ended March companies are included in the consolidation from the fi scal year 31, 2009 as these entities became subsidiaries of the Company ended March 31, 2008 due to these entities having become through the acquisition of shares, newly founded or for other subsidiaries through an acquisition of shares during the fi scal reasons. year ended March 31, 2008. Vetra Finance Corporation and one other company are Tokio Marine Bluebell Re Limited and two other companies excluded from the consolidation in the fi scal year ended March are included in the consolidation from the fi scal year ended 31, 2009 as Vetra ceased to operate its bond investment March 31, 2008 due to an increase in importance. business and redeemed the unsecured subordinated debts. Kiln Ltd and Kiln Reinsurance Ltd are excluded from the consolidation in the fi scal year ended March 31, 2009 as these companies have been dissolved. Asia General Asset Bhd. and one other company are excluded from the consolidation in the fi scal year ended March 31, 2009 because procedures to dissolve these two companies have commenced. In the fi scal year ended March 31, 2009, TM Asia Insurance Singapore Ltd. changed its name to Tokio Marine Insurance Singapore Ltd., effective July 1, 2008; Real Seguros S.A. changed its name to Tokio Marine Seguradora S.A. effective August 20, 2008; and Kiln (UK) Holdings Limited changed its name to Kiln Group Limited effective January 19, 2009.

(2) Names of major non-consolidated subsidiaries (2) Names of major non-consolidated subsidiaries (No change) Tokio Marine & Nichido Adjusting Service Co., Ltd. and Tokio Marine Capital Co., Ltd. are non-consolidated subsidiaries of the Company. Each non-consolidated subsidiary is small in scale in terms of total assets, sales, net income or loss for the period and retained earnings. As such non-consolidated subsidiaries are not considered to materially affect any reasonable determination as to the Group’s ﬁ nancial condition and results of operations, these companies are excluded from the consolidation.

2. Application (1) Number of affi liates accounted for by the equity method: (1) Number of affi liates accounted for by the equity method: of the equity 8 companies 10 companies (Names of major affi liates accounted for by the equity method) (Names of major affi liates accounted for by the equity method) method Sino Life Insurance Co., Ltd. Sino Life Insurance Co., Ltd. Tianan Insurance Company Limited IBEX Insurance Service Limited is accounted for by the equity Real Tokio Marine Vida e Previdência S.A. method from the fi scal year ended March 31, 2009 because it became an affi liate company through an acquisition of International Marine Insurance Managers SA (Pty) Ltd and 4 ownership interests. other companies are accounted for by the equity method from 05 the fi scal year ended March 31, 2008 due to these entities International Marine Insurance Managers SA (Pty) Ltd (“IMIM”) having become affi liates through an acquisition of shares during is no longer an affi liate accounted for by the equity method the fi scal year ended March 31, 2008. Sino Life Insurance Co., as the Company increased its ownership interests and IMIM Ltd. is accounted for by the equity method from the fi scal year became a consolidated company in the fi scal year ended March ended March 31, 2008 due to an increase in importance. 31, 2009. Tianan Insurance Company Limited (“Tianan”) is no longer an affi liate accounted for by the equity method as the Company’s equity interest has been diluted as a result of Tianan’s issuance of new shares to third parties during the fi scal year ended March 31, 2009. Real Tokio Marine Vida e Previdência S.A. is no longer an affi liate accounted for by the equity method as all the shares previously held by the Company through a subsidiary were sold during the fi scal year ended March 31, 2009. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 57 PERFORMANCE05

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

(2) The non-consolidated subsidiaries (Tokio Marine & Nichido (2) The non-consolidated subsidiaries (Tokio Marine & Nichido Adjusting Service Co., Ltd., Tokio Marine Capital Co., Ltd., Adjusting Service Co., Ltd., Tokio Marine Capital Co., Ltd., etc.) etc.) and other afﬁ liates (IFFCO-TOKIO general insurance Co. and other afﬁ liates (Tokio Marine Malayan Insurance Co., Inc., Ltd., etc.) have not been accounted for by the equity method etc.), which are not subject to the equity method, have not been because these companies have had a minor effect on the accounted for by the equity method because these companies Company’s consolidated net income or loss for the current have had a minor effect on the Company’s consolidated period as well as retained earnings, on a consolidated basis, net income or loss for the current period as well as retained respectively. earnings, respectively.

(3) (No change) (3) The Company owns 30.1% of the total voting rights of Japan Earthquake Reinsurance Co., Ltd. through Tokio Marine & Nichido and Nisshin Fire. However, the Company does not consider Japan Earthquake Reinsurance Co., Ltd. to be its affi liate since it believes that it can not exert a signifi cant infl uence on any policy making decisions of Japan Earthquake Reinsurance’s operations given the highly public nature of the company.

(4) (No change) (4) With regard to any company accounted for by the equity method that has a different closing date from that of the consolidated fi nancial statements, the fi nancial statements of that company for its fi scal year are used for presentation in the consolidated fi nancial results.

3. Balance There are one domestic subsidiary and 51 overseas subsidiaries The closing date of the fi scal year for one of the domestic sheet date of whose balance sheet dates are December 31. Their fi nancial consolidated subsidiaries and 43 overseas consolidated statements are used for the preparation of the consolidated subsidiaries is December 31. The closing date of the fi scal year consolidated fi nancial statements on the basis of their respective balance for two of the overseas consolidated subsidiaries is January subsidiaries sheet dates due to the difference between the balance sheet 31. Since the differences in the closing dates do not exceed dates of the subsidiaries and that of the consolidated fi nancial three months, the fi nancial statements of the consolidated statements is no more than three months. Appropriate subsidiaries as of December 31 and January 31, respectively, adjustments for the consolidation are made for material are used for presentation in the accompanying consolidated transactions that occur during the periods from their respective fi nancial statements. As for any signifi cant transactions taking balance sheet dates to the consolidated balance sheet date. place during the period between the subsidiaries’ closing dates and the consolidated closing date, necessary adjustments are made for the purpose of consolidation. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 58 Tokio Marine Holdings, Inc. 2009 Annual Report Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

4. Accounting (1) Valuation of securities (1) Valuation of securities policies a. (No change) a. Trading securities are valued by the mark-to-market method, with the costs of their sales being calculated based on the moving-average method. b. (No change) b. Held-to-maturity debt securities are recorded by using the amortized cost method based on the moving-average method (straight-line depreciation method). c. (No change) c. Debt securities earmarked for policy reserves are stated at amortized cost under the straight-line method in accordance with the Industry Audit Committee Report No. 21 “Temporary Treatment of Accounting and Auditing Concerning Securities Earmarked for Policy Reserve in Insurance Industry” issued by the Japanese Institute of Certifi ed Public Accountants (the “JICPA”), November 16, 2000. The amount of debt securities earmarked for policy reserves recorded on the consolidated balance sheets and their market value are presented under “(Securities), 3. Bonds earmarked for policy reserve with fair value” below. The following is a summary of the risk management policy concerning debt securities earmarked for policy reserves. In order to adequately manage interest rate risk related to assets and liabilities, Tokio Marine & Nichido Life has established the following policy reserve subgroups: “the dollar-denominated policy reserve for insurance policies during the period of deferment regarding individual annuity insurance denominated in U.S. dollars with a policy cancellation refund based on market interest rates”, “accumulated fund of policy reserve for insurance policies during the period of deferment regarding individual annuity insurance with fl oating interest rates”, “accumulated fund of policy reserve for insurance policies of single payment whole-life insurance with fl oating interest rates denominated in U.S. dollars” and “accumulated fund of policy reserve for insurance policies of single payment individual annuity insurance”. Tokio Marine & Nichido Life’s policy is to match the duration of the policy reserve in each subgroup with debt securities of the same or similar duration that are earmarked for policy reserves

d. (No change) d. Other securities with fair value are recorded by the mark-to- market method based upon the market price on the closing date. The total amount of unrealized gains/losses on other securities is included in net assets, net income taxes and costs of sales sold are calculated using the moving-average method

e. (No change) e. Other securities with no fair value are either stated at cost or amortized cost under the straight-line method, cost being determined by the moving average method. 05

f. (No change) f. Investments in non-consolidated subsidiaries and afﬁ liates that are not subject to the equity method are stated at cost determined by the moving-average method.

g. (No change) g. Securities held in individually managed money trusts that are mainly invested in securities for trading are accounted for under the mark-to-market method.

(2) Valuation of derivative transactions (2) Valuation of derivative ﬁ nancial instruments (No change) Derivative ﬁ nancial instruments are accounted for by the mark- to-market method. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 59 PERFORMANCE05

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

(3) Depreciation of signifi cant tangible fi xed assets (3) Depreciation of tangible fi xed assets a. Tangible fi xed assets Depreciation of tangible fi xed assets owned by the Company Tangible fi xed assets owned by the Company and its domestic and its domestic consolidated subsidiaries is computed using the consolidated subsidiaries are depreciated using the declining declining balance method. balance method. However, depreciation of buildings (excluding auxiliary Only buildings that were acquired on or after April 1, 1998 facilities attached to such buildings, etc.) that were acquired excluding fi xtures attached to buildings are depreciated using on or after April 1, 1998 is computed using the straight-line the straight-line method. method. b. Intangible fi xed assets (Change in accounting policies) Intangible fi xed assets recognized in an acquisition of overseas For the fi scal year ended March 31, 2008, the Company and its subsidiaries are amortized over the estimated useful life domestic consolidated subsidiaries have adopted a depreciation refl ecting the pattern of assets’ future economic benefi ts. method for tangible fi xed assets acquired on or after April 1, 2007, in accordance with the amended Corporate Tax Law of Japan. As a result, in comparison with the previous method, ordinary gains and income before income taxes for the fi scal year ended March 31, 2008, decreased in the amount of 420 million yen. The fi nancial impact of the above method on segment information is described in “Segment Information.”

(Additional information) For the fi scal year ended March 31, 2008, the Company and its domestic consolidated subsidiaries amortized the residual value of tangible fi xed assets which were acquired on or before March 31, 2007 and which have met the end of the amortization period. The residual value is amortized over a fi ve-year period by the straight line method. As a result, in comparison with the previous method, ordinary profi t and income before income taxes for the fi scal year ended March 31, 2008 decreased by 649 million yen. The fi nancial impact of the above method on segment information is described in “Segment Information.” Tokio Marine & Nichido recognized an extraordinary depreciation by changing the useful life and residual value of its buildings, which became inadequate due to a probability of a new rebuilding plan. Increase of accumulated depreciation due to this change, which amounted to 5,692 million yen, is included in “Other ordinary expenses.” As a result, income before income taxes decreased by the same amount compared to the amount before the change. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 60 Tokio Marine Holdings, Inc. 2009 Annual Report Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

(4) Accounting policies for signifi cant reserves and allowances (4) Accounting policies for signifi cant reserves and allowances a. Valuation allowances for bad debt a. Valuation allowances for bad debt (No change) In order to provide reserves for losses from bad debts, a general allowance is made pursuant to the rules of asset self-assessment and the rules of asset write-off. Allowances are made by domestic consolidated insurance subsidiaries as follows: For claims to any debtor who has legally, or in practice, become insolvent (due to bankruptcy, special liquidation or suspension of transactions with banks based on the rules governing clearing houses, etc.) and for receivables from any debtor who has substantially become insolvent, reserves are provided based on the amount of any such claim minus the amount expected to be collectible calculated based on the disposal of collateral or execution of guarantees. For claims to any debtor who is likely to become insolvent in the near future, reserves are provided based on the overall solvency assessment of the relevant debtor, the net amount of such claims considered to be collectible through the disposal of collateral or execution of guarantee is deducted from such claims. For claims other than those described above, the amount of claims is multiplied by the default rate, which is computed based on historical loan loss experience in certain previous periods, and is included in the accompanying consolidated fi nancial statements. For specifi ed overseas claims, any estimated losses arising from political or economic situations in the relevant countries are accounted for as reserves for specifi ed overseas claims in the accompanying consolidated fi nancial statements. In addition, all claims are assessed by the asset accounting department and the asset management department in accordance with the rules for self-assessment of asset quality. Subsequently, the asset auditing departments, which are independent from other asset-related departments, conduct audits of the assessment results of the other asset-related departments. Reserves for bad debts are accounted for based on such assessment results as stated above. b. Retirement benefi t obligations b. Retirement benefi t obligations (No change) To provide for employees’ retirement benefi ts, the Company and its domestic consolidated subsidiaries have recorded the amount deemed to be incurred at the end of the fi scal year ended March 31, 2008 based on the projected retirement benefi t obligations and related pension assets at the end of the fi scal year ended March 31, 2008. Prior service costs are charged to expenses in each 05 subsequent consolidated fi scal year by using the straight-line method with costs based on a certain term (14 years) that is based on the average remaining service years of the employees when costs were incurred. Actuarial differences are charged to expenses in the subsequent consolidated fi scal year by using the straight-line method based on a certain term (1-14 years) that is based on the average remaining service years of the employees when amounts were incurred. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 61 PERFORMANCE05

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

(Additional Information) Pursuant to the Defi ned Contribution Pension Law of Japan, Tokio Marine & Nichido transferred a portion of its corporate pension fund to a defi ned-contribution pension plan as of July 2, 2007 in accordance with “Accounting Standard for Transfers between Retirement Benefi t Plans” (Accounting Standards Board of Japan , hereinafter “ASBJ”, Guidance No.1. January 31, 2002). This resulted in an extraordinary gain amounting to 26,151 million yen for the fi scal year ended March 31, 2008.

c. Retirement benefi t obligations for directors and corporate c. Retirement benefi t obligations for directors and corporate auditors auditors (No change) Some domestic consolidated subsidiaries set aside a reserve for retirement benefi ts for their directors and corporate auditors as of the end of the fi scal year ended March 31, 2008, in accordance with their internal remuneration regulations.

d. Provision for employees’ bonus d. Provision for employees’ bonus (No change) To provide for payment of bonuses to employees, the Company and its consolidated domestic subsidiaries maintain reserves for employees’ bonuses based on the expected amount to be paid.

e. Provision for demolition of fi xed assets e. Provision for demolition of fi xed assets (No change) To provide for payment of expenses related to dismantling a building, Tokio Marine & Nichido provided a reserve for demolition of fi xed assets based on the projected amount to be paid for dismantling the building.

f. Price fl uctuation reserve f. Price fl uctuation reserve (No change) Domestic consolidated insurance subsidiaries maintain reserves under Article 115 of the Insurance Business Law in order to provide for possible losses or damages arising from price fl uctuation of stock, etc.

(5) Consumption tax (5) Consumption tax (No change) For the Company and its domestic consolidated subsidiaries, consumption tax is accounted for by the tax-excluded method. However, underwriting and general administrative costs incurred by domestic consolidated insurance subsidiaries are accounted for by the tax-included method. In addition, any nondeductible consumption taxes, in respect of assets is included in other assets (as suspense payments) and is amortized over ﬁ ve years using the straight-line method.

(6) Lease transactions (6) Lease transactions Among the transactions of ownership non-transferable ﬁ nance The Company and its domestic consolidated subsidiaries lease, the transactions with lease periods commencing prior to account for ﬁ nance lease transactions, other than those that April 1, 2008 are accounted under the accounting policy applied are deemed to transfer the ownership of the leased properties to normal lease transactions. to lessees under a method similar to that applicable to ordinary operating leases. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 62 Tokio Marine Holdings, Inc. 2009 Annual Report Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

(7) Hedge accountings (7) Hedge accountings a. Interest rate a. Interest rate To mitigate interest rate fl uctuation risks associated with To mitigate interest rate fl uctuation risks associated with long-term insurance policies, Tokio Marine & Nichido and long-term insurance policies, Tokio Marine & Nichido and Tokio Marine & Nichido Life implemented an Asset Liability Tokio Marine & Nichido Life implemented an Asset Liability Management framework designed to manage such risks by Management framework designed to manage such risks by evaluating and analyzing fi nancial assets and insurance liabilities evaluating and analyzing fi nancial assets and insurance liabilities simultaneously. simultaneously. As for some of interest rate swap transactions that are utilized As for some of interest rate swap transactions that are utilized to manage such risks, Tokio Marine & Nichido and Tokio to manage such risks, Tokio Marine & Nichido and Tokio Marine & Nichido Life have applied deferral hedge treatment Marine & Nichido Life have applied deferral hedge treatment and evaluated hedge effectiveness based upon the Industry and evaluated hedge effectiveness based upon the Industry Audit Committee Report No. 26, “Accounting and Auditing Audit Committee Report No. 26, “Accounting and Auditing Treatments related to Adoption of Accounting for Financial Treatments related to Adoption of Accounting for Financial Instruments in the Insurance Industry” (issued by the Japanese Instruments in the Insurance Industry” (issued by the Japanese Institute of Certifi ed Public Accountant (“JICPA”) on September Institute of Certifi ed Public Accountant (“JICPA”) on September 3, 2002—hereinafter called “Report No. 26”). 3, 2002—hereinafter called “Report No. 26”). Hedge effectiveness is evaluated by examining the interest Hedge effectiveness is evaluated by examining the interest rate conditions which affect calculation of theoretical value of rate conditions which affect calculation of theoretical value of both the hedged items and the hedging instruments. As for any both the hedged items and the hedging instruments. As for any deferred hedge gains based on the Industry Audit Committee’s deferred hedge gains based on the Industry Audit Committee’s Report No.16, “Accounting and Auditing Treatments related Report No.16, “Accounting and Auditing Treatments related to Adoption of Accounting for Financial Instruments in the to Adoption of Accounting for Financial Instruments in the Insurance Industry” (issued by the JICPA, on March 31, 2000) Insurance Industry” (issued by the JICPA, on March 31, 2000) prior to application of the Report No. 26, Tokio Marine & prior to application of the Report No. 26, Tokio Marine & Nichido has amortized such deferred hedge gains as of the Nichido has amortized such deferred hedge gains as of the end of March 2003 over the remaining period of hedging end of March 2003 over the remaining period of hedging instruments (1–17 years) by using the straight-line method, instruments (1–17 years) by using the straight-line method, and Tokio Marine & Nichido Life has amortized deferred hedge and Tokio Marine & Nichido Life has amortized deferred hedge gains as of the end of March 2002 over the remaining period gains as of the end of March 2002 over the remaining period of hedging instruments (6–10 years) by using the straight- of hedging instruments (6–10 years) by using the straight- line method, respectively, in accordance with the transitional line method, respectively, in accordance with the transitional measures in the Report No. 26. The amount of deferred hedge measures in the Report No. 26. The amount of deferred hedge gains under this transitional treatment as of March 31, 2009 is gains under this transitional treatment as of March 31, 2008 is 35,922 million yen and the amount allocated to gains or losses 47,576 million yen and the amount allocated to gains or losses for the fi scal year ended March 31, 2009 is 11,654 million yen. for the fi scal year ended March 31, 2008 is 14,434 million yen. In addition, Tokio Marine & Nichido applies the deferred In addition, Tokio Marine & Nichido applies the deferred hedge accounting for interest rate swap transactions which hedge accounting for interest rate swap transactions which are used to hedge the interest rate risk related to bonds are used to hedge the interest rate risk related to bonds issued by Tokio Marine & Nichido. Hedge effectiveness is not issued by Tokio Marine & Nichido. Hedge effectiveness is not evaluated since the critical terms of hedged items and hedging evaluated since the critical terms of hedged items and hedging instruments are same and thus believed to be highly hedge instruments are same and thus believed to be highly hedge effective. effective. b. Foreign exchange b. Foreign exchange With regard to some currency swap and forward contract With regard to some currency swap and forward contract transactions, which are utilized to reduce the future foreign transactions, which are utilized to reduce the future foreign 05 exchange risk associated with assets denominated in foreign exchange risk associated with assets denominated in foreign currencies, Tokio Marine & Nichido applies deferred hedge currencies, Tokio Marine & Nichido applies deferred hedge accounting and/or fair value hedge accounting. Nisshin Fire accounting and/or fair value hedge accounting and/or matching applies matching treatment. The effectiveness of these hedging treatment. Nisshin Fire also applies deferred hedge accounting treatments is evaluated by assessing the price fl uctuation of and matching treatment. As for deferred hedge accounting both hedging instruments and hedged items. However, hedge and fair value hedge accounting, hedge effectiveness is not effectiveness is not evaluated, since critical terms of hedged evaluated, since critical terms of hedged items and hedging items and hedging instruments are the same and thus believed instruments are the same and thus believed to be highly hedge- to be highly hedge-effective. effective.

_____ (8) Accounting standards of overseas subsidiaries The Company complies with accounting standards of the region or country in which the relevant consolidated subsidiaries are located. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 63 PERFORMANCE05

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

5. Valuation of (No change) The Company has adopted the mark-to-market method. assets and The full valuation method is adopted in valuing assets and liabilities of consolidated subsidiaries at the initial consolidation liabilities of date. consolidated subsidiaries

6. Amortization Negative goodwill recognized as a liability on the consolidated Negative goodwill recognized as a liability on the consolidated of goodwill balance sheets is amortized over 20 years using the straight-line balance sheets is amortized over 20 years using the straight-line method. method. and negative Goodwill recognized as an asset on the consolidated balance Goodwill recognized as an asset on the consolidated goodwill sheets is amortized in the following manner. As for the goodwill balance sheets is amortized in the following manner. As for the in connection with Philadelphia Consolidated Holdings Corp., goodwill in connection with Tokio Marine & Nichido Financial the goodwill is amortized over 20 years using the straight-line Life, the goodwill is amortized over 5 years using the straight- method. As for the goodwill in connection with Kiln Group line method. As for the goodwill in connection with Kiln Ltd, Limited, the goodwill is amortized over 10 years using the the goodwill is amortized over 10 years using the straight-line straight-line method. Other goodwill is amortized over 5 to method. Other goodwill is amortized over 5 to 15 years using 15 years using the straight-line method. Other goodwill and the straight-line method. Other goodwill and negative goodwill negative goodwill in small amounts are amortized at one time. in small amounts are amortized at one time.

7. Scope of (No change) Cash and cash equivalents for the consolidated statements of cash and cash cash ﬂ ows consist of cash on-hand, demand deposits and short- term investments with original maturities or redemption of 3 equivalents months or less at the date of acquisition. included in the consolidated statements of cash ﬂ ows

Changes in Significant Matters Related to Financial Statements

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

Application of “Practical Solution on Unifi cation of Accounting Policies _____ Applied to Foreign Subsidiaries for Consolidated Financial Statements” The Company has adopted “Practical Solution on Unifi cation of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ Practical Issues Task Force No. 18, May 17, 2006) for the fi scal year ended March 31, 2009 and has implemented adjustments required for consolidated fi nancial reporting. As a result, for the fi scal year ended March 31, 2009, ordinary loss decreased, and net income before income taxes increased by 4,351 million yen, respectively. The impact of the above change on the Company’s segment information is detailed in “Segment information” section.

Accounting policies applied to lease transactions _____ The transactions of ownership non-transferable fi nance lease were accounted under the accounting policy similar to that applicable to lease transaction. However, from the fi scal year ended March 31, 2009, the Company has adopted “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13, ASBJ 1st Division, June 17, 1993, revised as of March 30, 2007) and “Guidance on Accounting Standard for Lease Transactions” (ASBJ, Guidance No. 16, The Japanese Institute of Certifi ed Public Accountants, Accounting Practice Committee, January 18, 1994, revised as of March 30, 2007). Accordingly, the transactions of ownership non-transferable lease with lease periods commencing prior to April 1, 2008 are accounted under the accounting policy applied to normal sales transactions. The impact of the changes described above on ordinary loss and net income before income taxes for the fi scal year ended March 31, 2009 is considered immaterial. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 64 Tokio Marine Holdings, Inc. 2009 Annual Report Changes in Presentation

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

Consolidated balance sheets Consolidated balance sheets From the fi scal year ended March 31, 2009, in accordance with the 1 In accordance with the amendment of the Enforcement Regulations of amendments to the Enforcement Regulations of Insurance Business Law the Insurance Business Law of Japan, the reserve for retirement benefi ts of Japan, it is required to present “Land,” “Buildings,” “Construction in for directors and corporate auditors that was included in “reserve for progress” and “Other” in the breakdown of “Tangible fi xed assets,” and retirement benefi ts” as of the end of the year ended March 31, 2007 is “Software,” “Goodwill” and “Other” in the breakdown of “Intangible fi xed presented as “reserve for retirement benefi ts for directors and corporate assets.” auditors” as of the end of the year ended March 31, 2008. The breakdown of tangible fi xed assets and intangible fi xed assets for the The amount of the reserve for retirement benefi ts for directors and fi scal year ended March 31, 2008 was as follows: Land: 165,480 million yen, corporate auditors included in “reserve for retirement benefi ts” as of the Buildings: 145,497 million yen, Construction in progress: 2,629 million yen, end of the year ended March 31, 2007 was 369 million yen. Other tangible fi xed assets: 24,760 million yen, Software: 3,614 million yen, Goodwill: 45,224 million yen and Other intangible fi xed assets: 6,431 million 2 “Payables under securities lending transactions”, which was included in yen. “Other liabilities” as of the end of the fi scal year ended March 31, 2007, is specifi cally presented as a comprising item of “Other liabilities” as of the end of the year ended March 31, 2008, since the amount of the item exceeded 5% of the sum of liabilities and net assets. The amount of “Payables under securities lending transactions” as of the end of the year ended March 31, 2007 was 840,706 million yen.

Consolidated statements of changes in shareholders’ equity _____ From the fi scal year ended March 31, 2009, the item previously presented as “Decrease in connection with newly consolidated subsidiaries” is presented as two separate items: “Changes in the scope of consolidation” and “Changes in the scope of equity method.” The purpose of this change is to improve the comparability of the Company’s consolidated fi nancial statements in accordance with the introduction of XBRL to the EDINET disclosure platform. The amounts for “Changes in the scope of consolidation” and “Changes in the scope of equity method” for the fi scal year ended March 31, 2008 were 1,056 million yen and negative 5,483 million yen, respectively.

_____ Consolidated statements of cash fl ows In accordance with the amendment of the Enforcement Regulations of the Insurance Business Law of Japan, the increase in reserve for retirement benefi ts for directors and corporate auditors that was included in “Increase in reserve for retirement benefi ts” for the year ended March 31, 2007 is presented as “Increase in reserve for retirement benefi ts for directors and corporate auditors” for the year ended March 31, 2008.

05 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 65 PERFORMANCE05

Notes to Consolidated Balance Sheets

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

*1 Accumulated depreciation of tangible fi xed assets is 362,697 million yen and *1 Accumulated depreciation of tangible fi xed assets is 354,952 million yen and advanced depreciation of such assets is 23,969 million yen. advanced depreciation of such assets is 24,613 million yen. The advanced depreciation of 9 million yen was deducted from the acquisition costs for the tangible fi xed assets acquired using government and other subsidies during the year ended March 31, 2008.

*2 Securities of non-consolidated subsidiaries and afﬁ liates, etc. are provided as *2 Securities of non-consolidated subsidiaries and afﬁ liates, etc. are provided as follows: follows: (Yen in millions) (Yen in millions) Securities (equity) 54,395 Securities (equity) 92,356 Securities (partnership) 29,433 Securities (partnership) 30,824

*3 Of loans, the total amount of loans to borrowers in bankruptcy, past due *3 Of loans, the total amount of loans to borrowers in bankruptcy, past due loans, loans contractually past due for three months or more, and restructured loans, loans contractually past due for three months or more, and restructured loans is 13,831 million yen. The breakdown is as set forth below. loans is 11,225 million yen. The breakdown is as set forth below.

(1) The amount of loans to borrowers in bankruptcy is 2,853 million yen. (1) The amount of loans to borrowers in bankruptcy is 767 million yen. Loans that are past due for a certain period, or for other reasons, are generally Loans that are past due for a certain period, or for other reasons, are generally placed on non-accrual status when substantial doubt is considered to exist as placed on non-accrual status when substantial doubt is considered to exist as to the ultimate collectibility either of principal or interest (“Non-accrual status to the ultimate collectibility either of principal or interest (“Non-accrual status loans”; any part of bad debt written-off is excluded). Loans to borrowers loans”; any part of bad debt written-off is excluded.). Loans to borrowers in bankruptcy represent non-accrual loans after a partial charge-off of in bankruptcy represent non-accrual loans after a partial charge-off of claims deemed uncollectible, which are deﬁ ned in Article 96, paragraph 1, claims deemed uncollectible, which are deﬁ ned in Article 96, paragraph 1, subparagraph 3 (a) to (e) (maximum amount transferable to reserve for bad subparagraph 3 (a) to (e) and subparagraph 4 of the Enforcement Ordinance of debts) and subparagraph 4 of the Enforcement Ordinance of the Corporation the Corporation Tax Law (Ordinance No. 97, 1965). Tax Law (Ordinance No. 97, 1965).

(2) The amount of past due loans is 5,465 million yen. (2) The amount of past due loans is 5,940 million yen. Past due loans are non-accrual status loans, other than loans to borrowers in Past due loans are non-accrual status loans, other than loans to borrowers in legal bankruptcy and loans on which interest payments are deferred in order legal bankruptcy and loans on which interest payments are deferred in order to to assist business restructuring or ﬁ nancial recovery of the borrowers. assist business restructuring or ﬁ nancial recovery of the borrowers.

(3) The amount of loans contractually past due for three months or more is 107 (3) There are no loans contractually past due for three months or more. million yen. Loans contractually past due for three months or more are defi ned as loans Loans contractually past due for three months or more are defi ned as loans on which any principal or interests payments are delayed for three months on which any principal or interests payments are delayed for three months or more from the date following the due date. Loans classifi ed as loans to or more from the date following the due date. Loans classifi ed as loans to borrowers in bankruptcy and past due loans are excluded. borrowers in bankruptcy and past due loans are excluded.

(4) The amount of restructured loans is 5,405 million yen. (4) The amount of restructured loans is 4,517 million yen. Restructured loans are loans on which concessions (e.g. reduction of the Restructured loans are loans on which concessions (e.g. reduction of the stated stated interest rate, deferral of interest payment, extension of the maturity interest rate, deferral of interest payment, extension of the maturity date, date, forgiveness of debt) are granted to borrowers in fi nancial diffi culties to forgiveness of debt) are granted to borrowers in fi nancial diffi culties to assist assist them in their corporate restructuring or fi nancial recovery by improving them in their corporate restructuring or fi nancial recovery by improving their their ability to repay creditors. Restructured loans do not include loans ability to repay creditors. Restructured loans do not include loans classifi ed as classifi ed as loans to borrowers in bankruptcy, past due loans or loans past loans to borrowers in bankruptcy, past due loans or loans past due for three due for three months or more. months or more.

*4 The value of assets pledged as collateral totals 330,405 million yen in *4 The value of assets pledged as collateral totals 387,607 million yen in securities, 9,125 million yen in deposits, 375 million yen in land, 1,327 million securities, 33,081 million yen in deposits and savings and 60 million yen in yen in buildings. Collateralized debt obligations are held to the value of other assets. Collateralized debt obligations are held to the value of 59,995 65,233 million yen in outstanding claims, 51,724 million yen in underwriting million yen in outstanding claims, 61,809 million yen in underwriting reserve, reserve and 59,334 million yen in other debts. 29,363 million yen in corporate bonds and 66,259 million yen in other debts.

5 Securities received from security borrowing transactions are 75,343 million yen 5 Securities received from security borrowing transactions are 107,854 million at market value. yen at market value.

*6 Securities include securities lent under loan agreements of 595,987 million *6 Securities include securities lent under loan agreements of 1,540,899 million yen. yen. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 66 Tokio Marine Holdings, Inc. 2009 Annual Report Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

*7 The outstanding balance of undrawn committed loans is as follows: *7 The outstanding balance of undrawn committed loans is as follows: (Yen in millions) (Yen in millions) Total loan commitments 101,127 Total loan commitments 127,420 Balance of drawn committed loans 16,019 Balance of drawn committed loans 16,486 Undrawn loan commitments 85,108 Undrawn loan commitments 110,934

8 The amount of both assets and liabilities for separate account as prescribed in 8 The amount of both assets and liabilities for separate account as prescribed in Article 118 of the Insurance Business Law totals 1,876,816 million yen. Article 118 of the Insurance Business Law totals 1,967,195 million yen.

*9 Tokio Marine & Nichido guarantees the liabilities of some of its subsidiaries. The *9 Tokio Marine & Nichido guarantees the liabilities of some of its subsidiaries. The balance of the guarantees to its subsidiaries as of March 31, 2009 is as follows: balance of the guarantees to its subsidiaries as of March 31, 2008 is as follows: (Yen in millions) (Yen in millions) TNUS Insurance Company 22 TNUS Insurance Company 870 Tokio Marine Compania de Seguros, S.A. de C.V. 4,880 Tokio Marine Compania de Seguros, S.A. de C.V. 4,727 Tokio Marine Paciﬁ c Insurance Limited 1,876 Tokio Marine Paciﬁ c Insurance Limited 1,818 The Tokio Marine & Nichido Fire Insurance Total 7,416 6,088 Company (China) Limited Total 12,868

Notes to Consolidated Statements of Income

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

*1 Major components of business expenses *1 Major components of business expenses (Yen in millions) (Yen in millions) Agency commissions, etc. 397,387 Agency commissions, etc. 397,020 Salaries 207,980 Salaries 202,185

Business expenses consist of “Loss adjustment expenses”, “Operating and Business expenses consist of “Loss adjustment expenses”, “Operating and general administrative expenses” and “Agency commissions and brokerage” as general administrative expenses” and “Agency commissions and brokerage” as shown in the accompanying consolidated statements of income. shown in the accompanying consolidated statements of income.

*2 In accordance with Paragraph 9 of the “Implementation Guidelines for Equity _____ Method Accounting” (Accounting Practice Committee, Report No.9) and Paragraph 32, Subparagraph 1 of the “Implementation Guidelines for Capital Consolidation in Consolidated Financial Statements” (Accounting Practice Committee, Report No.7), the depreciation amount of 1,892 million yen on goodwill in connection with Sino Life Insurance Co., Ltd. is included in “Equity in losses of afﬁ liates.

*3 The main component of “other extraordinary gains” is gains on sales of shares *3 The main components of other extraordinary gains are 26,151 million yen of afﬁ liates amounting to 14,275 million yen. resulting from the transfer of a portion of the corporate pension fund to a deﬁ ned-contribution pension plan and 1,777 million yen resulting from 05 correction of income in previous period related to hedge accounting. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 67 PERFORMANCE05

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

*4 The Company recognized impairment losses on the following properties *4 The Company recognized impairment losses on the following properties during the year ended March 31, 2009. during the year ended March 31, 2008.

Impairment loss (Yen in millions) Impairment loss (Yen in millions) Purpose of use Category Location Purpose of use Category Location Land Building Others Total Land Building Others Total Properties Land and 10 properties Properties Land and 2 properties for business buildings including a for rent buildings including a use (deriva- building in building in 40 62 — 103 tive business Yokohama 222 1,956 365 2,544 Imabari City, and elderly City, Ehime Pref. care busi- Kanagawa Idle or Land and 46 properties ness) Pref. potential buildings including a Properties Land and A property in disposal building in 1,870 924 47 2,842 for rent buildings Iwaki City, properties Utsunomiya 22 71 — 93 Fukushima City, Tochigi Pref. Pref. 55 properties Others Goodwill — — — 5,707 5,707 Idle or including a potential dis- Land and Total — — 1,911 987 5,755 8,654 building in 1,313 419 1,050 2,784 posal proper- buildings Kashiwa City, ties Chiba Pref. Others Goodwill — — —1,890 1,890 Total —— 1,558 2,447 3,307 7,313

(1) Properties, etc. (1) Properties, etc. Properties are classifi ed as follows: (a) properties for business use used for Properties are classifi ed as follows: (a) properties used for insurance businesses insurance business and other businesses are grouped by each business unit are grouped as a whole and (b) other properties including properties for rent and (b) other properties including properties for rent, idle or potential disposal and idle or potential disposal properties are classifi ed on an individual basis. properties and properties such as properties business use used for elderly care As to properties for rent and idle or potential disposal properties that business are grouped on an individual basis. depreciated in value mainly due to the fall in the real estate market, the The total amount of projected future cash fl ow generated from the Company wrote off the excess of the carrying values of such properties over derivative business and the elderly care business fell below the book values of the recoverable values and recognized any such write off as an impairment the properties used for these businesses. Consequently, the Company wrote loss, in extraordinary item. off the excess of the book values of such properties over the recoverable values The Company determined the recoverable value of a property by selecting and recognized such write-offs as impairment losses in extraordinary losses. the higher of the net sale price or the utility value. The net sale prices were The Company calculated the recoverable value of the relevant property by calculated as the assessed values established by a real estate-appraiser, minus discounting projected future cash fl ows at a rate of 1.4% to 6.0%. the anticipated expenses for disposing of the relevant properties. The utility Due mainly to decline in the real estate market, book values of some values were calculated by discounting the future cash fl ows to net present properties for rent and idle or potential disposal properties fell below the values at a rate of 8.7% to 8.8%. recoverable values. Consequently, the Company wrote off the excess of the (2) Goodwill book values of such properties over the recoverable values and recognized any With respect to the goodwill relating to Real Seguros S.A., an impairment loss such write-off as impairment losses in extraordinary losses. of 5,707 million yen was recognized and recorded as ”extraordinary losses” for Recoverable values are either the higher of the net sales price or the utility the year ended March 31, 2008, since the profi t projected in the business plan values of each property. Net sales price is the market value assessed by real at the time of the acquisition of shares of Real Seguros S.A. has been deemed estate appraisers minus anticipated expenses for disposal of the relevant to be not achievable. properties. The utility values were calculated by discounting the future cash In addition, with respect to the amount of goodwill that relates to Tianan fl ows to net present values at a rate of 7.7%. Insurance Company Limited, an impairment loss of 2,140 million yen was (2) Goodwill recognized and recorded as “equity in losses of affi liates” in “Other ordinary With respect to the goodwill relating to Tokio Marine Seguradora S.A., expenses” for the year ended March 31, 2008. an impairment loss of 1,890 million yen was recognized and recorded as “extraordinary losses” for the year ended March 31, 2009, since the Company concluded that Tokio Marine Seguradora S.A. would not achieve the initially expected levels of profi t.

*5 The main components of other extraordinary losses are 7,668 million yen of “Impairment losses in debt securities issued by subsidiaries” and 3,139 million yen of “Losses on redemption of debt securities issued by subsidiaries.” WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 68 Tokio Marine Holdings, Inc. 2009 Annual Report Notes to Consolidated Statements of Changes in Shareholders’ Equity Year ended March 31, 2009 (April 1, 2008–March 31, 2009) 1. Class and number of issued shares and treasury stock

(Unit: thousand shares) Increase during Decrease during Number of shares as Number of shares as the year ended the year ended of March 31, 2008 of March 31, 2009 March 31, 2009 March 31, 2009 Issued shares Common stock 804,524 — — 804,524 Total 804,524 — — 804,524 Treasury stock Common stock 2,293 14,772 104 16,961 Total 2,293 14,772 104 16,961 1. The increase of 14,772 thousand shares of treasury stock is attributable to an acquisition of 14,682 thousand shares to implement financial policies. 2. The decrease of 104 thousand shares of treasury stock is attributable to a decrease of 75 thousands shares due to share distribution in accordance with an exercise of stock acquisition rights.

2. Stock acquisition rights (including those owned by the Company)

Category Nature of stock acquisition rights Amount as of March 31, 2009 (yen in millions) The Company (parent company) Stock acquisition rights as stock options 849

3.Dividends (1) Amount of dividends

Amount of dividends Resolution Class of stock Dividends per share Record date Effective date paid

Ordinary general meeting of shareholders held on 24,066 Common stock 30 yen March 31, 2008 June 24, 2008 June 23, 2008 million yen

Meeting of the board of directors held on 19,101 September 30, December 10, Common stock 24 yen November 19, 2008 million yen 2008 2008

(2) Dividends of which the record date falls within the year ended March 31, 2009, and the effective date falls after March 31, 2009.

Amount of Dividends Resolution Class of stock Source of dividends Record date Effective date dividends paid per share Ordinary general meeting of shareholders held 18,901 Retained Common stock 24 yen March 31, 2009 June 30, 2009 on June 29, 2009 million yen earnings

05 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 69 PERFORMANCE05

Year ended March 31, 2008 (April 1, 2007–March 31, 2008) 1. Class and number of issued shares and treasury stock

(Unit: thousand shares) Increase during Decrease during Number of shares as Number of shares as the year ended the year ended of March 31, 2007 of March 31, 2008 March 31, 2008 March 31, 2008 Issued shares Common stock 824,524 — 20,000 804,524 Total 824,524 — 20,000 804,524 Treasury stock Common stock 1,187 21,175 20,069 2,293 Total 1,187 21,175 20,069 2,293 1. The decrease of 20,000 thousand shares is attributable to a cancellation of shares of treasury stock. 2. The increase of 21,175 thousand shares of treasury stock is attributable to an acquisition of 21,074 thousand shares to implement financial policies. 3. The decrease of 20,069 thousand shares of treasury stock is attributable to a cancellation of shares, decreasing treasury stock by 20,000 thousand.

2. Stock acquisition rights (including those owned by the Company)

Category Nature of stock acquisition rights Amount as of March 31, 2008 (yen in millions) The Company (parent company) Stock acquisition rights as stock options 619

3. Dividends (1) Amount of dividends

Amount of dividends Resolution Class of stock Dividends per share Record date Effective date paid Ordinary general meeting of shareholders held on Common stock 17,290 million yen 21 yen March 31, 2007 June 26, 2007 June 25, 2007 Meeting of the board of directors held on September 30, December 10, Common stock 14,674 million yen 18 yen November 20, 2007 2007 2007

(2) Dividends of which the record date falls within the year ended March 31, 2008, and the effective date falls after March 31, 2008.

Amount of Dividends Resolution Class of stock Source of dividends Record date Effective date dividends paid per share Ordinary general meeting of shareholders held on 24,066 Retained Common stock 30 yen March 31, 2008 June 24, 2008 June 23, 2008 million yen earnings WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 70 Tokio Marine Holdings, Inc. 2009 Annual Report Notes for Consolidated Statements of Cash Flows

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

*1 Reconciliation of cash and cash equivalents at the end of the year to the *1 Reconciliation of cash and cash equivalents at the end of the year to the amounts disclosed in the consolidated balance sheets is provided as follows: amounts disclosed in the consolidated balance sheets is provided as follows: (As of March 31, 2009) (Yen in millions) (As of March 31, 2008) (Yen in millions) Cash and deposits 461,589 Cash and deposits 794,528 Call loans 352,576 Call loans 199,725 Monetary receivables bought 458,556 Monetary receivables bought 1,712,207 Securities 10,695,095 Securities 12,138,621 Time deposits with initial term over three months Time deposits with initial term over three months (63,560) (120,718) to maturity to maturity Monetary receivables bought not included in cash Monetary receivables bought not included in cash (342,345) (639,661) equivalents equivalents Securities not included in cash equivalents (10,684,358) Securities not included in cash equivalents (12,096,006) Cash and cash equivalents 877,551 Cash and cash equivalents 1,988,696

2 (No change) 2 Cash ﬂ ows from investing activities include cash ﬂ ows arising from asset management relating to the insurance business.

*3 Breakdown of assets and liabilities of newly consolidated subsidiaries *3 Breakdown of assets and liabilities of newly consolidated subsidiaries The breakdown of assets and liabilities of newly consolidated subsidiary, The breakdown of assets and liabilities of newly consolidated subsidiary, Kiln Philadelphia Consolidated Holding Corp. at the commencement of the Ltd at the commencement of the consolidation is as follows. The following also consolidation is as follows. The following also shows the acquisition cost of shows the acquisition cost of the shares of Kiln Ltd and amounts paid (net) for the shares of Philadelphia Consolidated Holding Corp. and amounts paid (net) the acquisition of such shares. for the acquisition of such shares. (Yen in millions) (Yen in millions) Assets 207,439 Assets 511,852 (Securities) 79,167 (Securities) 225,405 Goodwill 29,596 Goodwill 253,611 Liabilities (142,914) Liabilities (291,926) (Underwriting funds) (82,746) (Underwriting funds) (226,859) Acquisition cost of Kiln Ltd shares 94,122 Acquisition cost of Philadelphia Consolidated Holding 473,537 Cash and cash equivalents of Kiln Ltd (52,199) Corp. shares Net amounts paid for the acquisition of Kiln Ltd shares 41,922 Cash and cash equivalents of Philadelphia Consolidated (6,377) Holding Corp. Net amounts paid for the acquisition of Philadelphia 467,160 Consolidated Holding Corp. shares

05 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 71 PERFORMANCE05

Lease Transactions

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

1. Finance Lease Transactions 1. Finance lease other than those in which ownership of leased property is The transactions of ownership non-transferable ﬁ nance lease which are deemed to be transferred to the lessees accounted under the accounting policy similar to that applicable to normal lease transaction.

q Acquisition cost, accumulated depreciation, accumulated impairment losses q Acquisition cost, accumulated depreciation, accumulated impairment losses and net book value of leased assets; and net book value of leased assets; (Yen in millions) (Yen in millions)

Accumulated Accumulated Accumulated Acquisition cost impairment Net book value Acquisition cost Net book value depreciation depreciation losses Tangible ﬁ xed 5,058 2,888 50 2,120 Movables 5,917 3,531 2,386 assets

(No change) Acquisition cost includes interest payable thereon because the balance of future lease payment accounts for a small portion of the balance of tangible ﬁ xed assets.

w Balance of future lease payments; w Balance of future lease payments; (Yen in millions) (Yen in millions) Due within one year 842 Due within one year 1,170 Due after one year 1,328 Due after one year 1,215 Total 2,170 Total 2,386

Balance of impairment losses on lease assets: 50 million yen

(No change) Future lease payment includes interest payable thereon because the balance of future lease payment accounts for a small portion of the balance of tangible ﬁ xed assets.

e Lease payment, reversal of impairment loss on leased assets, depreciation e Lease payment, reversal of impairment loss on leased assets, depreciation equivalent and impairment losses; equivalent and impairment losses; (Yen in millions) (Yen in millions) Lease payment 1,254 Lease payment 1,473 Reversal of impairment losses on lease assets — Depreciation equivalent 1,473 Depreciation equivalent 1,254 Impairment losses 50

r Computation of depreciation equivalent; r Computation of depreciation equivalent; (No change) Depreciation equivalent is determined on the straight-line method over the lease period, with no residual value.

2. Operating lease 2. Operating lease Future lease payments related to non-cancelable operating leases Future lease payments (Yen in millions) (Yen in millions) Due within one year 2,140 Due within one year 1,041 Due after one year 5,473 Due after one year 4,527 Total 7,614 Total 5,568

(Impairment losses) There is no impairment loss allocated to the leased assets. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 72 Tokio Marine Holdings, Inc. 2009 Annual Report Securities 1. Trading securities

(Yen in millions) As of March 31, 2009 As of March 31, 2008

Type Valuation gains (losses) Valuation gains (losses) Fair value on balance sheets Fair value on balance sheets included in earnings included in earnings

Trading securities 2,121,901 (490,413) 2,216,467 (70,022) (Note)

As of March 31, 2009 As of March 31, 2008

As of March 31, 2009, the above ﬁ gures include amounts related to foreign As of March 31, 2008, the above ﬁ gures include amounts related to mortgage securities (carrying amount 1,659 million yen and valuation losses commercial papers (carrying amount 172 million yen and valuation losses recognized on statements of income negative 90 million yen), which are recognized on statements of income 0 million yen), which are presented as presented as “Monetary receivables bought” on the consolidated balance “Monetary receivables bought” on the consolidated balance sheets. sheets.

2. Bonds held to maturity with fair value

(Yen in millions) As of March 31, 2009 As of March 31, 2008

Type Cost shown on Cost shown on Fair value Difference Fair value Difference balance sheets balance sheets Public and corporate bonds 980,575 1,028,261 47,685 751,953 785,441 33,487 Gross unrealized (Domestic) gains Foreign securities 12,949 13,267 318 12,180 12,287 107 Subtotal 993,524 1,041,528 48,003 764,133 797,728 33,594 Public and corporate bonds 456,180 434,756 (21,423) 492,741 450,451 (42,290) Gross unrealized (Domestic) losses Foreign securities 12,343 11,917 (426) 19,239 18,819 (419) Subtotal 468,524 446,674 (21,849) 511,980 469,270 (42,709) Total 1,462,048 1,488,202 26,153 1,276,114 1,266,998 (9,115)

3. Bonds earmarked for policy reserve with fair value

(Yen in millions) As of March 31, 2009 As of March 31, 2008

Type Cost shown on Cost shown on Fair value Difference Fair value Difference balance sheets balance sheets Public and corporate bonds 94,707 97,926 3,218 73,001 76,078 3,077 Gross unrealized (Domestic) gains Foreign securities 216,228 232,272 16,044 208,967 222,631 13,664 05 Subtotal 310,936 330,198 19,262 281,968 298,710 16,741 Public and corporate bonds 8,302 8,231 (70) 3,974 3,953 (21) Gross unrealized (Domestic) losses Foreign securities 2,956 2,930 (26) 2,984 2,910 (73) Subtotal 11,258 11,161 (97) 6,958 6,864 (94) Total 322,195 341,360 19,165 288,927 305,574 16,647 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 73 PERFORMANCE05

4. Other securities (available for sale) with fair value

(Yen in millions) As of March 31, 2009 As of March 31, 2008

Type Fair value shown Fair vale shown Cost Difference Cost Difference on balance sheets on balance sheets Public and corporate bonds 2,447,355 2,528,468 81,113 2,286,053 2,348,538 62,484 (Domestic) Carrying value Stock (Domestic) 876,891 1,838,527 961,635 1,084,620 3,270,604 2,185,983 which exceeds the original cost Foreign securities 293,294 327,022 33,728 526,403 597,711 71,307 Other (Note 1) 15,334 17,755 2,420 71,904 83,140 11,236 Sub-total 3,632,876 4,711,773 1,078,897 3,968,982 6,299,994 2,331,012 Public and corporate bonds 768,403 749,213 (19,190) 809,829 786,729 (23,100) Carrying value (Domestic) which does Stock (Domestic) 244,750 210,767 (33,983) 157,412 140,724 (16,687) not exceed the Foreign securities 730,253 685,547 (44,706) 759,101 706,697 (52,403) original cost Other (Note 2) 314,638 281,581 (33,056) 287,516 248,019 (39,497) Sub-total 2,058,046 1,927,109 (130,937) 2,013,860 1,882,171 (131,689) Total 5,690,922 6,638,883 947,960 5,982,842 8,182,165 2,199,323

(Notes) As of March 31, 2009 As of March 31, 2008

1. “Other” includes foreign mortgage-backed securities (original cost 7,232 1. ”Other” includes foreign mortgage-backed securities (original cost 42,969 million yen, amount shown on the consolidated balance sheets 7,401 million million yen, amount shown on the consolidated balance sheets 45,720 million yen, difference 169 million yen) which are presented as monetary receivables yen, difference 2,750 million yen) which are presented as monetary receivables bought on the consolidated balance sheets. bought on the consolidated balance sheets.

2. “Other” includes foreign mortgage-backed securities (original cost 277,434 2. ”Other” includes foreign mortgage-backed securities (original cost 214,098 million yen; amount shown on the consolidated balance sheets, 248,216 million yen; amount shown on the consolidated balance sheets, 180,930 million yen; difference (-) 29,218 million yen) which are presented as monetary million yen; difference (-) 33,168 million yen) which are presented as monetary receivables bought on the consolidated balance sheets. receivables bought on the consolidated balance sheets.

3. Impairment losses amounting to 188,098 million yen were recognized 3. Impairment losses amounting to 32,378 million yen were recognized for for “Other securities” with fair value. This includes the impairment loss in “Other securities” with fair value. Impairment losses are in principle recognized connection with foreign mortgage securities in the amount of 38,436 million on securities for which fair values have declined 30% or more versus their yen, which is included in “Other investment expenses” in the consolidated book values at the end of the period. statements of income. Impairment losses are in principle recognized on securities for which fair values have declined 30% or more versus their book values at the end of the period.

5. Bonds held to maturity with fair value that were sold None.

6. Bonds earmarked for policy reserve that were sold

(Yen in millions) Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008) Type Sale proceeds Total gains on sale Total of losses on sale Sale proceeds Total gains on sale Total losses on sale Bonds earmarked for policy reserve 10,349 125 300 13,787 934 16

7. Other securities (available for sale) that were sold

(Yen in millions) Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008) Type Sale proceeds Total gains on sale Total losses on sale Sale proceeds Total gains on sale Total losses on sale Other securities 1,464,810 71,579 33,437 1,521,938 58,037 15,861 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 74 Tokio Marine Holdings, Inc. 2009 Annual Report (Notes)

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

The above fi gures include amounts related to negotiable certifi cates of deposit The above fi gures include amounts related to foreign mortgage securities, etc. (sale value: 394 million yen; profi t on sale: 0 million yen; loss on sale: 0 million (sale value, 228,141 million yen; profi t on sale, 58 million yen; loss on sale, 1,447 yen), which are presented as “Cash and bank deposits,” and commercial papers, million yen), which are presented as “Monetary receivables bought” on the etc. (sale value: 45,197 million yen; profi t on sale: 11 million yen; loss on sale: consolidated balance sheets. 372 million yen), which are presented as “Monetary receivables bought” on the consolidated balance sheets.

8. Major securities not stated at fair value (1) Bonds held to maturity None.

(2) Bonds earmarked for policy reserve None.

(3) Other securities

(Yen in millions) Type As of March 31, 2009 As of March 31, 2008 Public and corporate bonds (Domestic) 0 0 Stock (Domestic) 209,044 163,749 Foreign securities 89,166 89,078 Other 252,702 1,558,061 (Notes)

As of March 31, 2009 As of March 31, 2008

“Other” includes negotiable certiﬁ cates of deposit (52,340 million yen), which “Other” includes negotiable certiﬁ cates of deposit (116,840 million yen), are presented as “Cash and bank deposits” and commercial papers, etc. which are presented as “Cash and bank deposits” and commercial papers, (175,057 million yen), which are presented as “Monetary receivables bought” etc. (1,415,460 million yen), which are presented as “Monetary receivables on the consolidated balance sheets. bought” on the consolidated balance sheets.

9. Change in the purpose of holding None.

10. Maturity schedule of other securities with maturity, bonds held to maturity and bonds earmarked for policy reserve

(Yen in millions) As of March 31, 2009 As of March 31, 2008 Type Within one year Over 1 to 5 years Over 5 to 10 years Over 10 years Within one year Over 1 to 5 years Over 5 to 10 years Over 10 years Government bonds (Domestic) 272,093 371,370 851,847 2,363,999 235,308 435,145 748,421 1,950,228 Municipal bonds (Domestic) 6,395 55,557 120,711 — 9,222 52,715 133,621 — 05 Corporate bonds (Domestic) 102,946 425,514 181,634 65,376 194,918 428,213 213,030 56,111 Stock (Domestic) 100 — — — — 100 — — Foreign securities 177,717 438,152 251,560 140,934 377,375 535,651 243,885 43,247 Other 236,261 35,038 46,768 166,599 1,536,712 48,750 41,548 138,073 Total 795,514 1,325,633 1,452,522 2,736,909 2,353,537 1,500,577 1,380,507 2,187,661 (Notes)

As of March 31, 2009 As of March 31, 2008

“Other” includes negotiable certiﬁ cates of deposit (51,142 million yen for “Other” includes negotiable certiﬁ cates of deposit (114,616 million yen for within one year, 1,197 million yen for 1 to 5 years), which are presented as within one year, 1,534 million yen for 1 to 5 years, 690 million yen for 5 to “Cash and bank deposits,” and commercial papers, etc. (184,871 million yen 10 years), which are presented as “Cash and bank deposits,” and commercial for within one year, 32,743 million yen for 1 to 5 years, 46,461 million yen papers, etc. (1,418,789 million yen for within one year, 44,830 million yen for for 5 to 10 years, 166,599 million yen for over ten years), which are presented 1 to 5 years, 40,418 million yen for 5 to 10 years, 138,073 million yen for over as “Monetary receivables bought” respectively on the consolidated balance ten years), which are presented as “Monetary receivables bought” respectively sheets. on the consolidated balance sheets. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 75 PERFORMANCE05

Money Trusts 1. Money trusts held for trading purposes

(Yen in millions) As of March 31, 2009 As of March 31, 2008

Valuation gains (losses) Valuation gains (losses) Item Carrying amount Carrying amount included in earnings included in earnings Money trust 7,493 (593) 34,028 (729)

2. Money trusts held to maturity None.

3. Money trusts other than those held to maturity or those held for trading purposes

As of March 31, 2009 As of March 31, 2008

1. There are no individually managed money trusts valued at market value. 1. There are no individually managed money trusts valued at market value.

2. Jointly managed money trust is included in the balance sheets at the acquisition 2. Jointly managed money trust is included in the balance sheets at the cost of 1,195 million yen. acquisition cost of 5,186 million yen.

Derivative Transactions

1. Details of transactions

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

(1) Types of transactions (1) Types of transactions Consolidated subsidiaries are mainly engaged in the following derivative Consolidated subsidiaries are mainly engaged in the following derivative transactions; transactions;

a. Currency-related transactions: Forward contracts, currency swaps, currency a. Currency-related transactions: Forward contracts, currency swaps, currency options, etc. options, etc.

b. Interest rate-related transactions: Interest rate futures, interest rate options, b. Interest rate-related transactions: Interest rate futures, interest rate options, interest rate swaps, etc. interest rate swaps, interest rate swaptions, etc.

c. Equity-related transactions: Equity index futures, equity index options, etc. c. Equity-related transactions: Equity index futures, equity index options, etc.

d. Bond-related transactions: Bond futures, etc. d. Bond-related transactions: Bond futures, over-the-counter bond options, etc.

e. Other transactions: Credit derivatives e. Other transactions: Credit derivatives

(2) Objectives and policies of transactions (2) Objectives and policies of transactions The main purposes of the derivative transactions are as follows. The main purposes of the derivative transactions are as follows.

a. Risk management related to assets and liabilities: a. Risk management related to assets and liabilities held by the Millea (No change) Holdings’ consolidated subsidiaries: In order to adequately manage risks related to assets and liabilities held by the consolidated subsidiaries (ALM: Asset Liability Management) and reduce losses arising from the future ﬂ uctuations in interest rates, exchange rates and stock prices.

b. Investment activities: b. Investment activities: (No change) The Company engages in various derivative transactions in order to maximize interest gains within a certain risk limit.

c. Response to customer needs: c. Response to customer needs: (No change) The Company carries out derivative transactions in order to provide a wide range of ﬁ nancial instruments that meet customers’ hedging needs as well as their diverse and complex investment/funding style. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 76 Tokio Marine Holdings, Inc. 2009 Annual Report Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

The actual transactions are carried out in accordance with the “Investment The actual transactions are carried out in accordance with the “Investment Guidelines” under which types of fi nancial instruments, specifi c risk limits, and Guidelines” under which types of fi nancial instruments, specifi c risk limits, actions taken against any losses incurred arising from such transactions, etc. and actions taken against any losses arising from such transactions, etc. are are classifi ed and prescribed according to each investment style. classifi ed and prescribed according to each investment style.

Accounting policies for signifi cant hedging activities are as follows: Accounting policies for signifi cant hedging activities are as follows: q Interest rate q Interest rate To mitigate interest rate fl uctuation risks associated with long-term insurance To mitigate interest rate fl uctuation risks associated with long-term insurance policies, Tokio Marine & Nichido and Tokio Marine & Nichido Life implement policies, Tokio Marine & Nichido and Tokio Marine & Nichido Life implement the Asset Liability Management designed to manage such risks by evaluating the Asset Liability Management designed to manage such risks by evaluating and analyzing fi nancial assets and insurance liabilities simultaneously. and analyzing fi nancial assets and insurance liabilities simultaneously.

As for some of interest rate swap transactions that are utilized to manage As for some of interest rate swap transactions that are utilized to manage such risks, Tokio Marine & Nichido and Tokio Marine & Nichido Life have such risks, Tokio Marine & Nichido and Tokio Marine & Nichido Life have applied deferral hedge treatment and evaluated hedge effectiveness based applied deferral hedge treatment and evaluated hedge effectiveness based upon the Industry Audit Committee Report No. 26, “Accounting and Auditing upon the Industry Audit Committee Report No. 26, “Accounting and Auditing Treatments related to Adoption of Accounting for Financial Instruments in Treatments related to Adoption of Accounting for Financial Instruments in the Insurance Industry” (issued by the Japanese Institute of Certifi ed Public the Insurance Industry” (issued by the Japanese Institute of Certifi ed Public Accountant (“JICPA”) on September 3, 2002—hereinafter called “Report No. Accountant (“JICPA”) on September 3, 2002—hereinafter called “Report No. 26”). 26”). Hedge effectiveness is evaluated by examining the interest rate conditions Hedge effectiveness is evaluated by examining the interest rate conditions which affect calculation of theoretical value of both the hedged items and the which affect calculation of theoretical value of both the hedged items and the hedging instruments. As for any deferred hedge gains based on the Industry hedging instruments. As for any deferred hedge gains based on the Industry Audit Committee’s Report No.16, “Accounting and Auditing Treatments Audit Committee’s Report No.16, “Accounting and Auditing Treatments related to Adoption of Accounting for Financial Instruments in the Insurance related to Adoption of Accounting for Financial Instruments in the Insurance Industry” (issued by the JICPA, on March 31, 2000) prior to application of the Industry” (issued by the JICPA, on March 31, 2000) prior to application of the Report No. 26, Tokio Marine & Nichido has amortized such deferred hedge Report No. 26, Tokio Marine & Nichido has amortized such deferred hedge gains as of the end of March 2003 over the remaining period of hedging gains as of the end of March 2003 over the remaining period of hedging instruments (1-17 years) by using the straight-line method, and Tokio Marine instruments (1–17 years) by using the straight-line method, and Tokio Marine & Nichido Life has amortized deferred hedge gains as of the end of March & Nichido Life has amortized deferred hedge gains as of the end of March 2002 over the remaining period of hedging instruments (6-10 years) by using 2002 over the remaining period of hedging instruments (6–10 years) by using the straight-line method, respectively, in accordance with the transitional the straight-line method, respectively, in accordance with the transitional measures in the Report No. 26. The amount of deferred hedge gains under measures in the Report No. 26. The amount of deferred hedge gains under this transitional treatment as of March 31, 2009 is 35,922 million yen and the this transitional treatment as of March 31, 2008 is 47,576 million yen and the amount allocated to gains or losses for the fiscal year ended March 31, 2009 is amount allocated to gains or losses for the fi scal year ended March 31, 2008 is 11,654 million yen. 14,434 million yen. In addition, Tokio Marine & Nichido applies the deferred hedge accounting In addition, Tokio Marine & Nichido applies the deferred hedge accounting for interest rate swap transactions which are used to hedge the interest rate for interest rate swap transactions which are used to hedge the interest rate risk related to bonds issued by Tokio Marine & Nichido. Hedge effectiveness is risk related to bonds issued by Tokio Marine & Nichido. Hedge effectiveness is not evaluated since the critical terms of hedged items and hedging instruments not evaluated since the critical terms of hedged items and hedging instruments are same and thus believed to be highly hedge effective. are same and thus believed to be highly hedge effective. w Foreign exchange w Foreign exchange With regard to some currency swap and forward contract transactions, which With regard to some currency swap and forward contract transactions, which are utilized to reduce the future foreign exchange risk associated with assets are utilized to reduce the future foreign exchange risk associated with assets denominated in foreign currencies, Tokio Marine & Nichido applies deferred denominated in foreign currencies, Tokio Marine & Nichido applies deferred 05 hedge accounting and/or fair value hedge accounting. Nisshin Fire also applies hedge accounting and/or fair value hedge accounting and/or matching matching treatment. The effectiveness of hedging treatments is evaluated by treatment. Nisshin Fire also applies deferred hedge accounting and matching assessing the price fl uctuation of both hedging instruments and hedged items. treatment. As for deferred hedge accounting and fair value hedge accounting, However, hedge effectiveness is not evaluated, since critical terms of hedged hedge effectiveness is not evaluated, since critical terms of hedging items and hedging instruments are the same and thus believed to be highly instruments and hedged items are the same and thus believed to be highly effective. hedge effective. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 77 PERFORMANCE05

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

(3) Details of risks related derivative transactions (3) Details of risks related derivative transactions (No change) Derivative transactions involve market risks and credit risks. Market risks include risks that the consolidated subsidiaries may incur losses arising from future fl uctuation in prices of the relevant fi nancial instruments (interest rates, exchange rates and stock prices). Major consolidated subsidiaries have established risk management systems, under which such consolidated subsidiaries comprehensively manage risks relating to derivative transactions as well as assets and liabilities, and quantify such market risks by way of VaR method, etc. Credit risks include risks that such consolidated subsidiaries may incur losses when their counter-parties in derivative transactions fail to perform obligations set forth in the initial agreements due to insolvency or otherwise, other than any losses arising from deterioration of the credit standing of trade reference stated in credit derivative agreements, etc. Major consolidated subsidiaries manage such credit risks by periodically computing credit risks based on market values. If such counter-parties are fi nancial institutions, etc., with which transactions have been frequently carried out, such consolidated subsidiaries adopt necessary actions to reduce credit risks (e.g. conclusion of netting agreements).

(4) Risk management system (4) Risk management system The Risk Management Department of Tokio Marine, a department in charge The Risk Management Department of Tokio Marine, a department in charge of risk management which is independent of transaction-related departments, of risk management which is independent of transaction-related departments, fi rst reconciles transaction information and requests for managerial decisions fi rst reconciles transaction information and requests for managerial decisions to transaction reports provided by fi nancial institutions and brokers, and then to transaction reports provided by fi nancial institutions and brokers, and then approves such transaction data. Any risk position determined based upon such approves such transaction data. Any risk position determined based upon such approved data are evaluated at fair value as needed, and the Risk Management approved data are evaluated at fair value as needed, and the Risk Management Department determines interest income and risk volume related to derivative Department determines interest income and risk volume related to derivative transactions together with balance-sheet transactions such as securities and transactions together with balance-sheet transactions such as securities and loans, and reports them to a director in charge on a monthly basis. loans, and reports them to a director in charge on a monthly basis. In addition, as for the risk position of derivative transactions, the Risk In addition, as for the risk position of derivative transactions, the Risk Management Department thoroughly reviews whether such position is Management Department thoroughly reviews whether such position is determined in accordance with types of fi nancial instruments, specifi c risk determined in accordance with types of fi nancial instruments, specifi c risk limits and actions taken against any losses arising from such derivative limits and actions taken against any losses arising from such derivative transactions classifi ed and expressly stated by investment style in the transactions classifi ed and expressly stated by investment style in the “Investment Guidelines” and then reports the results of such review to a “Investment Guidelines” and then reports the results of such review to a director in charge on a monthly basis. director in charge on a monthly basis. The department also confi rms by each transactions whether details of such The department also confi rms by each transactions whether details of such risk position falls within the authority of transaction related departments. risk position falls within the authority of transaction related departments. Other consolidated subsidiaries have also established similar risk Other consolidated subsidiaries have also established similar risk management structures as described above. management structures as described above.

(5) Supplemental explanation on contract amount, fair value and unrealized gains/ (5) Supplemental explanation on contract amount, fair value and unrealized gains/ losses losses a. Notional principal (contract amount) a. Notional principal (contract amount) (No change) “Contract amount” as shown in the tables set forth in the following section is a nominal contract amount or notional principal of derivative transactions. The amount itself does not represent market risk or credit risk of derivative transactions.

b. Unrealized gains/losses b. Unrealized gains/losses Derivative transactions utilized for the purpose other than investment gains Derivative transactions utilized for the purpose other than investment gains are used for the purpose of managing the market risk of fi nancial assets are used for the purpose of managing the market risk of fi nancial assets from an ALM point of view. It is therefore necessary to evaluate assets and from an ALM point of view. It is therefore necessary to evaluate assets and liabilities as a whole, rather than to focus solely on unrealized gains/losses of liabilities as a whole, rather than to focus solely on unrealized gains/losses of derivative transactions, to assess the profi tability and fi nancial soundness. derivative transactions, to assess the profi tability and fi nancial soundness. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 78 Tokio Marine Holdings, Inc. 2009 Annual Report 2. Contract amount, fair value and unrealized gains and losses of derivative financial instruments

(1) Foreign currency-related instruments (Yen in millions) As of March 31, 2009 As of March 31, 2008

Type Contract Unrealized Contract Unrealized Over 1 year Fair value Over 1 year Fair value amount, etc. gains/(losses) amount, etc. gains/(losses) Foreign exchange forwards Short USD 413,200 4,272 (8,136) (8,136) 389,598 13,039 1,578 1,578 EUR 68,921 — (3,325) (3,325) 118,631 — (1,107) (1,107) GBP 11,148 — (658) (658) 14,683 — 293 293 AUD 9,746 — (133) (133) 19,793 — 325 325 CAD 5,310 — (302) (302) 7,200 — 880 880 HKD 24 — (0) (0) 899 — (26) (26) JPY 1,144 — (74) (74) 1,255 — (1) (1) Long USD 94,284 — 1,403 1,403 14,248 — 227 227 EUR 19,546 — 41 41 13,582 — 78 78 GBP 284 — (4) (4) 25,065 — (332) (332) AUD 11,985 — (200) (200) 2,084 — (17) (17) CAD 801 — (22) (22) 2,079 — (77) (77) SGD 1,033 — 63 63 — — — — NZD — — — — 809 — (26) (26) Currency swaps Pay Foreign/Rec. Yen USD 803,162 607,213 24,609 24,609 1,006,691 893,520 (2,436) (2,436) EUR 21,315 15,931 1,461 1,461 47,528 47,528 (3,411) (3,411) AUD 25,239 17,609 4,501 4,501 26,243 25,945 (2,607) (2,607) Over-the- counter Pay Yen/Rec. Foreign transactions USD 282,144 205,544 (26,915) (26,915) 249,589 188,359 6,416 6,416 EUR 15,728 14,202 (1,847) (1,847) 27,011 27,011 3,574 3,574 AUD 820 820 (226) (226) 1,013 1,013 46 46 Pay Foreign/Rec. Foreign Pay EUR/Rec. USD. 1,525 — (126) (126) 1,990 1,990 23 23 Pay USD/Rec. EUR. 484 — 26 26 647 647 16 16 Pay USD/Rec. AUD. — — — — 1,377 — 48 48 Pay USD/Rec. NZD — — — — 2,105 — (14) (14) Currency options Short Call 33,227 22,018 32,258 7,700 USD 924 715 482 429 1,639 1,302 912 271 Put 37,153 25,863 41,866 15,380 USD 5,826 (3,896) 1,499 (153) 1,929 1,584 1,345 705 05 Long Call 56,021 52,421 61,783 57,372 USD 4,216 57 5,147 739 4,158 3,979 4,408 4,272 Put 54,133 50,540 52,327 43,906 USD 7,328 3,064 2,694 (1,315) 4,173 4,017 4,009 3,800 Total 1,968,393 1,016,439 8,336 (9,927) 2,162,367 1,323,414 13,275 3,151 Notes: 1. The fair value of the foreign exchange forwards agreements at end of period is based on the futures’ market price. 2. The fair value of currency swap transactions is calculated by discounting future cash flows to the present value based on the interest rate at year end. 3. The fair value of foreign currency options contracts is based on an option pricing model. 4. For option contracts, option premiums at the inception are shown below the respective contractual amount. 5. Those instruments united with hedged items in a single accounting treatment are not included in the table above. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 79 PERFORMANCE05

(2) Interest rate-related instruments . (Yen in millions) As of March 31, 2009 As of March 31, 2008

Type Contract Unrealized Contract Unrealized Over 1 year Fair value Over 1 year Fair value amount, etc. gains/(losses) amount, etc. gains/(losses) Interest rate futures Market Short — — — — 15,000 —. 00 transactions Long 87,679 — 129 129 55,892 —. 46 46 Interest rate forward Short — — — — 57,125 — 13 13 Long — — — — 15,424 — (2) (2) Interest rate options Short 45,570 40,612 45,387 39,387 Cap 173 641 374 465 814 729 839 770 79,148 69,848 87,687 84,687 Swaption 2,109 (1,323) 1,356 (570) 786 445 786 786 Over-the- counter Long transactions 24,785 14,600 33,596 28,596 Cap 27 (398) 75 (355) 426 135 431 402 37,974 33,974 41,974 39,974 Swaption 425 (21) 89 (39) 447 357 129 129 Interest rate swap Rec. fi x/Pay fl oat 5,579,844 4,267,435 183,089 183,089 7,711,281 5,723,575 130,520 130,520 Rec. fl oat/Pay fi x 5,118,983 3,772,252 (124,231) (124,231) 7,021,398 4,883,349 (88,002) (88,002) Rec. fl oat/Pay fl oat 689,241 451,341 19,514 19,514 767,364 461,064 10,694 10,694 Rec. fi x/Pay fi x 123,864 45,667 (42,670) (42,670) 155,218 138,218 (2,741) (2,741) Total 11,787,092 8,695,731 38,567 34,727 16,007,352 11,398,854 52,424 50,028 Notes: 1. The fair value of the interest rate future is based on the closing price at major stock exchanges. 2. The fair value of the interest forward and the interest rate swap transactions is calculated by discounting future cash flows to the present value based on the interest rate at year end. 3. The fair value of interest rate options transactions is based on an option pricing model. 4. For option contracts, option premiums at the inception are shown below the respective contractual amount. 5. Interest rate swaps to which hedge accounting is applied are as follows. The amounts of deferred hedge gains and losses are presented before tax basis.

(Yen in millions) As of March 31, 2009 As of March 31, 2008

Classiﬁ cation Contract Deferred hedge Contract Deferred hedge Over 1 year Fair value Over 1 year Fair value amount, etc. gains/(losses) amount, etc. gains/(losses) Deferred hedge accounting in 439,400 362,900 19,463 5,095 420,400 420,400 853 2,894 accordance with Report No.26*

(Unamortized portion of deferred hedge gains and losses in accordance 6,117 1,086 with Report No.16** are shown below “Deferred hedge gains/(losses)”

Other deferred hedge accounting 96,748 46,448 894 844 107,287 102,287 693 649 Total 536,148 409,348 20,357 12,058 527,687 522,687 1,547 4,631 6. Deferred hedge gains and losses relating to the interest rate swap transactions to which hedge accounting is not applied are as follows. The amount of deferred gains and losses are presented before tax basis.

(Yen in millions) As of March 31, 2009 As of March 31, 2008 Classiﬁ cation Deferred hedge gains (losses) Deferred hedge gains (losses) Unamortized potion of deferred hedge gains and losses in accordance with Report in No. 16** 29,804 46,490 relating to interest rate swaps which are not covered by Report No. 26* Other deferred hedge accounting (13,955) (32,296) Total 15,849 14,194 * Report No. 26: Accounting and Auditing Treatments related to Adoption of Accounting for Financial Instruments in the Insurance industry (Japanese institute of Certified Public Accountants, September 3, 2002) ** Report No. 16: Tentative Accounting and Auditing Treatments related to Adoption of Accounting for Financial Instruments in the Insurance industry (Japanese institute of Certified Public Accountants, March 31, 2000) WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 80 Tokio Marine Holdings, Inc. 2009 Annual Report (3) Equity-related instruments

(Yen in millions) As of March 31, 2009 As of March 31, 2008 Type Contract Unrealized Contract Unrealized Over 1 year Fair value Over 1 year Fair value amount, etc. gains/(losses) amount, etc. gains/(losses) Equity index futures Short 10,454 — (57) (57) 22,030 — (41) (41) Long 2,269 — 114 114 26,008 — 567 567 Equity index options Market Short transactions — — 5,800 — Call —— 070 — — 70 — Long — — 11,900 — Put —— 175 (644) — — 819 — Equity index options Long 30,578 22,175 30,886 26,603 Put 13,609 7,157 9,263 2,302 Over-the- 6,452 5,272 6,961 6,187 counter Equity swap transactions transactions Rec. fl oating rate/Pay. 199 — 56 56 380 — 4 4 fl oating equity price Rec. fl oating equity 199 — (56) (56) 380 — (4) (4) price/Pay. fl oating rate Total 43,702 22,175 13,666 7,214 97,387 26,603 9,965 2,254 Notes: 1. The fair values of equity index futures and equity index options (market transaction) are based on the quoted closing price of the principal stock exchanges. 2. The fair values of equity index options of over-the-counter transactions and equity swap transactions are based on quotation from futures market, brokers and financial institutions (counterparties), or on an option pricing model. 3. For option contracts, the option premiums at the inception are shown below the respective contractual amount. 4. The synthetic options are classified into such as short or long positions by the receiving or paying option premiums at the time transactions started.

(4) Bond-related instruments

(Yen in millions) As of March 31, 2009 As of March 31, 2008 Type Contract Unrealized Contract Unrealized Over 1 year Fair value Over 1 year Fair value amount, etc. gains/(losses) amount, etc. gains/(losses) Bond futures Market Short 5,726 — (48) (48) 21,966 — (182) (182) transactions Long 23,547 — 421 421 49,281 — 235 235 Bond future options Short — — 31,253 — Call —— 75 (29) — — 46 — Over-the- — — 10,499 — counter Put —— 34 9 — — 44 — transactions Long 05 — — 10,499 — Call —— 20 (16) — — 37 — — — 10,460 — Put —— 11 (27) — — 39 — Total 29,274 — 373 373 133,959 — 194 (11) Notes: 1. The fair values of bond futures are based on the closing price at the principal stock exchanges. 2. The fair values of bond future options of over-the-counter are based on quotation from financial institutions (counterparties) or prices calculated by the internal valuation model. 3. For option contracts, the option premiums at the inception are shown below the respective contractual amount. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 81 PERFORMANCE05

(5) Credit-related instruments

(Yen in millions) As of March 31, 2009 As of March 31, 2008 Type Contract Unrealized Contract Unrealized Over 1 year Fair value Over 1 year Fair value amount, etc. gains/ (losses) amount, etc. gains/ (losses) Over-the- Credit derivatives counter Sell protection 678,171 473,254 (22,703) (22,703) 892,488 892,212 (10,944) (10,944) transactions Buy protection 47,017 45,379 1,588 1,588 46,855 43,579 714 714 Total 725,189 518,633 (21,114) (21,114) 939,343 935,792 (10,229) (10,229) Note: The fair value of the credit derivatives is calculated using the internal valuation model.

(6) Commodity-related instruments

(Yen in millions) As of March 31, 2009 As of March 31, 2008 Type Contract Unrealized Contract Unrealized Over 1 year Fair value Over 1 year Fair value amount, etc. gains/ (losses) amount, etc. gains/ (losses) Commodity swaps Rec. ﬁ xed price/Pay 4,307 4,157 (6,139) (6,139) 10,828 10,492 (24,402) (24,402) Over-the- Commodity indices counter Rec. commodity indices/ 3,863 3,817 4,369 4,369 9,802 9,555 20,329 20,329 transactions Pay ﬁ xed price Rec. Commodity indices/ 5,212 5,212 (221) (221) 19,351 19,351 (437) (437) Pay variable indices Total 13,383 13,187 (1,990) (1,990) 39,983 39,400 (4,510) (4,510) Note: The fair value of commodity swaps is calculated using the internal valuation model.

(7) Others

(Yen in millions) As of March 31, 2009 As of March 31, 2008 Type Contract Unrealized Contract Unrealized Over 1 year Fair value Over 1 year Fair value amount, etc. gains/ (losses) amount, etc. gains/ (losses) Index basket options 165,162 165,162 167,355 167,355 Long 30,897 25,920 11,962 9,568 4,976 4,976 2,394 2,394 Natural disaster derivatives 18,442 400 — — Over-the- Short 396 — —— counter 396 17 — — transactions 27,912 — — — Long 1,593 — —— 1,593 — — — Others 123 123 — — Short 9— —— 9 9 — — Total 211,640 165,686 32,895 25,920 167,355 167,355 11,962 9,568 Notes: 1. The fair value of the index basket option is calculated based on the price quoted by financial institutions (counterparties). 2. The option premiums at the inception are shown below the respective contractual amount. 3. The fair value of natural disaster derivatives and others are calculated based on the option premiums. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 82 Tokio Marine Holdings, Inc. 2009 Annual Report Retirement Benefits

1. Outline of the retirement and severance benefit plans The Company and other seven consolidated subsidiaries have an unfunded lump-sum payment retirement plan covering substantially all employees. Tokio Marine & Nichido has a corporate pension fund system and an approved retirement annuity plan. The benefits of the corporate pension fund system and lump-sum payment retirement plan are based on the points which each employee acquired through service. Additionally, some domestic consolidated subsidiaries have the employee retirement trust. In the year ended March 31, 2008, Tokio Marine & Nichido transferred a portion of its corporate pension fund to a defined-contribution pension plan as of July 2, 2007.

2. Breakdown of retirement benefits liabilities

(Yen in millions) As of March 31, 2009 As of March 31, 2008 a. Retirement benefi t liabilities (371,793) (384,401) b. Pension assets 151,611 181,286 c. Employee retirement trust 9,687 13,350 d. Unaccrued retirement benefi t liabilities (a+b+c) (210,494) (189,764) e. Unrecognized actuarial difference 90,345 82,842 f. Unrecognized prior service costs (21,586) (25,015) g. Net amount in the consolidated balance sheets (d+e+f) (141,734) (131,937) h. Prepaid pension expenses 6,772 6,522 i. Reserve for retirement benefi ts (g–h) (148,506) (138,459)

As of March 31, 2009 As of March 31, 2008

Notes Notes 1. The Company and its subsidiaries excluding Tokio Marine & Nichido, Nisshin 1. The Company and its subsidiaries excluding Tokio Marine & Nichido, Nisshin Fire, Tokio Marine & Nichido Life, Tokio Marine & Nichido Facilities and Tokio Fire, Tokio Marine & Nichido Life, Tokio Marine & Nichido Facilities and Tokio Marine & Nichido Career Service adopt the simple method in calculation of Marine & Nichido Career Service adopt the simple method in calculation of retirement benefi t liabilities. retirement benefi t liabilities. 2. The changes that resulted from the transfer of a portion of Tokio Marine & Nichido’s corporate pension fund to its defi ned contribution pension plan are detailed below. (Yen in millions) Decrease in retirement benefi t liabilities 60,163 Decrease in pension assets (32,984) Unrecognized actuarial difference (8,185) Unrecognized prior service costs 7,157 Decrease in reserve for retirement benefi t 26,151

05 3. Breakdown of retirement expenses

(Yen in millions) Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008) a. Service cost 16,505 16,102 b. Interest cost 7,350 7,701 c. Expected investment income (5,016) (5,847) d. Actuarial differences accounted for as expense 8,918 7,909 e. Amortization of prior service cost accounted for as (2,681) (2,910) expense f. Retirement benefi t expenses (a+b+c+d+e) 25,076 22,955 g. Amount transferred to the defi ned contribution 1,758 1,011 pension plan h. Gains and losses resulted from the transfer to the — (26,151) defi ned contribution pension plan i. Total (f+g+h) 26,835 (2,184) WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 83 PERFORMANCE05

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

Notes Notes 1. Employee contributions to the corporate pension fund are deducted from 1. Employee contributions to the corporate pension fund are deducted from service cost. service cost. 2. Retirement expenses for companies using simple method are recorded as ”a. 2. Retirement expenses for companies using simple method are recorded as service cost.“ “a. service cost.” 3. The item “h. Gains and losses resulted from the transfer to the deﬁ ned- contribution pension plan” is the gain recognized in connection with the transfer some part of corporate pension fund system to the deﬁ ned contribution pension plan, and included in “Other extraordinary gains.”

4. Accounting for retirement benefit liabilities

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

a. Distribution The lump-sum retirement benefi t system and the corporate The lump-sum retirement benefi t system and the corporate method for pension fund system mainly employ the point standard. pension fund system mainly employ the point standard. estimated retirement benefi ts

b. Discount rate 2.0% 1.3%–2.0%

c. Expected rate 1.3%–3.0% 1.3%–3.1% of return on investments

d. Terms to amortize (No change) 14 years (Expenses are accounted for using the straight-line unrecognized method over a certain number of years and within the average prior service costs remaining work period of employees at the time of occurrence)

e. Terms to (No change) 1 to 14 years (Expenses are accounted for in the following ﬁ scal amortize actuarial year using the straight-line method over a certain number of years unrecognized and within the average remaining work period of employees at the differences time of occurrence)

Stock Options

Year ended March 31, 2009 (April 1, 2008–March 31, 2009) 1. The account title and the amount related to stock options;

(Yen in millions) Loss adjustment expenses 73 Operating and general administrative expenses 359 Total 432 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 84 Tokio Marine Holdings, Inc. 2009 Annual Report 2. Details and figures relating to stock options (1) Details of stock options

Stock options (July 2008) Stock options (July 2007) Stock options (July 2006) Stock options (July 2005) (Stock option scheme as stock-linked (Stock option scheme as stock-linked (Stock option scheme as stock-linked (Stock option scheme as stock-linked compensation plan) compensation plan) compensation plan) compensation plan)

Title and Directors of the Company: 13 Directors of the Company: 12 Directors of the Company: 7 Directors of the Company: 11 number of Corporate auditors of the Corporate auditors of the Corporate auditors of the Corporate auditors of the grantees Company: 5 Company: 5 Company: 2 Company: 5 Directors of the Company’s Directors of the Company’s Directors of the Company’s Directors of the Company’s consolidated subsidiaries consolidated subsidiaries consolidated subsidiaries consolidated subsidiaries (excluding directors of the (excluding directors of the (excluding directors of the (excluding directors of the Company): 25 Company): 19 Company): 17 Company): 15 Corporate auditors of the Corporate auditors of the Corporate auditors of the Corporate auditors of the Company’s consolidated Company’s consolidated Company’s consolidated Company’s consolidated subsidiaries: 12 subsidiaries: 8 subsidiaries: 3 subsidiaries: 5 Directors* of the Company’s Directors* of the Company’s Directors* of the Company’s Directors* of the Company’s consolidated subsidiaries: 28 consolidated subsidiaries: 21 consolidated subsidiaries: 27 consolidated subsidiaries 27 (*) Non-members of the board (*) Non-members of the board (*) Non-members of the board (*) Non-members of the board

Number of stock options Common stock: 122,100 shares Common stock: 86,700 shares Common stock: 97,000 shares Common stock: 155,000 shares (Note 1)

Grant date August 26, 2008 July 23, 2007 July 18, 2006 July 14, 2005

Vesting Stock options vest on the date of Stock options vest on the date of Stock options vest on the date of Stock options vest on the date of conditions grant. Additionally, stock options grant. Additionally, stock options grant. Additionally, stock options grant. Additionally, stock options held by any of the directors or held by any of the directors or held by any of the directors or held by any of the directors or corporate auditors that he/she corporate auditors that he/she corporate auditors that he/she corporate auditors that he/she received in his/her capacity as a received in his/her capacity as a received in his/her capacity as a received in his/her capacity as a director (including a non-member director (including a non-member director (including a non-member director (including a non-member of the board) or a corporate of the board) or a corporate of the board) or a corporate of the board) or a corporate auditor of the relevant entity auditor of the relevant entity auditor of the relevant entity auditor of the relevant entity may be exercised after he/she may be exercised after he/she may be exercised after he/she may be exercised after he/she has retired from any position as a has retired from any position as a has retired from any position as a has retired from any position as a director (including a non-member director (including a non-member director (including a non-member director (including a non-member of the board) or corporate of the board) or corporate of the board) or corporate of the board) or corporate auditor of such entity before auditor of such entity before auditor of such entity before auditor of such entity before June 30, 2009. The number of June 30, 2008. The number of June 30, 2007. The number of June 30, 2006. The number of the exercisable stock options the exercisable stock options the exercisable stock options the exercisable stock options is calculated by the following is calculated by the following is calculated by the following is calculated by the following formula. formula. formula. formula. Number of stock options Number of stock options Number of stock options Number of stock options allotted x Number of months allotted × Number of months allotted × Number of months allotted × Number of months served by directors (including served by directors (including served by directors (including served by directors (including non-members of the board) or non-members of the board) or non-members of the board) or non-members of the board) or corporate auditors from July 2008 corporate auditors from July 2007 corporate auditors from July 2006 corporate auditors from July 2005 inclusive of the month of the inclusive of the month of the inclusive of the month of the inclusive of the month of the 05 retirement/12. retirement/12. retirement/12. retirement/12. Remaining stock options become Remaining stock options become Remaining stock options become Remaining stock options become unexercisable after the retirement unexercisable after the retirement unexercisable after the retirement unexercisable after the retirement date and then expire. date and then expire. date and then expire. date and then expire. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 85 PERFORMANCE05

Requisite From August 27, 2008 From July 24, 2007 From July 19, 2006 From July 15, 2005 service to June 30, 2009 to June 30, 2008 to June 30, 2007 to June 30, 2006 period

Exercise From August 27, 2008 From July 24, 2007 From July 19, 2006 From July 15, 2005 period to August 26, 2038. to July 23, 2037. to July 18, 2036. to June 30, 2035. Stock options held by any of the Stock options held by any of the Stock options held by any of the Stock options held by any of the directors, corporate auditors or directors, corporate auditors or directors, corporate auditors or directors, corporate auditors or operating offi cers that he/she operating offi cers that he/she operating offi cers that he/she operating offi cers that he/she received in his/her capacity as a received in his/her capacity as a received in his/her capacity as a received in his/her capacity as a director (including a non-member director (including a non-member director (including a non-member director (including a non-member of the board) or a corporate of the board) or a corporate of the board) or a corporate of the board) or a corporate auditor of the relevant entity auditor of the relevant entity auditor of the relevant entity auditor of the relevant entity may be exercised within ten days may be exercised within ten days may be exercised within ten days may be exercised within ten days after he/she has retired from any after he/she has retired from any after he/she has retired from any after he/she has retired from any position as a director (including position as a director (including position as a director (including position as a director (including a non-member of the board) a non-member of the board) a non-member of the board) a non-member of the board) or corporate auditor of such or corporate auditor of such or corporate auditor of such or corporate auditor of such entity (excluding the date of the entity (excluding the date of the entity (excluding the date of the entity (excluding the date of the retirement). retirement). retirement). retirement).

Note: The number of stock options corresponds to the number of underlying common stock.

(2) Figures relating to the stock options; (a) Number of the stock options

Stock options (August 2008) Stock options (July 2007) Stock options (July 2006) Stock options (July 2005) (Stock option scheme as stock-linked (Stock option scheme as stock-linked (Stock option scheme as stock-linked (Stock option scheme as stock-linked compensation plan) compensation plan) compensation plan) compensation plan)

Stock options before vested (converted to shares)

Outstanding at the beginning of the — 19,400 — — ﬁ scal year

Granted 122,100 — — —

Forfeited — 300 — —

Vested 95,900 19,100 — —

Outstanding at the end of the ﬁ scal 26,200 — — — year

Exercisable stock options (converted to shares)

Outstanding at the beginning of the — 66,300 73,000 91,500 ﬁ scal year

Vested 95,900 19,100 — —

Exercised 200 22,800 22,500 30,000 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 86 Tokio Marine Holdings, Inc. 2009 Annual Report Stock options (August 2008) Stock options (July 2007) Stock options (July 2006) Stock options (July 2005) (Stock option scheme as stock-linked (Stock option scheme as stock-linked (Stock option scheme as stock-linked (Stock option scheme as stock-linked compensation plan) compensation plan) compensation plan) compensation plan)

Forfeited ————

Outstanding at the end of the ﬁ scal 95,700 62,600 50,500 61,500 year

Note: The Company conducted a stock split of its shares of common stock effective as of September 30, 2006, whereby one share was split into 500 shares. The above numbers are presented on an after stock split basis.

(b) Price information

Exercise price ¥000,100 ¥000,100 ¥0,000,500 ¥0,500 Average stock price at ¥002,215 ¥004,294 ¥0,004,307 ¥4,290 exercise Fair value on the grant ¥353,300 ¥491,700 ¥2,013,506 ¥ — date

3. Valuation technique used for the estimated fair value of stock options Stock options granted in the fiscal year ended March 31, 2009 were valuated using the following valuation technique. (a) Valuation technique Black-Scholes Model (b) Assumptions Stock options (August, 2008) (Stock option scheme as stock-linked compensation plan) Expected volatility (Note 1) 34.93% Expected lives (Note 2) 2 years Expected dividends (Note 3) ¥32 Risk-free interest rate (Note 4) 0.700% Notes: 1. Computed based on the stock prices from August 27, 2006 to August 26, 2008. 2. Computed based on the average period of service of directors and corporate auditors. 3. Computed based on the average amount of dividends paid. 4. Based on yields of Japanese government bonds for a term corresponding to the expected lives.

4. Estimate of vested number of stock options Only the actual number of forfeited stock options is considered because it is difficult to rationally estimate the number of stock options that will be forfeited in the future. 05 Year ended March 31, 2008 (April 1, 2007–March 31, 2008) 1. The account title and the amount related to stock options;

(Yen in millions) Loss adjustment expenses 67 Operating and general administrative expenses 318 Total 385 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 87 PERFORMANCE05

2. Details and figures relating to stock options (1) Details of stock options

Stock options (July 2007) Stock options (July 2006) Stock options (July 2005) (Stock option scheme as stock-linked (Stock option scheme as stock-linked (Stock option scheme as stock-linked compensation plan) compensation plan) compensation plan)

Title and number of Directors of the Company: 12 Directors of the Company: 7 Directors of the Company: 11 grantees Corporate auditors of the Company: 5 Corporate auditors of the Company: 2 Corporate auditors of the Company: 5 Directors of the Company’s consolidated Directors of the Company’s consolidated Directors of the Company’s consolidated subsidiaries (excluding directors of the subsidiaries (excluding directors of the subsidiaries (excluding directors of the Company): 19 Company): 17 Company): 15 Corporate auditors of the Company’s Corporate auditors of the Company’s Corporate auditors of the Company’s consolidated subsidiaries: 8 consolidated subsidiaries: 3 consolidated subsidiaries: 5 Directors* of the Company’s consolidated Directors* of the Company’s consolidated Directors* of the Company’s consolidated subsidiaries: 21 subsidiaries: 27 subsidiaries 27 (*) Non-members of the board (*) Non-members of the board (*) Non-members of the board

Number stock Common stock: 86,700 shares Common stock: 97,000 shares Common stock: 155,000 shares options (Note 1)

Grant date July 23, 2007 July 18, 2006 July 14, 2005

Vesting conditions Stock options vest on the date of grant. Stock options vest on the date of grant. Stock options vest on the date of grant. Additionally, stock options held by any of Additionally, stock options held by any of Additionally, stock options held by any of the directors or corporate auditors that he/ the directors or corporate auditors that he/ the directors or corporate auditors that he/ she received in his/her capacity as a director she received in his/her capacity as a director she received in his/her capacity as a director (including a non-member of the board) or a (including a non-member of the board) or a (including a non-member of the board) or a corporate auditor of the relevant entity may corporate auditor of the relevant entity may corporate auditor of the relevant entity may be exercised after he/she has retired from be exercised after he/she has retired from be exercised after he/she has retired from any position as a director (including a non- any position as a director (including a non- any position as a director (including a non- member of the board) or corporate auditor member of the board) or corporate auditor member of the board) or corporate auditor of such entity before June 30, 2008. The of such entity before June 30, 2007. The of such entity before June 30, 2006. The number of the exercisable stock options is number of the exercisable stock options is number of the exercisable stock options is calculated by the following formula. calculated by the following formula. calculated by the following formula. Number of stock options allotted × Number Number of stock options allotted × Number Number of stock options allotted × Number of months served by directors (including of months served by directors (including of months served by directors (including non-members of the board) or corporate non-members of the board) or corporate non-members of the board) or corporate auditors from July 2007 inclusive of the auditors from July 2006 inclusive of the auditors from July 2005 inclusive of the month of the retirement / 12. month of the retirement / 12. month of the retirement / 12. Remaining stock options become Remaining stock options become Remaining stock options become unexercisable after the retirement date and unexercisable after the retirement date and unexercisable after the retirement date and then expire. then expire. then expire.

Requisite service From July 24, 2007 to June 30, 2008 From July 19, 2006 to June 30, 2007 From July 15, 2005 to June 30, 2006 period

Exercise period From July 24, 2007 to July 23, 2037. From July 19, 2006 to July 18, 2036. From July 15, 2005 to June 30, 2035. Stock options held by any of the directors Stock options held by any of the directors Stock options held by any of the directors or corporate auditors that he/she received or corporate auditors that he/she received or corporate auditors that he/she received in his/her capacity as a director (including a in his/her capacity as a director (including a in his/her capacity as a director (including a non-member of the board) or a corporate non-member of the board) or a corporate non-member of the board) or a corporate auditor of the relevant entity may be auditor of the relevant entity may be auditor of the relevant entity may be exercised within ten days after he/she has exercised within ten days after he/she has exercised within ten days after he/she has retired from any position as a director retired from any position as a director retired from any position as a director (including a non-member of the board) or (including a non-member of the board) or (including a non-member of the board) or corporate auditor of such entity (excluding corporate auditor of such entity (excluding corporate auditor of such entity (excluding the date of the retirement). the date of the retirement). the date of the retirement

Note: The number of stock options corresponds to the number of underlying common stock. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 88 Tokio Marine Holdings, Inc. 2009 Annual Report (2) Figures relating to the stock options (a) Number of the stock options

Stock options before vested (converted to shares)

Outstanding at the beginning of the — 13,500 — ﬁ scal year

Granted 86,700 — —

Forfeited ———

The number of stock options 67,300 13,500 — whose terms settled

Outstanding at the end of the ﬁ scal 19,400 — — year

Exercisable stock options (converted to shares)

Outstanding at the beginning of the — 83,500 121,500 ﬁ scal year

Vested 67,300 13,500 —

Exercised 1,000 24,000 30,000

Forfeited ———

Outstanding at the end of the ﬁ scal 66,300 73,000 91,500 year

(b) Prices information

Exercise price ¥000,100 ¥0,000,500 ¥0,500

Average stock price ¥003,670 ¥0,004,936 ¥5,022 at exercise Fair value on the ¥491,700 ¥2,013,506 ¥ — grant date

3. Valuation technique used for the estimated fair value of stock options Stock options granted in the fiscal year ended March 31, 2008 were valuated using the following valuation technique. (a) Valuation technique Black-Scholes Model (b) Assumptions Stock options (July, 2007) (Stock option scheme as stock-linked compensation plan) Expected volatility (Note 1) 34.00% Expected lives (Note 2) 3 years Expected dividends (Note 3) ¥28 Risk-free interest rate (Note 4) 1.164% Notes: 1. Computed based on the stock prices from April 1, 2002 to July 23, 2007. 2. Computed based on the average period of service of directors and corporate auditors. 3. Computed based on the average amount of dividends paid. 4. Based on yields of Japanese government bonds for a term corresponding to the expected lives.

Deferred Tax Accounting

As of March 31, 2009 As of March 31, 2008

1 Signifi cant portions of deferred tax assets and deferred tax liabilities 1 Signifi cant portions of deferred tax assets and deferred tax liabilities (Yen in millions) (Yen in millions) Deferred tax assets Deferred tax assets Underwriting reserves 431,940 Underwriting reserves 429,562 Outstanding claims 58,433 Outstanding claims 55,532 Reserve for retirement benefi ts 57,881 Reserve for retirement benefi ts 54,102 Loss on revaluation of securities 55,651 Provision for reserve for price fl uctuation 44,042 Net operating loss carry forward 25,073 Loss on revaluation of securities 30,151 Provision for reserve for price fl uctuation 20,379 Deferred hedge losses 18,787 Deferred hedge losses 15,028 Net operating loss carry forward 15,485 Others 85,523 Others 80,815 Subtotal 749,912 Subtotal 728,481 Valuation allowance (60,600) Valuation allowance (27,251) Total deferred tax assets 689,312 Total deferred tax assets 701,229

Deferred tax liabilities Deferred tax liabilities Difference from revaluation of other securities (347,099) Difference from revaluation of other securities (801,347) Unrealized gains on consolidated subsidiaries (73,673) Unrealized gains on consolidated subsidiaries (107,253) Deferred hedge gains (24,959) Deferred hedge gains (25,587) Others (66,402) Others (33,799) Total deferred tax liabilities (512,134) Total deferred tax liabilities (967,987) Net deferred tax assets (liabilities) 177,178 Net deferred tax assets (liabilities) (266,757) WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 90 Tokio Marine Holdings, Inc. 2009 Annual Report As of March 31, 2009 As of March 31, 2008

2 Reconciliation between the effective tax rate of the Company and the Japanese 2 Reconciliation between the effective tax rate of the Company and the Japanese statutory income tax rate statutory income tax rate (Percentages) (Percentages) Japanese statutory tax rate 40.7 Japanese statutory tax rate 40.7 (Adjustment) (Adjustment) Permanent differences such as dividends received (33.1) Permanent differences such as dividends received (8.8) Tax rate applied to subsidiaries (17.2) Tax rate applied to subsidiaries (3.6) Permanent differences such as entertainment Permanent differences such as entertainment 9.1 0.9 expenses expenses Valuation allowance 71.0 Valuation allowance 3.9 Investment proﬁ t/loss on equity method afﬁ liates 4.4 Income tax equivalents related to the reserve for policyholders dividends incurred by overseas 3.8 Reversal of deferred tax liabilities for retained earnings (25.9) subsidiaries of foreign subsidiaries due to the tax reform Others 0.0 Others 3.9 Effective tax rate 36.8 Effective tax rate 52.9

Business Combinations and Other Matters

As of December 1, 2008, the Company acquired Philadelphia Consolidated Holding Corp., a U.S. property & casualty (“P&C”) insurance group and made it a subsidiary through Tokio Marine & Nichido, a wholly owned subsidiary of the Company. In connection with the accounting for the acquisition, the Company has applied the purchase method as described below.

(i) The outline of the business combination to which the purchase method was applied a. Acquired company Philadelphia Consolidated Holding Corp., b. Business A holding company for subsidiaries operating insurance and insurance-related businesses c. Reasons for the business combination The Company intends to strengthen its operational platform for local commercial businesses in the U.S. and expand its overall insurance business in the U.S. insurance market. d. Date of the business combination December 1, 2008 e. Form of the business combination Reverse triangular merger under business combination laws in the U.S. f. Ratio of voting rights acquired through the business combination 100%

(ii) Period for which the operating results of the acquired company are included in the consolidated financial statements of the Company For accounting purposes, the business combination date is deemed to be the balance sheet date of Philadelphia Consolidated Holdings Corp. 05 Consequently, the results of operation of the acquired company are not included in the consolidated statements of income of the Company for the fiscal year ended March 31, 2009.

(iii) Acquisition cost 473,537 million yen

(iv) Amount, reason, amortization method and period of goodwill a. Amount of goodwill 253,611 million yen b. Reason The acquisition cost of the acquired company, which was calculated by taking into account the projected future revenues as of the valuation date, exceeded the value of the assets and liabilities of the acquired company as of the date of the business combination. This difference was recognized as goodwill. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 91 PERFORMANCE05

c. Amortization method and period To be amortized over 20 years using the straight-line method

(v) Assets and liabilities assumed on the date of the business combination and their main components.

Amount Amount Item Item (million yen) (million yen) Total assets 511,852 Total liabilities 291,926 (Securities) 225,405 (Insurance liabilities) 226,859

(vi) Approximate impact on the consolidated statements of income, assuming that the business combination took place at the beginning of the fiscal year ended March 31, 2009. The ordinary income, ordinary profit and net income would have increased by 166,851 million yen, 4,393 million yen and 143 million yen, respectively. These amounts represent the difference between the actual figures and the estimates of the figures for ordinary income, ordinary profit and net income calculated based on the assumption that the business combination was completed at the beginning of the fiscal year ended March 31, 2009. The amortized amount of goodwill was calculated assuming that the goodwill recognized at the time of the business combination had arisen at the beginning of the fiscal year ended March 31, 2009. The figures above are un-audited.

Year ended March 31, 2008 (April 1, 2007–March 31, 2008)

As of March 10, 2008, the Company acquired Kiln Ltd, a global insurance player with its primary base in the U.K. insurance market of Lloyd’s, and made it a subsidiary through Tokio Marine & Nichido, a wholly owned subsidiary of the Company. In connection with the accounting for the acquisition, the Company has applied the purchase method as described below.

(i) The outline of the business combination to which the purchase method was applied a. Acquired company Kiln Ltd b. Business A holding company for subsidiaries operating insurance and insurance-related businesses c. Reasons for the business combination The Company intends to expand the scale of its operations and earnings of its overseas insurance business and to establish a position as a major player in Lloyd’s of the U.K., one of the world’s leading insurance markets. d. Date of the business combination March 10, 2008 e. Ratio of voting rights acquired through the business combination 100%

(ii) Period for which the operating results of the acquired company are included in the consolidated financial statements of the Company For accounting purposes, the business combination date is deemed to be the balance sheet date of the acquired company. Consequently, the results of operation of the acquired company are not included in the consolidated statements of income of the Company for the fiscal year ended March 31, 2008.

(iii) Acquisition cost 94,122 million yen

(iv) Amount, basis, amortization method and amortization period of goodwill a. Amount of goodwill 29,596 million yen WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 92 Tokio Marine Holdings, Inc. 2009 Annual Report b. Basis The acquisition cost of the acquired company, which was calculated by taking into account the projected future revenues as of the valuation date, exceeded the market value of the net assets of the acquired company as of the date of the business combination. This difference was recognized as goodwill. c. Amortization method and period To be amortized over 10 years using the straight-line method

(v) Assets and liabilities assumed on the date of the business combination and their main components

Amount Amount Item Item (million yen) (million yen) Total assets 207,439 Total liabilities 142,914 (Securities) 79,167 (Insurance liabilities) 82,746

(vi) Approximate impact on the consolidated statements of income, assuming that the business combination took place at the beginning of the fi scal year ended March 31, 2008. The ordinary income, ordinary profi t and net income would have increased by 81,167 million yen, 9,566 million yen and 5,050 million yen, respectively. These amounts represent the difference between the actual fi gures and the estimates of the fi gures for ordinary income, ordinary profi t and net income calculated based on the assumption that the business combination was completed at the beginning of the fi scal year ended March 31, 2008. The amortized amount of goodwill was calculated assuming that the goodwill recognized at the time of the business combination had arisen at the beginning of the fi scal year ended March 31, 2008. The fi gures above are un-audited.

Segment Information

Segment information by business lines

Year ended March 31, 2009 (April 1, 2008–March 31, 2009)

(Yen in millions) Property and Life Others Total Elimination Consolidated casualty I Ordinary income and ordinary profi t / loss Ordinary income (1) Ordinary income from transactions with external 2,723,100 847,152 68,816 3,639,069 (135,967) 3,503,102 customers (2) Ordinary income arising from internal segment 6,984 456 27,490 34,931 (34,931) — transactions Total 2,730,085 847,608 96,306 3,674,001 (170,898) 3,503,102 Ordinary expenses 2,726,550 852,933 109,836 3,689,320 (171,089) 3,518,230 Ordinary profi t / loss 3,534 (5,324) (13,529) (15,319) 191 (15,128) II Assets / Depreciation / Impairment losses of fi xed assets and capital expenditure 05 Assets 9,458,878 5,359,894 512,090 15,330,864 (83,640) 15,247,223 Depreciation 19,280 760 791 20,833 — 20,833 Impairment losses of fi xed assets 3,008 243 4,061 7,313 — 7,313 Capital expenditure 25,490 956 1,079 27,526 (35) 27,491 Notes: 1. The segments are classified based on the characteristics of operation of the Company and its subsidiaries. 2. Major operations of each segment are as follows; Property and casualty: Underwriting property and casualty insurance and related investment activities Life: Underwriting life insurance and related investment activities Others: Securities investment advisory, securities investment trusts business, derivatives business, staffing business, real estate management business and elderly care business 3. The amount of the “Elimination” for “Ordinary income from transactions with external customers” is the transferred amount of the reversal of underwriting reserve in the amount of 123,046 million yen, which has been included in “Provision for underwriting reserve “ in “Other ordinary expenses” in the consolidates statements of income. 4. As described in “Changes to Basis of Significant Accounting Policies,” the Company has adopted “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ Practical Issues Task Force No.18, May 17, 2006) for the fiscal year ended March 31, 2009 and made necessary adjustments. As a result, in comparison with the previous method, ordinary income of property and casualty insurance business increased by 1,934 million yen and ordinary expense decreased by 2,416 million yen and ordinary profit increased by 4,351 million yen for the fiscal year ended March 31, 2009. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 93 PERFORMANCE05

Year ended March 31, 2008 (April 1, 2007–March 31, 2008)

(Yen in millions) Property and Life Others Total Elimination Consolidated casualty I Ordinary income and ordinary profi t / loss Ordinary income (1) Ordinary income from transactions with external 2,775,255 887,652 47,161 3,710,069 (3) 3,710,066 customers (2) Ordinary income arising from internal segment 5,470 271 27,705 33,447 (33,447) —. transactions Total 2,780,725 887,924 74,866 3,743,517 (33,451) 3,710,066 Ordinary expenses 2,606,570 883,899 75,671 3,566,141 (35,147) 3,530,994 Ordinary profi t / loss 174,155 4,024 (804) 177,375 1,696 179,071 II Assets / Depreciation / Impairment losses of fi xed assets and capital expenditure Assets 11,917,672 4,958,610 431,556 17,307,839 (24,597) 17,283,242 Depreciation 25,336 655 225 26,217 —. 26,217 Impairment losses of fi xed assets 7,920 734 —. 8,654 —. 8,654 Capital expenditure 20,595 626 290 21,512 (31) 21,480 Notes: 1. The segments are classified based on the characteristics of operation of the Company and its subsidiaries. 2. Major operations of each segment are as follows; Property and casualty: Underwriting property and casualty insurance and related investment activities Life: Underwriting life insurance and related investment activities Others: Securities investment advisory, securities investment trusts business, derivatives business, staffing business and real estate management business 3. The amount of the “Elimination” for “Ordinary income from transactions with external customers” is the transferred amount of the reversal of reserve for bad debt in the amount of 3 million yen, which has been included in “Provision of reserve for bad debts” in “Other ordinary expenses” in the consolidated statements of income. 4. As described in “Basis of presentation and significant accounting policies—(3) Depreciation method of tangible fixed assets—(Change in accounting policies),” the Company and its domestic consolidated subsidiaries have adopted a depreciation method for tangible fixed assets acquired on or after April 1, 2007, in accordance with the amended Corporate Tax Law of Japan. As a result, in comparison with the previous method, ordinary expenses of property and casualty insurance business, life insurance business and other businesses for the fiscal year ended March 31, 2008 increased by 398 million yen, 12 million yen and 9 million yen, respectively. 5. As described in “Basis of presentation and significant accounting policies—(3) Depreciation method of tangible fixed assets—(Change in accounting policies),” the Company and its domestic consolidated subsidiaries amortized the residual value of tangible fixed assets which were acquired on or before March 31, 2007 and which has met the end of the amortization period. The residual value is amortized over a five-year period by the straight-line method. As a result, in comparison with the previous method, ordinary expenses of property and casualty insurance business, life insurance business and other businesses for the fiscal year ended March 31, 2008 increased by 646 million yen, 1 million yen and 1 million yen, respectively.

Segment information by location

Year ended March 31, 2009 (April 1, 2008–March 31, 2009) (Yen in millions) Japan Americas Others Total Elimination Consolidated I Ordinary income and ordinary proﬁ t/loss Ordinary income (1) Ordinary income from transactions with external 3,219,462 124,108 202,183 3,545,754 (42,652) 3,503,102 customers (2) Ordinary income arising from internal segment 516 38 291 846 (846) — transactions Total 3,219,979 124,146 202,475 3,546,600 (43,498) 3,503,102 Ordinary expenses 3,223,991 130,230 207,695 3,561,917 (43,686) 3,518,230 Ordinary proﬁ t/loss (4,012) (6,083) (5,219) (15,316) 188 (15,128) II Assets 13,145,641 1,458,730 652,226 15,256,599 (9,375) 15,247,223

Notes: 1. Countries and regions are classified into groups based on geographic proximity. 2. Major countries and regions included in each group are as follows: (1) Americas: Brazil, Bermuda (2) Others: United Kingdom, Singapore and Malaysia 3. The major components of “Elimination” for “Ordinary income from external customers” are due to transferring amount of (1) 15,971 million yen from “Provision for outstanding claims”, which is included in ordinary expenses of “Other” segment, to “Reversal of outstanding claims” in “Ordinary income” in the consolidated statements of income and (2) 14,737 million yen from “Foreign exchange gain”, which is included in ordinary income relating to “Other” segment, to “Other investment expenses” in “Ordinary expenses” in the consolidated statements. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 94 Tokio Marine Holdings, Inc. 2009 Annual Report 4. As noted in “Changes in significant matters related to financial statements,” the Company has adopted “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ Practical Issues Task Force No. 18, May 17, 2006) for the fiscal year ended March 31, 2009 and implemented adjustments required for the consolidated financial reporting. As a result, in “Americas” segment, ordinary income and ordinary expenses increased by 115 million yen and 72 million yen, respectively, and ordinary loss decreased by 43 million yen. In addition, in “Others” segment, ordinary income increased by 1,832 million yen, ordinary expenses and ordinary losses decreased by 2,475 million yen and 4,308 million yen, respectively.

Year ended March 31, 2008 (April 1, 2007–March 31, 2008) Segment information by location is omitted since the “business in Japan” constitutes more than 90 percent of the aggregated amount of the ordinary income and the assets of all segments

Segment information by overseas sales Year ended March 31, 2009 (April 1, 2008-March 31, 2009)

(Yen in millions, except percentages) Americas Others Total I Overseas sales 183,188 254,525 437,713 II Consolidated ordinary income 3,503,102 III Ratio of I to II (%) 5.2 7.3 12.5 Notes: 1. Countries and regions are classified into groups based on geographic proximity. 2. Major countries and regions included in each group are as follows: (1) Americas: North America, Brazil (2) Others: United Kingdom, Singapore, and Malaysia 3. “Overseas sales” consists of the sum of overseas sales of domestic consolidated subsidiaries and ordinary income of overseas consolidated subsidiaries.

Year ended March 31, 2008 (April 1, 2007–March 31, 2008)

(Yen in millions, except percentages) Americas Others Total I Overseas sales 237,677 197,450 435,128 II Consolidated ordinary income 3,710,066 III Ratio of I to II (%) 6.4 5.3 11.7 Notes: 1. Countries and regions are classified into groups based on geographic proximity. 2. Major countries and regions included in each group are as follows: (1) Americas: North America, Brazil (2) Others: United Kingdom, Singapore, and Malaysia 3. “Overseas sales” consists of the sum of overseas sales of domestic consolidated subsidiaries and ordinary income of overseas consolidated subsidiaries.

Transactions with Related parties

Year ended March 31, 2009 (April 1, 2008–March 31, 2009) None of our transactions are specifically described for they are considered immaterial.

(Additional Information) The Company has applied “Accounting Standard for Related Party Disclosures” (ASBJ Statement No. 11, October 17, 2006) and “Guidance on Accounting Standard for Related Party Disclosures” (ASBJ Guidance No. 13, October 17, 2006) from the fiscal year ended March 31, 2009. 05

Year ended March 31, 2008 (April 1, 2007–March 31, 2008) None of our transactions are specifically described for they are considered immaterial. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 95 PERFORMANCE05

Per Share Information

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007 –March 31, 2008)

(Yen) (Yen) Net assets per share 2,066.92 Net assets per share 3,195.45 Net income per share—Basic 29.13 Net income per share—Basic 133.54 Net income per share—Diluted 29.12 Net income per share—Diluted 133.50

Note: Calculation of “Net income per share-Basic” and “Net income per share-Diluted” is based on the following figures.

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008) Net income per share—Basic Net income (Yen in millions) 23,141 108,766 Net income not attributable to common shareholders (Yen in millions) — — Net income attributable to common stocks (Yen in millions) 23,141 108,766 Average number of shares outstanding 794,350,872 814,477,047 Net income per share—Diluted Adjustment of net income (Yen in millions) — — Increase number of common stocks 268,558 239,566 Stock acquisition rights (268,558) 239,566

Subsequent Events

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

On June 8, 2009, E. design Insurance Preparatory Co., Ltd. (“E. design”), jointly 1. The Company agreed to acquire 100% of the outstanding shares of established by Tokio Marine Holdings, Inc. and NTT FINANCE CORPORATION, Philadelphia Consolidated Holding Corp. (“Philadelphia Consolidated”), a U.S. received approval to commence business from the Financial Services Agency of property & casualty (“P&C”) insurance group (hereinafter: “the Acquisition”) Japan. E. design began operations on June 13, 2009. amounting to US$4,705 million (505.09 billion yen), through the Company’s wholly owned subsidiary, Tokio Marine & Nichido Fire Insurance Co., Ltd. E. design Profi le (“TMNF”) on July 23, 2008. (1) Location of headquarters: 13F Tokyo Opera City Tower 3-20-2, Nishi-Shinjuku, Shinjuku-ku, Tokyo, Japan The purpose of the acquisition and overview of Philadelphia Consolidated are (2) Principal business: Property and casualty insurance business as follows. (3) Capitalization: 6,750 million yen (1) Purpose of the Acquisition (4) Shareholders and shareholding percentages: The acquisition of Philadelphia Consolidated enables us to signifi cantly (i) Tokio Marine Holdings, Inc.: 85.01% enhance our U.S. platform for local commercial business and to fully realize (ii) NTT FINANCE CORPORATION: 14.99% this key international market. (2) Overview of Philadelphia Consolidated As of June 8, 2009, the company’s name changed from “E. design Insurance (i) Name of the company Preparatory Co., Ltd.” to “E. design Insurance Co., Ltd.” Philadelphia Consolidated Holdings Corp. (ii) Head offi ce Philadelphia, Pennsylvania, the U.S. (iii) Business A holding company which owns insurance companies and insurance related companies. (iv) Gross premiums written (2007) US$1,692 million (181.66 billion yen) (v) Total assets (as of Dec.31, 2007) US$4,099 million (4,401.28 billion yen) WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 96 Tokio Marine Holdings, Inc. 2009 Annual Report Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

(3) Financing The Acquisition will be ﬁ nanced through the utilization of Tokio Marine Group cash on hand, together with borrowings, including non-convertible bond issuance.

(4) Acquisition process Under and in accordance with applicable laws and regulations in the U.S., the Acquisition will be implemented by ﬁ rst establishing TMNF’s 100% owned special purpose company in Pennsylvania, and then merging Philadelphia Consolidated and the special purpose company. The merger requires a majority approval of Philadelphia Consolidated’s shareholders present at a special meeting called to vote on the Acquisition, and the approval of the shareholder of the special purpose company. Through this process, TMNF will purchase the entire outstanding shares in return for consideration to Philadelphia Consolidated’s shareholders. The Acquisition is subject to approval of various regulatory authorities of Japan and the U.S.

(5) Closing The Company intends to proceed expeditiously and expects to complete the process by the fourth quarter of 2008.

(Note) The Japanese yen amounts which described above have been translated at the exchange rate as of July 23, 2008.

2. The Company announced that it intended to sell all of the shares of Real Tokio Marine Vida e Previdência S.A. (“RTMVP”), a life insurance and pension afﬁ liate in Brazil, to ABN AMRO Brasil Dois Participacoes S.A. (“ABN AMRO”)

(1) Cause of sales Under the shareholders’ agreement between the Company and ABN AMRO, entered into when the Company acquired the shares of RTMVP in July 2005, ABN AMRO reserves the right to purchase all the shares of RTMVP held by the Company if a change of control of either the Company or ABN AMRO occurs.

Following the recent change in the control of ABN AMRO, ABN AMRO notiﬁ ed the Company of its intention to exercise its acquisition right in accordance with the shareholders’ agreement.

(2) Overview of RTMVP (i) Name of the company Real Tokio Marine Vida e Previdência S.A. (ii) Head ofﬁ ce São Paulo, Brazil (iii) Business Life insurance and pension (iv) Premiums & Pension income (2007) 05 R$ 1,490 million (102.236 billion yen) (v) Total assets (as of Dec.31, 2007) R$ 5,432 million (372.689 billion yen)

(3) Number of shares to be sold 99,309 thousand shares

(4) Share of equity after sales None

(5) Time of sales, sales price of shares Undecided

(Note) The Japanese yen amounts which described above have been translated at the exchange rate as of July 28, 2008. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 97 PERFORMANCE05

Year ended March 31, 2009 Year ended March 31, 2008 (April 1, 2008–March 31, 2009) (April 1, 2007–March 31, 2008)

3. On August 11, 2008, the board of directors of the Company resolved repurchases of its own shares, pursuant to Article 156 of the Companies Act which is applicable in accordance with Article 165, paragraph 3 of the Companies Act, as detailed below.

(1) Class of shares to be repurchased Common stock of the Company.

(2) Aggregate number of shares to be repurchased Up to 18,000,000 shares.

(3) Aggregate purchase price of shares Up to 50 billion yen.

(4) Period in which repurchases may be made From August 12, 2008 through November 18, 2008 except September 22, 2008 through September 30, 2008.

Related Information to the Consolidated Financial Statements

(Bonds)

Amount Amount Outstanding Outstanding Coupon Issuer Series Issue Date Collateral Maturity 31 Mar 09 31 Mar 08 (%) (Yen in millions) (Yen in millions)

11 Mar 08 0.62 11 Apr 08 99,965 Short-term – — – None – [99,965] 28 Mar 08 0.71 25 Apr 08 Tokio Marine & Nichido 1 Unsecured 2 Dec 99 [50,000] 50,000 1.96 None 2 Dec 09 1–2 Unsecured 28 Feb 00 [15,000] 15,000 1.95 None 26 Feb 10 3 Unsecured 20 Sep 00 20,000 20,000 2.14 None 20 Sep 10 4 Unsecured 20 Sep 00 10,000 10,000 2.78 None 18 Sep 20 11 Oct 06 11 Oct 36 Subordinated Bond 5,881 7,325 – 4.53 None – Kiln Group Limited in USD (US$64,247,000) (US$63,974,000) 20 Nov 06 20 Nov 36 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 98 Tokio Marine Holdings, Inc. 2009 Annual Report Amount Amount Outstanding Outstanding Coupon Issuer Series Issue Date Collateral Maturity 31 Mar 09 31 Mar 08 (%) (Yen in millions) (Yen in millions)

7 Apr 04 0.30 13 Jan 09 32,424 40,978 Straight Bond – – None – [300] [5,000] 30 Jul 08 2.17 19 May 21

127 165 Straight Bond in Euro 31 Mar 06 2.35 None 31 Mar 11 (EUR1,000,000) (EUR1,000,000)

18 Aug 03 0.00 20 Jan 09 Power Reverse Dual 29,850 – 30,450 – None – Currency Note [300] 3 Jul 08 8.00 5 Jul 38 6 Feb 06 0.00 13 Sep 27 Nikkei Average Linked – 6,300 4,500 – None – Note 2 Dec 08 4.30 3 Dec 38 16 Sep 04 0.09 28 Sep 11 CMS Floater Note – 19,740 20,240 – None – 28 Sep 06 3.03 20 Feb 26

1 Feb 05 0.00 20 Dec 11 Tokio Marine Financial Reverse Floater Note – 26,600 32,500 – None – Solutions Ltd. 8 Nov 06 2.60 30 Mar 26 1 Dec 04 2 Dec 24 FX Linked Digital – 1,250 1,250 0.10 None – Coupon Note 23 Oct 06 24 Oct 36 16 Jun 05 0.00 13 Jan 09 15,200 Snow Ball Note – 17,200 – None – [800] 26 Oct 06 4.80 27 Oct 26 12 Jul 05 0.00 11 Jan 17 FX Linked Coupon – 65,250 53,770 – None – Note 23 Oct 08 12.00 24 Oct 38 14 Jul 08 1.44 29 Jun 09 2,100 Credit Linked Note – — – None – [1,000] 30 Jul 08 1.94 28 Sep 11 13 Aug 08 14 Aug 09 China Class-A Equity 199 380 – 0.00 None – Linked Note [199] [380] 28 Nov 08 30 Nov 09

29 May 07 12,284 5.04 29 May 08 Straight Bond in USD – — (USD115,451,000) – Yes – 20 Jun 07 [12,284] 5.43 20 Jun 08

20 Mar 07 13,559 5.50 20 Mar 08 Straight Bond in GBP – — (GBP64,010,000) – Yes – Vetra 12 Jul 07 [13,559] 6.12 14 Jul 08 05 Finance Corporation 1,428 Straight Bond in AUD 17 Jul 07 — (AUD14,994,000) 7.17 Yes 17 Jul 08 [1,428] 2,091 Straight Bond in NZD 27 Jul 07 — (NZD24,988,000) 8.74 Yes 28 Jul 08 [2,091] Total — 299,922 433,088 — — — Notes: 1. The figures shown in the parentheses ( ) are the principal amount in foreign currencies. 2. The figures shown in the parentheses [ ] are the principal amount to mature within 1 year. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 99 PERFORMANCE05

3. Principal amounts to mature within 5 years after March 31, 2009 are as follows:

(Yen in millions) Within 1 Year Over 1 to 2 Years Over 2 to 3 Years Over 3 to 4 Years Over 4 to 5 Years 67,599 23,373 13,481 3,000 10,675

(Borrowings)

Amount Amount Average Outstanding Outstanding Interest Maturity 31 Mar 09 31 Mar 08 rate (Yen in Millions) (Yen in Millions) (%) Short term borrowings 3,857 153 18.4 — Long term borrowings to be repaid within 1 year 12,599 2 1.4 — Obligations under lease transactions to be repaid within 1 year 2,129 — — — 30 Apr 10 Long term borrowings other than above 282,496 37,544 0.9 – 20 Mar 32 20 Apr 10 Obligations under lease transactions other than above 3,335 — — – 20 Feb 15 Other interest-bearing liabilities — 16,009 — — Commercial Paper (to be repaid within 1 year) Total 304,418 53,711 — — Notes: 1. Average interest rate is calculated based on the interest rate as of the end of the fiscal year and principal amount outstanding. 2. As lease obligations are posted on the consolidated balance sheets in amounts prior to the elimination of an amount equivalent to interest, including interest on the total lease amount, lease obligations are not stated in the “Average Rate” column. 3. The above amount is included in “Other liabilities” in the consolidated balance sheets. 4. Principal amount of long term borrowings (other than that which is to be repaid within 1 year) to be repaid within 5 years after March 31, 2008, is as follows:

(Yen in millions) Over 1 to 2 Years Over 2 to 3 Years Over 3 to 4 Years Over 4 to 5 Years Long-Term borrowings 1,076 250,357 5,022 5,009 Lease Obligations 1,915 958 436 14

(2) Others Quarterly results for the year ended March 31, 2009 First quarter Second quarter Third quarter Fourth quarter (April 1, 2008 to (July 1, 2008 to (October 1, 2008 to (January 1, 2009 to June 30, 2008) September 30, 2008) December 31, 2008) March 31, 2009) Ordinary income (Yen in Millions) 1,048,740 910,492 827,711 716,157 Quarterly net income or losses before income 33,062 (18,651) (7,007) 39,533 taxes (Yen in Millions) Quarterly net income or losses 28,854 (10,800) (13,417) 18,503 (Yen in Millions)

Quarterly net income or losses per share (Yen) 35.96 (13.51) (17.01) 23.49 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 100 Tokio Marine Holdings, Inc. 2009 Annual Report 05 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 101 PERFORMANCE05 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 102 Tokio Marine Holdings, Inc. 2009 Annual Report Solvency Margin Ratio

Insurance claim and other payment abilities of subsidiary insurance companies and small-amount, short-term insurers

Solvency margin ratio for Tokio Marine & Nichido Fire Insurance

(Unit: Yen in millions % )

Item As of March 31, 2009 As of March 31, 2008 Total amount of solvency margin (A) 3,258,557 4,493,449 Total net assets 703,794 715,211 Price ﬂ uctuation reserve 53,462 115,628 Contingency reserve 62 — Catastrophe loss reserve including earthquake insurance 1,059,901 1,079,319 General valuation allowances for bad debts 1,039 1,322 Net unrealized gains/losses on securities (Prior to tax effect deductions) 975,195 2,157,040 Net unrealized gains/losses on real estate 244,192 197,955 Excess amount of policyholders’ contract deposits — — Subordinated debt, etc. — — Deductions 10,000 10,000 Other 230,909 236,971 Total amount of risks (B) 2 2 935,272 938,278 ǰ(R1+R2) +(R3+R4) +R5+R6

General insurance risk (R1) 107,078 108,178

Third sector insurance risk (R2)6—

Assumed interest risk (R3) 8,770 8,964

Asset management risk (R4) 417,692 453,809

Business administration risk (R5) 20,178 20,274

Catastrophe risk (R6) 475,391 442,754 Solvency margin ratio (C) 696.8% 957.8% [(A)/{(B)×1/2}]×100

Note: The above figures were calculated in accordance with Articles 86 and 87 of the Insurance Business Law of Japan enforcement regulations and Ministry of Finance Official Notification No.50 stipulated in 1996.

Solvency Margin Ratio 1. In addition to reserves to cover claims payments and payments for maturity-refunds of saving type insurance policies, etc., it is necessary for insurance companies to maintain sufficient solvency in order to cover against risks which may exceed their usual estimates, i.e. the occurrence of major disasters, a significant decline in value of assets held by insurance companies, etc. 2. The solvency margin ratio (C); which is calculated in accordance with the Insurance Business Law, is the ratio of “solvency margin of insurance companies by means of their capital, reserves, etc.” (total amount of solvency margin: (A)) to “risks which will exceed their usual 05 estimates” (total amount of risks: (B)). 3. “Risks which will exceed their usual estimates” (total amount of risks; (B)) is composed of risks described below. (1) (General) insurance risk, third sector insurance risk: Risks of occurrence of insurance claims in excess of normal expectations (excluding risks relating to major disasters). (2) Assumed interest risk: Risks of invested assets failing to yield assumed interest rates due to the aggravation of investment conditions than expected. (3) Asset management risk: Risks of retained securities and other assets fluctuating in prices in excess of expectations. (4) Business administration risk: Risks beyond normal expectations arising from business management that does not fall under other categories. (5) Catastrophic risk: Risks of the occurrence of major catastrophic losses in excess of normal expectations. (risks such as the Great Kanto Earthquake or Isewan typhoon) 4. “Solvency margin of insurance companies by means of their capital, reserves, etc.” (Total amount of solvency margin: (A)) is total amount of net assets (excluding planned outflows), certain reserves (reserve for price fluctuations, contingency reserves and catastrophe reserves, etc.) and parts of net unrealized gains on real estate. 5. The solvency margin ratio is one of the indicators for the regulatory authorities to supervise insurance companies. A ratio exceeding 200% indicates adequate ability to meet payments of insurance claims. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 103 PERFORMANCE05

Solvency margin ratio for Nisshin Fire & Marine Insurance

(Unit: Yen in millions %)

Item As of March 31, 2009 As of March 31, 2008 Total amount of solvency margin (A) 138,990 178,365 Total net assets 57,299 70,195 Price ﬂ uctuation reserve 272 4,108 Contingency reserve —— Catastrophe loss reserve including earthquake insurance 64,354 65,912 General valuation allowance for bad debts 441 256 Net unrealized gains/losses on securities (Prior to tax effect deductions) 6,564 19,499 Net unrealized gains/losses on real estate 1,828 2,200 Excess amount of policyholders’ contract deposits — — Subordinated debt, etc. — — Deductions —— Other 8,229 16,191 Total amount of risks (B) 2 2 37,669 39,663 ǰ(R1+R2) +(R3+R4) +R5+R6

General insurance risk (R1) 7,831 8,034

Third sector insurance risk (R2)——

Assumed interest risk (R3) 445 467

Asset management risk (R4) 8,872 14,259

Business administration risk (R5) 1,242 895

Catastrophe risk (R6) 24,255 21,992 Solvency margin ratio (C) 737.9% 899.3% [(A)/{(B)×1/2}]×100

Solvency margin ratio for Tokio Marine & Nichido Life Insurance

(Unit: Yen in millions %)

Item As of March 31, 2009 As of March 31, 2008 Total amount of solvency margin (A) 276,028 249,760 Total net assets 85,529 85,529 Price fluctuation reserve 2,688 2,235 Contingency reserve 22,959 21,717 General valuation allowance for bad debts 158 59 Net unrealized gains on securities ×90% (× 100% if losses) 22,639 12,565 Net unrealized gains on real estate×85% (× 100% if losses) — — Excess of continued Zillmerized reserve 76,733 63,419 Subordinated debt, etc. — — Deductions —— Other 65,319 64,234 Total amount of risks (B) 2 2 21,259 18,054 ǰ(R1+R8) +(R2+R3+R7) +R4

Insurance risk (R1) 11,475 10,808

Assumed interest risk (R2) 2,249 2,221

Asset management risk (R3) 12,105 8,366

Business administration risk (R4) 865 729

Minimum guarantee risk (R7)——

Third sector insurance risk (R8) 3,010 2,904 Solvency margin ratio (C) (A) 2,596.7% 2,766.7% ×100 (1/2)×(B) Note: The above figures were calculated in accordance with Articles 86, 87, 161, 162 and 190 of the Insurance Business Law of Japan enforcement regulations and Ministry of Finance Official Notification No.50 stipulated in 1996. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 104 Tokio Marine Holdings, Inc. 2009 Annual Report Solvency margin ratio for Tokio Marine & Nichido Financial Life Insurance

(Unit: Yen in millions %)

Item As of March 31, 2009 As of March 31, 2008 Total amount of solvency margin (A) 85,255 96,239 Total net assets 25,632 15,554 Price fluctuation reserve 26 17 Contingency reserve 20,452 24,833 General valuation allowance for bad debts 0 — Net unrealized gains on securities ×90% (× 100% if losses) 166 -7 Net unrealized gains on real estate×85% (× 100% if losses) — — Excess of continued Zillmerized reserve 28,978 45,841 Subordinated debt, etc. 10,000 10,000 Deductions —— Other —— Total amount of risks (B) 2 2 16,123 16,627 ǰ(R1+R8) +(R2+R3+R7) +R4

Insurance risk (R1) 145 150

Assumed interest risk (R2)22

Asset management risk (R3) 6,761 1,565

Business administration risk (R4) 475 489

Minimum guarantee risk (R7) 8,882 14,567

Third sector insurance risk (R8)4741 Solvency margin ratio (C) (A) 1,057.5% 1,157.5% ×100 (1/2)×(B) Notes: 1. The above figures were calculated in accordance with Articles 86, 87, 161, 162 and 190 of the Insurance Business Law of Japan enforcement regulations and Ministry of Finance Official Notification No.50 stipulated in 1996. 2. The minimum guarantee risk was calculated using the standard method.

Solvency margin ratio for Millea Nihon Kosei SS Insurance

(Unit: Yen in millions %)

Item As of March 31, 2009 As of March 31, 2008 Total amount of solvency margin (A) 1,979 755 Total net assets excluding planned outflows 1,938 755 Reserve for price fluctuation — — Catastrophe loss reserve 41 — General valuation allowance for bad debts — — Net unrealized gains on securities (Prior to tax effect deductions) — — Net unrealized gains/losses on real estate — — Refund reserve premium — — 05 Future profit —— Tax effect equivalent value — — Subordinated debt, etc. — — Deductions —— Total amount of risks (B) 2 2 213 18 ǰR1 +R2 +R3+R4 Equivalent insurance risk 203 11

General insurance risk equivalent value (R1) 183 1

Catastrophe risk equivalent value (R4)2010

Asset management risk equivalent value (R2)297

Business administration risk equivalent value (R3)60 Solvency margin ratio (C) 1,858.3% 8,278.3% [(A)/{(B)×1/2}]×100 Note: The above figures were calculated in accordance with Articles 211-59 and 211-60 of the Insurance Business Law of Japan enforcement regulations and Financial Services Agency’s Official Notification No.14 stipulated in 2006. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 105 PERFORMANCE05

Interest-rate Sensitivity of ALM Surplus Value

The following tables show how the hypothetical changes in interest rates affect the present value of the surplus in Tokio Marine & Nichido’s and in Tokio Marine & Nichido Life’s asset-liability portfolio as of March 31, 2009 and March 31, 2008. The asset-liability portfolio is composed of assets to meet future obligations and reserves for insurance policies including deposit-type insurance and long-term insurance policies, and the present value of the surplus in the portfolio is measured as the difference between the present value of assets and that of liabilities (before taxes and future policy dividends).

Tokio Marine & Nichido

(Yen in billions)

Yield curve shift

As of March 31, 2009 -1% 0% 1% 2% General Policy Account (1.9) 0.0 (1.9) (5.5) Deposit-Type Insurance Accounts (3.3) 0.0 (1.0) (7.9) Asset-Liability Portfolio (5.2) 0.0 (2.9) (13.5)

(Yen in billions)

Yield curve shift

As of March 31, 2008 -1% 0% 1% 2% General Policy Account (5.6) 0.0 0.6 (1.2) Deposit-Type Insurance Accounts (4.5) 0.0 0.6 (5.0) Asset-Liability Portfolio (10.1) 0.0 1.2 (6.2)

Tokio Marine & Nichido Life (Yen in billions)

Yield curve shift

As of March 31, 2009 -1% 0% 1% Asset-Liability Portfolio (93.2) 0.0 (16.4)

(Yen in billions)

Yield curve shift

As of March 31, 2008 -1% 0% 1% Asset-Liability Portfolio (45.7) 0.0 (27.2)

(1) Based on the prevailing yield curve for Japanese government bonds on the indicated dates. (2) The information presented above has been prepared solely for risk management purposes and is not indicative of the actual effect on the financial condition, results of operations or corporate value of Tokio Marine & Nichido and Tokio Marine & Nichido Life caused by the changes in past or future interest rates. (3) The information indicates the hypothetical changes of the present value of ALM surplus value and accordingly the numbers of Tokio Marine & Nichido Life presented above may be different from those which are described in table “4. Effects of Changes in Assumptions” of “Embedded Value for Tokio Marine & Nichido Life as of March 31, 2009.” (4) Tokio Marine & Nichido Life: On the basis taking dynamic lapse into consideration WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 106 Tokio Marine Holdings, Inc. 2009 Annual Report Embedded Value

About Embedded Value Embedded Value (“EV”) is regarded as one of the measures used to assess the economic value of a life insurance business and its performance. In Japan, over ten insurers have disclosed their EV as of March 31, 2008. It is calculated as the sum of the “net asset value” and “value of in-force business.” “Net asset value” is calculated by adding “Contingency reserve (after tax)” and “Reserve for price fluctuations (after tax)” which are regarded as appropriate to be included in “net assets,” to “net assets” in the balance sheets. “Value of in-force business” represents the present value as at the valuation date of future “net incomes (after tax)” distributable to shareholders from the in-force business. The present value is calculated by discounting future distributable shareholders’ profits, fewer sur- pluses required to be retained in order to maintain a certain level of solvency margin, using a risk discount rate that takes a risk premium into consideration. The financial accounting practices of Japanese life insurance companies emphasize a conservative approach for the purpose of best protecting their policyholders. As such, policies are initially valued as a minimal contribution to profits, limiting the usefulness of their value and impact on earnings evaluations in the life insurance business. EV adjusts for this conservatism in financial accounting practices, enabling a proper evaluation based on value and earnings that reflect actual business conditions.

The Tokio Marine Group adopts “change in EV” and “ROE”, as measures used for assessing its performance in the life insurance business.

Embedded Value for Tokio Marine & Nichido Life 1. EV as of March 31, 2009 The EV as of March 31, 2009 was 358.3 billion yen in total: net asset value of 118.4 billion yen and value of in-force business of 239.9 billion yen.

(Yen in billions)

FY2008 FY2007 FY2006 Net asset value 118.4 108.6 97.6 Value of in-force business 239.9 255.7 237.5 EV as at the end of the fiscal year 358.3 364.3 335.2 Value of new business 0.2 3.7 8.7

2. Change in EV and ROE EV as of the end of FY2008 decreased by 6.0 billion yen from that as of the end of FY2007 (the change in EV: -6.0 billion yen), while ROE for FY2008 was -1.7%. The change in EV from March 31, 2008 to March 31, 2009 (excluding the capital increase during the term) decreased by 35.1 billion yen, compared to that from March 31, 2007 to March 31, 2008. This is mainly because the effect of changes in assumptions such as mortality & morbidity rates and surrender & lapse rates was negative 17.8 billion yen, a deterioration of 19.8 billion yen from the previous fiscal year, and also because the effect of changes in investment yields in the wake of decreased ultra long-term JGB yield was negative 8.7 billion yen, a deterioration of 10.6 billion yen from the previous fiscal year.

(Yen in billions) 05

FY2008 FY2007 FY2006 Change in EV (excluding the capital increase during the term) (6.0) 29.1 30.4 Average balance of EV 361.3 349.7 295.0 ROE Note (1.7)% 8.3% 10.3% (Reference) Change in EV (excluding the capital increase and the effects of changes 20.6 25.3 29.8 in assumptions and investment yields during the term)

Note: ROE = Change in EV (excluding the capital increase during the term)/Average EV WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 107 PERFORMANCE05

3. Major Assumptions The major assumptions used in calculating the value of in-force business at March 31, 2009 were as follows:

Assumption Basis of assumption Based on past experience by benefit type, and policy year and attained age, etc. Mortality and morbidity rates For policy years where no experience data was available, assumptions have been based on industry statistics. Surrender and lapse rates Based on past experience by line of business, premium mode and policy year Expenses Based on past actual expenses, expressed as unit costs per in-force policy and percentage of premiums. Assumed to be invested in Japanese Government bonds (JGB) matched to the duration of liabilities (*). The JGB yield used is the yield as of the valuation date of the EV (at the end of fiscal year) as follows: Investment yield on new money FY2007: 10yrs 1.25%; 20yrs 2.10%; 30yrs 2.40%; 40yrs 2.53% FY2008: 10yrs 1.37%; 20yrs 1.96%; 30yrs 2.11%; 40yrs 2.13% Effective tax rate Based on actual experience (36.14%) Solvency Margin Ratio Assumed to maintain a solvency margin ratio of 600%. Set by adding a risk premium of 6% to the risk free interest rate (the 20-year JGB Yield). Risk discount rate FY2007: Risk-free interest rate (2.10%)+6%Ǟ8% FY2008: Risk-free interest rate (1.96%)+6%Ǟ8% *Note: Average investment yield is approximately 2.1%.

New money is assumed to be invested in JGBs matched to the duration of liabilities.

The risk discount rate has been set by adding a risk premium of 6% to the risk free rate (the 20-year JGB yield). The risk premium has not been changed between FY2007 and FY2008. The Tokio Marine Group set a risk premium of 6.0% as the required level for its domestic life insurance business.

4. Effects of Changes in Assumptions The table below shows the change in EV at March 31, 2009 arising from changes to assumptions:

(Yen in billions)

Change in Assumptions Effect on EV EV Amount Set 1.1 times the insurable mortality and morbidity rate (19.3) 338.9 Set 1.1 times the surrender rate (0.6) 357.7 Set 1.1 times the expense (5.9) 352.4 Investment yield (yield of JGB) up 0.25%* 5.5 363.9 Investment yield (yield of JGB) down 0.25%* (5.4) 352.9 Set solvency margin ratio at 500% 1.5 359.9 Set solvency margin ratio at 700% (2.0) 356.3 Reduce risk premium by 2.0% (with 6% discount rate) 47.6 406.0 Reduce risk premium by 1.0% (with 7% discount rate) 21.8 380.2 Raise risk premium by 1.0% (with 9% discount rate) (18.7) 339.5 Raise risk premium by 2.0% (with 10% discount rate) (35.0) 323.3 *Note: Based on the assumption that only investment yield is changed without changes in the risk discount rate.

The change in assumed investment yield is set based on the assumption that it is affected by increase/decrease in JGB yield (risk free market interest rate). Also, the increase/decrease in unrealized gains/losses arising from the change in interest rate is taken into consideration. For the purpose of the above increase/decrease, the EV has been re-calculated on the basis that risk discount rate is unchanged.

The risk discount rate is dependent on market interest rates and on the risk premium. For the purpose of the above sensitivities, the EV has been re-calculated on the basis that the risk premium changes without any change in market interest rates (investment yield). WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 108 Tokio Marine Holdings, Inc. 2009 Annual Report 5. Analysis of Movement of EV

(Yen in billions)

FY2008 FY2007 Year-on-year change Value of new business 0.2 3.7 (3.4) Release of the discounted value of in-force business 21.6 19.3 2.3 Variances between experience and assumptions (1.9) 0.8 (2.8) Effect of changes in investment yields (8.7) 1.8 (10.6) Effect of changes in assumptions (17.8) 1.9 (19.8) Others 0.6 1.3 (0.7) Total (6.0) 29.1 (35.1)

The change in EV consists of two major components, the value of new business (new businesses issued in FY2008) and others.

(1) Value of new business The value of new business written for FY2008 was 0.2 billion yen, a decrease of 3.4 billion yen from the previous fiscal year. For FY2008, the profitability decreased due to revised assumptions such as new business written-related mortality & morbidity rates and surrender & lapse rates, and the gains from investments also dropped due to declined ultra long-term JGB yield. The amount of losses related to those negative factors exceeded that of profits in the sales increase of new policies, and accordingly the value of new business declined.

(2) Changes other than value of new business In FY2008, the effect of changes in assumptions such as mortality & morbidity rates and surrender & lapse rates was negative 17.8 billion yen, a deterioration of 19.8 billion yen from the previous fiscal year. The effect of changes in investment yields was also negative 8.7 billion yen, a deterioration of 10.6 billion yen from the previous fiscal year.

6. Review by Independent Actuarial Firm To ensure the validity and appropriateness of the EV evaluation, Tokio Marine & Nichido Life engaged an external actuarial consulting firm with expertise and knowledge in the area of EV valuations.

7. Instruction As the EV is calculated based on the assumptions including future prospects with risk and uncertainty, actual future results can differ largely from the assumptions used in EV calculation. Also, since the actual market capital is determined by investors’ judgment based on a number of information, EV can significantly differ from it. Therefore, sufficient consideration needs to be made in using EV.

05 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 109 PERFORMANCE05

Embedded Value for Tokio Marine & Nichido Financial Life 1. EV as of March 31, 2009 EV as of March 31, 2009 was 44.0 billion yen in total: net asset value of 46.2 billion yen and value of in-force business of negative 2.2 billion yen.

(Yen in billions)

FY2008 FY2007 FY2006 Net asset value 46.2 40.3 31.6 Value of in-force business (2.2) 53.9 67.1 EV as at the end of the fiscal year 44.0 94.3 98.7 Value of new business (2.7) 2.6 14.1

2. Change in EV and ROE EV as of March 31, 2009 (excluding the capital increase during the term) decreased by 50.2 billion yen from that as of March 31, 2008 (the change in EV: negative 50.2 billion yen), while ROE was negative 72.7%.

(Yen in billions)

FY2008 FY2007 FY2006 Change in EV (excluding the capital increase during the term) (50.2) (14.4) 17.8 Average EV 69.1 96.5 79.8 ROE Note (72.7)% (14.9)% 22.3% Note: ROE=Change in EV (excluding the capital increase during the term)/Average EV

The change in EV from March 31, 2008 to March 31, 2009 (excluding the capital increase during the term) decreased by 35.8 billion yen, compared with that from March 31, 2007 to March 31, 2008. However, when “Variances between actual performance and assumptions on investment” and “Effect of changes in assumptions” were excluded, the change in EV from March 31, 2008 to March 31, 2009 was negative 6.2 billion yen, a decrease of 13.2 billion yen compared with that from March 31, 2007 to March 31, 2008.

Reference

(Yen in billions) FY2008 FY2007 FY2006 Change in EV Note (6.2) 6.9 12.2 Note: Excluding the capital increase during the term, variances between actual performance and assumptions on investment and effect of changes in assumptions.

3. Major Assumptions The major assumptions used in calculating the value of in-force business at March 31, 2009 were as follows: Assumptions Basis of assumptions Mortality rate Based on past claim payment performance by insurance type, policy year, etc. Surrender rate Based on past surrender performance by insurance type, payment method and policy year Expense Based on past actual expenses, expressed as unit costs per in-force policy Investment earnings ratio for Based on earnings ratio of portfolio (stock fund, bond fund and money fund) by insurance policy type separate accounts Effective tax rate Based on actual experience (36.2%) Solvency margin ratio Assumed to maintain a solvency margin ratio of 600% Risk discount rate Set by adding a risk premium of 6% to the risk free interest rate (the 20-year JGB Yield) FY2007:Risk-free interest rate (2.10%)+6%Ǟ8% FY2008: Risk-free interest rate (1.96%)+6%Ǟ8%

Investment earnings ratio for separate accounts is set by insurance policy type, 4% of stock fund, 1.444% of bond fund and 0.1% of money fund.

The risk discount rate has been set by adding a risk premium of 6% to the risk free interest rate (the 20-year JGB yield). The risk premium has not been changed between FY2007 and FY2008. The Tokio Marine Group set a risk premium of 6.0% as the required level for its domestic life insurance business. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 110 Tokio Marine Holdings, Inc. 2009 Annual Report 4. Effects of Changes in Assumptions The table below shows the change in EV at March 31, 2009 arising from changes to assumptions:

(Yen in billions)

Change in Assumptions Effect on EV EV Amount Set 1.1 times the insurable mortality rate (0.9) 43.0 Set 1.1 times the surrender rate 0.3 44.3 Set 1.1 times the expense (1.1) 42.8 If the balance of actual cash value of separate accounts is instantly increased by 10% 17.3 61.4 If the balance of actual cash value of separate accounts is instantly reduced by 10% (19.1) 24.9 Set solvency margin ratio at 500% 2.0 46.1 Set solvency margin ratio at 700% (2.2) 41.7 Reduce risk premium by 2.0% (with 6% discount rate) 1.5 45.5 Reduce risk premium by 1.0% (with 7% discount rate) 0.7 44.7 Raise risk premium by 1.0% (with 9% discount rate) (0.7) 43.2 Raise risk premium by 2.0% (with 10% discount rate) (1.4) 42.5

Any increase or reduction in discount rate is in tandem with the fluctuations in market interest rates and increases or reductions in the risk premium rate. However, in this case, the market interest rate is fixed and the effect is calculated based on the fluctuation of the risk premium.

5. Factors for the Change in EV

(Yen in billions)

FY2008 FY2007 Year-on-year change Capital increase during the term — 10.0 (10.0) Value of new business (2.7) 2.6 (5.3) Release of the discounted value of in-force business 4.4 6.6 (2.2) Variances between actual performance and assumptions on investment (42.4) (21.5) (20.8) Variances between actual performance and assumptions on others (0.0) (1.4) 1.3 Effect of reinsurance (7.9) (0.8) (7.0) Effect of changes in assumptions (1.5) 0.1 (1.7) Total (50.2) (4.4) (45.8) (Excluding capital increase during the term) (50.2) (14.4) (35.8)

The change in EV, excluding capital increase during the term, consists of two major components, the value of new business and others.

(1) Value of new business The value of new business written for FY2008 was negative 2.7 billion yen, down by 5.3 billion yen from the previous fiscal year. This was 05 mainly because the hedge costs for minimum guarantee risks related to new business written for FY2008 increased in the latter half of FY2008 when the investment environment rapidly worsened due to financial turmoil.

(2) Changes other than Value of new business Actual performance on investment was 42.4 billion yen lower than the assumptions, which was due to the projected decrease in M&E to be earned in the future in proportion to the total amount of net assets of the separate accounts, resulting from the fact that the actual performance of the separate accounts fell short of the assumptions due to rapid worsening of the investment environment caused by financial turmoil. Effect of reinsurance for FY2008 was negative 7.9 billion yen, which was because reinsurance premium rate for the policies ceded in this fiscal year was higher than expected at the beginning in total. Release of the discounted value of in-force business for FY2008 was 4.4 billion yen, a decrease of 2.2 billion yen from the previous fiscal year, along with the decreased value of in-force business as of the beginning of FY2008. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 111 PERFORMANCE05

6. Instruction As EV is calculated based on the assumptions including future prospects with risk and uncertainty, actual future results can differ largely from the assumptions used in EV calculation. Also, since the actual market capital is determined by investors’ judgment based on a number of information, EV can significantly differ from it. Therefore, sufficient consideration needs to be made in using EV.

Statutory Reserve

Property and casualty insurance

ቢ Tokio Marine & Nichido Fire Insurance Co., Ltd.

(Yen in millions)

Year ended March 31, 2009 Year ended March 31, 2008 Catastrophe loss reserve 911,148 937,307 Price fluctuation reserve 53,462 115,628

ባ Nisshin Fire & Marine Insurance Co., Ltd.

(Yen in millions)

Year ended March 31, 2009 Year ended March 31, 2008 Catastrophe loss reserve 52,511 54,602 Price fluctuation reserve 272 4,108

Life insurance

ቢ Tokio Marine & Nichido Life Insurance Co., Ltd.

(Yen in millions)

Year ended March 31, 2009 Year ended March 31, 2008 Contingency reserve 22,959 21,717 Price fluctuation reserve 2,688 2,235

ባ Tokio Marine & Nichido Financial Life Insurance Co., Ltd.

(Yen in millions)

Year ended March 31, 2009 Year ended March 31, 2008 Contingency reserve 20,452 24,833 Price fluctuation reserve 26 17 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 112 Tokio Marine Holdings, Inc. 2009 Annual Report 06CORPORATE DATA

Stock Information 114

List of Directors and Corporate Auditors 117

Organizational Chart 122

Tokio Marine Holdings and Its Subsidiaries 123

Major Subsidiaries 124

History of the Tokio Marine Group 125

Worldwide Network of the Tokio Marine Group 126

0606 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 113 CORPORATE06 DATA

Stock Information

Stock Information (As of March 31, 2009) Stock issued by Tokio Marine Holdings is common stock and the total number of authorized shares is 3.3 billion shares with the total number of shares outstanding at 804,524,375 shares (including treasury shares) as of March 31, 2009. a. The Ordinary General Meeting of Shareholders is held within three months of the end of each ﬁ scal year. b. Accounting period: Ends March 31 c. Share registrar: The Mitsubishi UFJ Trust and Banking Corporation d. Record date: Ordinary General Meeting of Shareholders: March 31 Year-end dividend: March 31 Interim dividend: September 30 e. Public notice will be electronically published. However, in the event that public notice cannot be electronically published due to an accident or other compelling reason, a notiﬁ cation shall be published in the Tokyo issue of the Nihon Keizai Shimbun. f. Number of shares constituting one unit: 100 g. Stock/security exchange listings: Tokyo Stock Exchange (First Section), Osaka Securities Exchange (First Section)

Matters for the General Meeting of Shareholders The 7th Ordinary General Meeting of Shareholders was held on June 29, 2009. The items reported and the proposals acted upon were as follows:

(Items reported) 1. Business report, consolidated fi nancial statements and the audit reports on consolidated fi nancial statements prepared by the independent auditor and the Board of Corporate Auditors, respectively, for the fi scal year ended March 31, 2009 (April 1, 2008 to March 31, 2009) 2. Non-consolidated fi nancial statements for the fi scal year ended March 31, 2009 (April1, 2008 to March 31, 2009)

(Proposals acted upon) 1. Appropriation of Surplus 2. Amendment to the Articles of Incorporation 3. Election of Eleven (11) Directors 4. Election of One (1) Corporate Auditor

The proposals have been approved as proposed.

Stock Ownership Distribution As of March 31, 2009, the number of shareholders was 105,143. The percentage of major stock ownership was: ﬁ nancial institutions: 41.00%, foreign shareholders: 33.59%. a. Types of shareholder (As of March 31, 2009) Number of shareholder(s) Number of shares held Shareholding ratio (%) Government/Local government 2 1,000 0.00 Financial institutions 271 329,827,473 41.00 Financial instruments ﬁ rms 58 4,308,010 0.54 Other domestic companies 2,168 70,704,333 8.79 Foreign shareholders 760 270,211,817 33.59 Individuals and others 101,883 112,510,303 13.98 Treasury stocks 1 16,961,439 2.11 Total 105,143 804,524,375 100.00 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 114 Tokio Marine Holdings, Inc. 2009 Annual Report b. Breakdown by region (As of March 31, 2009) Region Number of shareholder(s) Shareholders’ ratio (%) Number of shares held Shareholding ratio (%) Hokkaido 1,465 1.39 5,193,413 0.65 Tohoku 2,407 2.29 4,029,677 0.50 Kanto 47,826 45.49 460,315,272 57.22 Chubu 16,596 15.78 22,324,396 2.77 Kinki 24,600 23.40 30,884,662 3.84 Chugoku 4,342 4.13 4,121,032 0.51 Shikoku 2,870 2.73 4,643,125 0.58 Kyushu 4,262 4.05 7,825,181 0.97 Overseas and others 775 0.74 265,187,617 32.96 Total 105,143 100.00 804,524,375 100.00 c. Breakdown by number of shares held (As of March 31, 2009) 5,000 units 1,000 units 500 units or 100 units or 50 units or 10 units or 5 units or 1 unit or Less than 1 unit Total Category or more or more more more more more more more Number of shareholder(s) 193 284 166 1,446 3,141 26,196 23,480 30,893 19,344 105,143 Composition ratios to total number of shareholders (%) 0.18 0.27 0.16 1.38 2.99 24.91 22.33 29.38 18.40 100.00 Number of shares 615,011,828 63,335,426 11,467,422 25,821,580 20,268,435 49,182,194 13,044,711 5,650,948 741,831 804,524,375 Composition ratios to total number of shares (%) 76.44 7.87 1.43 3.21 2.52 6.11 1.62 0.70 0.09 100.00

Major shareholders

(As of March 31, 2009) Composition Number of ratios to Shareholders Address shares held total number (thousand shares) of shares (%) Japan Trustee Services Bank, Ltd. (Trust Account) 8-11, Harumi 1-chome, Chuo-ku, Tokyo 46,973 5.8 Japan Trustee Services Bank, Ltd. (Trust Account 4G) 8-11, Harumi 1-chome, Chuo-ku, Tokyo 44,765 5.6 The Master Trust Bank of Japan, Ltd. (Trust Account) 11-3, Hamamatsucho 2-chome, Minato-ku, Tokyo 44,275 5.5 Moxley & Co. 4 New York Plaza, 13th Floor, New York, N.Y. U.S.A. (Custodian: The Bank of Tokyo-Mitsubishi UFJ, Ltd.) (7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo) 23,691 2.9 Meiji Yasuda Life Insurance Company 1-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo (Custodian: Trust & Custody Services Bank, Ltd.) ( Harumi Island Triton Square offi ce tower Z, 8-12, Harumi 1-chome, Chuo-ku, Tokyo) 20,498 2.5 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 15,695 2.0 Trust & Custody Services Bank, Ltd. as a trustee for Harumi Island Triton Square offi ce tower Z, Mizuho Trust Retirement Benefi ts Trust Account for 8-12, Harumi 1-chome, Chuo-ku, Tokyo Mitsubishi Heavy Industries, Ltd 14,074 1.7 State Street Bank and Trust Company 505225 P. O. Box 351 Boston, Massachusetts, U.S.A. (Custodian: Mizuho Corporate Bank, Ltd.) (6-7, Nihombashi Kabutocho, Chuo-ku, Tokyo) 12,307 1.5 The Master Trust Bank of Japan, Ltd. Retirement Benefi ts 11-3, Hamamatsucho 2-chome, Minato-ku, Tokyo 06 Trust Account for Asahi Glass Co., Ltd. 11,630 1.4 The Master Trust Bank of Japan, Ltd. Retirement Benefi ts 11-3, Hamamatsucho 2-chome, Minato-ku, Tokyo Trust Account for Mitsubishi Corporation 10,832 1.3 Total — 244,743 30.4 Notes: 1. Moxley & Co. is the corporate nominee holder of common stock deposited for the issuance of ADRs. 2. Tokio Marine Holdings holds 16,961 thousand shares of treasury stock but is not included in “Shareholders” column in the table. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 115 CORPORATE06 DATA

Resolution Regarding Share Repurchases In order to implement fl exible fi nancial policies, our Articles of Incorporation provides that “The Company may, by resolution of the Board of Directors, acquire its own shares pursuant to Article 165, paragraph 2 of the Companies Act.” Share repurchases made after the 6th Ordinary General Meeting of Shareholders and up to the 7th Ordinary General Meeting of Shareholders pursuant to resolutions of the Board of Directors in accordance with our Articles of Incorporation were as follows: Number of common stock repurchased: 14,682,100 shares Aggregate purchase prices of shares: ¥49,999,835 thousand Reason for the repurchases: To implement fl exible fi nancial policies

Dividend Policy With respect to the appropriation of surplus, the Company seeks to improve shareholder returns by distributing stable dividends on its common stock and by repurchasing its own shares after taking into consideration the business results and expected future environment of the Company, subject to the Company having provided suffi cient capital to meet the business needs of the Tokio Marine Group. In accordance with the above policy, and in consideration of various factors, the Company proposed and was approved to pay 24 yen per share of common stock of the Company as year-end cash dividends. As 24 yen per share was paid as an interim cash dividend, the amount of total annual cash dividends was 48 yen per share for the fi scal year ended March 31, 2009, the same amount paid for the previous fi scal year. Additionally, the Company proposed and was approved to set aside 80.0 billion yen as general reserve.

Capital

Date Equity capital April 2, 2002 ¥150 billion March 31, 2009 ¥150 billion

External/Internal Audit Tokyo Marine Holdings is subject to inspections conducted by the Financial Services Agency of Japan pursuant to Article 271-28 of the Insurance Business Law. The Company is also subject to an external audit conducted by PricewaterhouseCoopers Aarata, the Company’s independent auditor, pursuant to the Companies Act and the Financial Instruments and Exchange Law. Additionally, the Company is subject to a statutory audit conducted by Corporate Auditors in accordance with the Companies Act and an internal audit performed by the Internal Audit Department. The internal audit is performed based on the “Internal Auditing Rules” that have been approved by the Board of Directors. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 116 Tokio Marine Holdings, Inc. 2009 Annual Report List of Directors and Corporate Auditors

Directors

(As of July 1, 2009) Name Title (Date of birth) Biography Responsibilities Chairman of Kunio Ishihara April 1966 Joined Tokio Marine the Board (October 17, 1943) June 1995 Director and General Manager of Hokkaido Regional Headquarters of Tokio Marine June 1998 Managing Director and General Manager of Hokkaido Regional Headquarters of Tokio Marine July 1998 Managing Director and General Manager of Hokkaido Division of Tokio Marine June 1999 Managing Director of Tokio Marine June 2000 Senior Managing Director of Tokio Marine June 2001 President of Tokio Marine April 2002 President of Millea Holdings Oct. 2004 President of Tokio Marine & Nichido June 2007 Chairman of the Board of Tokio Marine & Nichido (to present) June 2007 Chairman of the Board of Millea Holdings July 2008 Chairman of the Board of Tokio Marine Holdings (to present) President & Shuzo Sumi April 1970 Joined Tokio Marine Representative (July 11, 1947) June 2000 Director and Chief Representative in London, Overseas Division of Tokio Marine Director July 2001 Director, General Manager and Chief Representative in London, Overseas Division of Tokio Marine June 2002 Managing Director of Tokio Marine Oct. 2004 Managing Director of Tokio Marine & Nichido June 2005 Senior Managing Director of Tokio Marine & Nichido Dec. 2005 Senior Managing Director and General Manager of Drastic Reform Promotion Dept. of Tokio Marine & Nichido June 2006 Senior Managing Director of Tokio Marine & Nichido June 2007 President of Tokio Marine & Nichido (to present) June 2007 President of Millea Holdings July 2008 President of Tokio Marine Holdings (to present) (Representation of other companies: President of Tokio Marine & Nichido) Executive Toshiro Yagi April 1971 Joined Tokio Marine Assistant to Vice President (November 1, 1947) June 2001 Director and General Manager of Chemical Industry Promotion Dept., the President; & Tokyo Corporate Business Division I of Tokio Marine In charge of Representative Oct. 2001 Director and General Manager of Corporate Planning Dept. of Tokio Marine Corporate Planning Director June 2002 Director and General Manager of Corporate Planning Dept. of Tokio Marine Dept. (excluding June 2003 Managing Director of Tokio Marine Internal Control June 2003 Director of Millea Holdings Group), Personnel Oct. 2004 Managing Director of Tokio Marine & Nichido Planning Dept. June 2005 Managing Director and General Manager of Corporate Planning Dept. of and Legal Dept.; Tokio Marine & Nichido Assistant to June 2006 Retired from his position as Managing Director of Tokio Marine & Nichido the Directors June 2006 Senior Managing Director of Millea Holdings in charge of June 2007 Executive Vice President of Millea Holdings Compliance Dept., July 2008 Executive Vice President of Tokio Marine Holdings (to present) Risk Management Dept. and Internal Audit Dept. Executive Daisaku Honda May 1972 Joined Tokio Marine Assistant to Vice President (September 28, 1949) June 2002 Director and General Manager of New Financial Markets Dept., Investment and the President; & Financial Services Division of Tokio Marine In charge of Representative Oct. 2004 Director and General Manager of New Financial Markets Dept. of Corporate Planning Director Tokio Marine & Nichido Dept. (Internal June 2005 Managing Director of Tokio Marine & Nichido Control Group), June 2007 Senior Managing Director of Tokio Marine & Nichido Corporate June 2008 Retired from his position as Senior Managing Director of Accounting Dept., Tokio Marine & Nichido Business June 2008 Senior Managing Director of Millea Holdings Development and July 2008 Senior Managing Director of Tokio Marine Holdings Support Dept., June 2009 Executive Vice President of Tokio Marine Holdings (to present) Compliance Dept., Risk Management Dept. and Internal Audit Dept.

06 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 117 CORPORATE06 DATA

Directors

(As of July 1, 2009) Name Title (Date of birth) Biography Responsibilities Senior Hiroshi Amemiya April 1973 Joined Tokio Marine In charge of Managing (October 2, 1950) June 2002 Director and General Manager of Nagoya Production Dept. III, Financial Planning Director Tokai Division of Tokio Marine Dept. June 2003 Director and General Manager of Corporate Planning Dept. of Tokio Marine Oct. 2004 Director and General Manager of Corporate Planning Dept. of Tokio Marine & Nichido June 2005 Managing Director of Tokio Marine & Nichido June 2005 Director of Millea Holdings June 2007 Managing Director and General Manager of Financial Planning Dept. of Tokio Marine & Nichido Aug. 2007 Managing Director of Tokio Marine & Nichido June 2008 Senior Managing Director of Tokio Marine & Nichido (to present) June 2008 Senior Managing Director of Millea Holdings July 2008 Senior Managing Director of Tokio Marine Holdings (to present) (Representation of other companies: Senior Managing Director of Tokio Marine & Nichido) Senior Shin-Ichiro Okada April 1973 Joined Tokio Marine Overall supervision Managing (July 7, 1950) June 2005 Director and General Manager of Commercial Lines Underwriting Dept. of of international Director Tokio Marine & Nichido insurance business; June 2007 Director of Tokio Marine & Nichido General Manager June 2007 Managing Director of Millea Holdings of International June 2008 Managing Director and General Manager of International Business Development Business Dept. of Millea Holdings Development Dept. June 2008 Managing Director of Tokio Marine & Nichido (Management of June 2009 Senior Managing Director of Tokio Marine & Nichido (to present) the North American, June 2009 Senior Managing Director and General Manager of International Business European and Development Dept. of Tokio Marine Holdings (to present) Middle Eastern regions and reinsurance operations) Director Minoru Makihara March 1956 Joined Mitsubishi Corporation (January 12, 1930) June 1986 Director of Mitsubishi Corporation June 1988 Managing Director of Mitsubishi Corporation June 1990 Senior Managing Director of Mitsubishi Corporation June 1992 President of Mitsubishi Corporation June 1993 Director of Tokio Marine (outside director) — April 1998 Chairman of the Board of Directors of Mitsubishi Corporation April 2002 Retired from position as Director of Tokio Marine (outside director) April 2002 Director of Millea Holdings (outside director) April 2004 Director and Senior Corporate Advisor of Mitsubishi Corporation June 2004 Senior Corporate Advisor of Mitsubishi Corporation (to present) July 2008 Director of Tokio Marine Holdings (to present) Director Masamitsu Sakurai April 1966 Joined Ricoh Company, Ltd. (January 8, 1942) June 1992 Director of Ricoh Company, Ltd. June 1994 Managing Director of Ricoh Company, Ltd. March 1995 Managing Director and General Manager, Research & Development Group of Ricoh Company, Ltd. Jan. 1996 Managing Director and General Manager, Business Development Center of Ricoh Company, Ltd. April 1996 President of Ricoh Company, Ltd. — April 2002 Director of Millea Holdings (outside director) June 2005 Representative Director and President of Ricoh Company, Ltd. April 2007 Representative Director and Chairman of the Board of Ricoh Company, Ltd. (to present) July 2008 Director of Tokio Marine Holdings (to present) (Representation of other companies: Representative Director and Chairman of the Board of Ricoh Company, Ltd.) WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 118 Tokio Marine Holdings, Inc. 2009 Annual Report Directors

(As of July 1, 2009) Name Title (Date of birth) Biography Responsibilities Director Tomochika Iwashita July 1969 Joined Tokio Marine (November 14, 1946) June 1998 Director and General Manager of Automobile Industry Production Dept. II of Tokio Marine July 1998 Director and General Manager of Automobile Industry Production Dept. II, Tokyo Automobile Division of Tokio Marine June 1999 Director and General Manager of Corporate Planning Dept. of Tokio Marine April 2000 Managing Director and General Manager of Corporate Planning Dept. of Tokio Marine June 2000 Managing Director of Tokio Marine Sept. 2000 Director of Tokio Marine Dec. 2000 Retired from his position as Director of Tokio Marine June 2002 Managing Director of Tokio Marine — July 2002 Managing Director and General Manager of Public & Institutional Business Division of Tokio Marine June 2003 Senior Managing Director and General Manager of Public & Institutional Business Division of Tokio Marine Oct. 2004 Senior Managing Director of Tokio Marine & Nichido June 2005 Executive Vice President of Tokio Marine & Nichido June 2005 Director of Millea Holdings June 2006 Retired from his position as Executive Vice President of Tokio Marine & Nichido June 2006 President of Tokio Marine & Nichido Life (to present) July 2008 Director of Tokio Marine Holdings (to present) (Representation of other companies: President of Tokio Marine & Nichido Life) Director Hiroshi Miyajima April 1974 Joined Nisshin Fire (May 4, 1950) June 2000 Director and General Manager, General Planning Dept. of Nisshin Fire April 2001 Director and General Manager, Personnel & General Affairs Dept. of Nisshin Fire April 2002 Director and General Manager, Personnel Dept. of Nisshin Fire April 2003 Managing Director and Deputy General Manager, Production Promotion Headquarters of Nisshin Fire June 2003 Senior Managing Director and Deputy General Manager, Production Promotion Headquarters of Nisshin Fire — April 2004 Senior Managing Director and General Manager, Production Promotion Headquarters of Nisshin Fire April 2005 President and General Manager, Marketing Promotion Headquarters of Nisshin Fire June 2006 Director of Millea Holdings April 2007 President of Nisshin Fire (to present) July 2008 Director of Tokio Marine Holdings (to present) (Representation of other companies: President of Nisshin Fire) Director Kunio Ito April 1980 Assistant Professor, Faculty of Commerce and Management, Hitotsubashi University (December 13, 1951) April 1984 Associate Professor, Faculty of Commerce and Management, Hitotsubashi University April 1992 Professor, Faculty of Commerce and Management, Hitotsubashi University Aug. 2002 Dean, Graduate School of Commerce and Management/Faculty of Commerce and Management, Hitotsubashi University June 2004 Corporate Auditor of Tokio Marine (Outside Corporate Auditor) Oct. 2004 Corporate Auditor of Tokio Marine & Nichido (Outside Corporate Auditor) — Dec. 2004 Board Member/Executive Vice President of Hitotsubashi University Dec. 2006 Professor, Graduate School of Commerce and Management, Hitotsubashi University (to present) June 2009 Retired from his position as Corporate Auditor of Tokio Marine & Nichido (Outside Corporate Auditor) June 2009 Director of Tokio Marine Holdings (to present)

Note: Messrs. Minoru Makihara and Masamitsu Sakurai and Dr. Kunio Ito qualify as outside directors as prescribed by Article 2, Item 15 of the Companies Act.

06 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 119 CORPORATE06 DATA

Executive Ofﬁ cers

(As of July 1, 2009) Name Title (Date of birth) Biography Responsibilities President Shuzo Sumi Please refer to “Directors” column Executive Toshiro Yagi Please refer to “Directors” column Vice President Executive Daisaku Honda Please refer to “Directors” column Vice President Senior Hiroshi Amemiya Please refer to “Directors” column Managing Executive Offi cer Senior Shin-Ichiro Okada Please refer to “Directors” column Managing Executive Offi cer Managing Hiroshi Endo April 1975 Joined Tokio Marine In charge of Executive (May 31, 1952) June 2005 Director and General Manager of Corporate Accounting Dept. of International Offi cer Tokio Marine & Nichido Business June 2006 Director and General Manager in charge of Asia region of Tokio Marine & Nichido Development Dept. June 2008 Retired from his position as Director of Tokio Marine & Nichido (management of June 2008 Managing Director of Millea Holdings Asian, Oceanian July 2008 Managing Director of Tokio Marine Holdings and South and June 2009 Managing Executive Offi cer of Tokio Marine Holdings (to present) Central American regions) Executive Masashi Oba April 1978 Joined Tokio Marine General Manager Offi cer (February 13, 1955) June 2007 Director and General Manager of Corporate Accounting Dept. of of Corporate Tokio Marine & Nichido (to present) Accounting Dept. June 2009 Executive Offi cer and General Manager of Corporate Accounting Dept. of Tokio Marine Holdings (to present) Executive Hirotsugu Umeki April 1975 Joined Tokio Marine General Manager Offi cer (January 9, 1953) June 2009 Executive Offi cer and General Manager of International Business Development Dept. of International of Tokio Marine Holdings (to present) Business Development Dept. Executive Kunihiko Fujii April 1978 Joined Tokio Marine General Manager Offi cer (June 18, 1955) June 2009 Executive Offi cer and General Manager of International Business Dept. of of International Tokio Marine Holdings (to present) Business Development Dept. Executive Jinpei Yamaguchi April 1979 Joined Tokio Marine General Manager Offi cer (January 9, 1957) June 2009 Executive Offi cer and General Manager of Financial Planning Dept. of of Financial Tokio Marine & Nichido Planning Dept. June 2009 Executive Offi cer and General Manager of Financial Planning Dept. of Tokio Marine Holdings (to present) July 2009 Executive Offi cer and General Manager of Investment Dept.1 of Tokio Marine & Nichido (to present) WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 120 Tokio Marine Holdings, Inc. 2009 Annual Report Corporate Auditors

(As of July 1, 2009) Name Title (Date of birth) Biography Responsibilities Standing Yasuo Yaoita May 1970 Joined Tokio Marine Corporate (November 13, 1947) June 2000 Director and General Manager of Corporate Planning Dept. of Tokio Marine Auditor Oct. 2001 Director and General Manager, Corporate Planning Dept. of Tokio Marine April 2002 Retired from his position as Director of Tokio Marine April 2002 Managing Director and General Manager of Corporate Planning Dept. of Millea Holdings April 2003 Managing Director and General Manager of Merger Promotion Dept. of Millea Holdings — Oct. 2004 Managing Director of Millea Holdings June 2005 Senior Managing Director of Millea Holdings June 2006 Standing Corporate Auditor of Tokio Marine & Nichido June 2006 Retired from his position as Senior Managing Director of Millea Holdings June 2007 Retired from his position as Standing Corporate Auditor of Tokio Marine & Nichido June 2007 Standing Corporate Auditor of Millea Holdings July 2008 Standing Corporate Auditor of Tokio Marine Holdings (to present) Standing Tetsuo Kamioka April 1967 Joined Nichido Fire Corporate (September 3, 1948) June 2000 Director and General Manager of Marketing & Sales Promotion Dept. of Nichido Fire Auditor April 2001 Director and General Manager of Agency Dept. of Nichido Fire April 2002 Director and General Manager of Tokyo Production Dept. and General Manager of Tokyo Production Dept. (Tokyo Chuo Branch) of Nichido Fire June 2002 Managing Director and General Manager of Tokyo Production Dept. and General Manager of Tokyo Production Dept. (Tokyo Chuo Branch) of Nichido Fire — March 2003 Retired from his position as Managing Director of Nichido Fire April 2003 President of Nichido Life Oct. 2003 Senior Managing Director of Tokio Marine & Nichido Life June 2005 Retired from his position as Senior Managing Director of Tokio Marine & Nichido Life June 2005 Standing Corporate Auditor of Millea Holdings July 2008 Standing Corporate Auditor of Tokio Marine Holdings (to present) Corporate Shigemitsu Miki April 1958 Joined The Mitsubishi Bank, Ltd. Auditor (April 4, 1935) June 1986 Director of The Mitsubishi Bank, Ltd. June 1989 Managing Director of The Mitsubishi Bank, Ltd. June 1994 Senior Managing Director of The Mitsubishi Bank, Ltd. April 1996 Senior Managing Director of The Bank of Tokyo-Mitsubishi, Ltd. May 1997 Deputy President of The Bank of Tokyo-Mitsubishi, Ltd. June 2000 President of The Bank of Tokyo-Mitsubishi, Ltd. June 2000 Corporate Auditor of Tokio Marine April 2001 President of Mitsubishi-Tokyo Financial Group, Inc. — April 2002 Retired from his position as Corporate Auditor of Tokio Marine April 2002 Corporate Auditor of Millea Holdings June 2004 Chairman of The Bank of Tokyo-Mitsubishi, Ltd. June 2004 Director of Mitsubishi-Tokyo Financial Group, Inc. Oct. 2005 Director of Mitsubishi UFJ Financial Group, Inc. Jan. 2006 Chairman of The Bank of Tokyo-Mitsubishi UFJ, Ltd. June 2006 Retired from his position as Director of Mitsubishi UFJ Financial Group, Inc. April 2008 Senior Advisor of The Bank of Tokyo-Mitsubishi UFJ, Ltd. (to present) July 2008 Corporate Auditor of Tokio Marine Holdings (outside corporate auditor) (to present) Corporate Hiroshi Fukuda April 1960 Joined Ministry of Foreign Affairs of Japan Auditor (August 2, 1935) Jan. 1989 Director-General of Treaties Bureau and Director-General of Ofﬁ ce for the Law of the Sea, Ministry of Foreign Affairs Sept. 1990 Ambassador to Malaysia Aug. 1993 Deputy Minister of Foreign Affairs, Ministry of Foreign Affairs Aug. 1995 Retired from Ministry of Foreign Affairs — Sept. 1995 Justice of the Supreme Court of Japan Aug. 2005 Retired Justice of the Supreme Court of Japan Aug. 2005 Attorney-at-law (to present) June 2006 Corporate Auditor of Millea Holdings (outside corporate auditor) July 2008 Corporate Auditor of Tokio Marine Holdings (outside corporate auditor) (to present) Corporate Yuko Kawamoto April 1982 Joined The Bank of Tokyo, Ltd. Auditor (May 31,1958) Sept. 1988 Joined McKinsey & Company, Tokyo Ofﬁ ce Apr. 2004 Professor, Waseda Graduate School of Finance, Accounting and Law (to present) — June 2006 Corporate Auditor of Millea Holdings July 2008 Corporate Auditor of Tokio Marine Holdings (outside corporate auditor) (to present) 06

Note: Messrs. Shigemitsu Miki and Hiroshi Fukuda and Ms. Yuko Kawamoto qualify as outside corporate auditors as prescribed by Article 2, Item 16 of the Companies Act. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 121 CORPORATE06 DATA

Organizational Chart

(As of July 1, 2009)

General Meeting Corporate Planning Department of Shareholders Matters relating to business strategies and planning, CSR, corporate communications, IR, M&A, internal control and providing business administration and management assistance of domestic insurance subsidiaries of the Tokio Marine Group

Corporate International Business Development Department Auditors Matters relating to planning strategies for international business and providing business administration and management assistance of overseas subsidiaries of the Tokio Marine Group

Nomination Board of Committee Financial Planning Department Auditors Matters relating to asset management, planning and implementing strategies for financial services business and providing business Compensation administration and management assistance of subsidiaries operating financial services business of the Tokio Marine Group Committee Board of Corporate Accounting Department Directors Matters relating to financial reporting and taxes of Compliance the Tokio Marine Group Committee

Management Meeting Risk Management Business Development and Support Department Committee Matters relating to new business lines and providing business administration and management assistance of general business subsidiaries of the Tokio Marine Group

Directors Personnel Planning Department Matters relating to personnel strategies of the Tokio Marine Group

Legal Department Matters relating to general meeting of shareholders and board of directors

Compliance Department Matters relating to promoting compliance and information security management of the Tokio Marine Group

Risk Management Department Matters relating to integrated risk management of the Tokio Marine Group

Internal Audit Department Matters relating to internal audit of the Tokio Marine Group

Employees (As of March 31, 2009) Number of employees: 370 Average age of employees: 41.3 years old Average length of service of employees: 18.1 years Note: Most employees of Tokio Marine Holdings are seconded from its subsidiaries. Average length of service includes the years of service at these subsidiaries. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 122 Tokio Marine Holdings, Inc. 2009 Annual Report Tokio Marine Holdings and Its Subsidiaries

(As of March 31, 2009)

Description of Business Tokio Marine Holdings, Inc. is an insurance holding company established in April 2002. The Tokio Marine Group is engaged in the non-life insurance and life insurance businesses and the following are the primary Group companies.

Business Diagram*

Non-life Insurance Business

Property and casualty insurance business

Tokio Marine & Nichido Fire Insurance Co., Ltd. Nisshin Fire & Marine Insurance Co., Ltd. Philadelphia Indemnity Insurance Company Tokio Marine Global Ltd. Kiln Underwriting Limited Tokio Marine Insurance Singapore Ltd.* Tokio Marine Seguradora S.A.** Tokio Millennium Re Ltd.

Small-amount short-term insurance business

Millea Nihon Kousei SS Insurance Co., Ltd.

Tokio Marine Holdings, Inc. Other business

Philadelphia Consolidated Holding Corp. Kiln Group Limited*** Tokio Marine Asia Pte. Ltd. Asia General Holdings Limited

Life Insurance Business

Tokio Marine & Nichido Life Insurance Co., Ltd. Tokio Marine & Nichido Financial Life Insurance Co., Ltd. Tokio Marine Bluebell Re Limited TM Asia Life Singapore Ltd. TM Asia Life Malaysia Bhd. ̅ Sino Life Insurance Co., Ltd.

Other Business

Derivatives business

Tokio Marine Financial Solutions Ltd.

* Tokio Marine Insurance Singapore Ltd. is the new corporate name of TM Asia Insurance Singapore Ltd. as of July 1, 2008. Consolidated subsidiaries ** Tokio Marine Seguradora S.A. is the new corporate name of Real Seguros S.A. as of August 20, 2008. ̅ Equity-method affiliates *** Kiln Group Limited is the new corporate name of Kiln (UK) Holdings Limited as of January 19, 2009. WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 123 CORPORATE06 DATA

Major Subsidiaries

(As of March 31, 2009) Ratio of Tokio Ratio of Tokio Date of Marine Holdings’ Company name Paid-in capital Marine Holdings’ Location Major business incorporation subsidiaries’ voting rights (*1) voting rights (*2) Consolidated subsidiaries Tokio Marine & Nichido Fire Mar. 20, 1944 (Yen in millions) % % 2-1, Marunouchi 1-chome, Property and Insurance Co., Ltd. (*3) 101,994 100 0 Chiyoda-ku, Tokyo casualty insurance Nisshin Fire & Marine Insurance June 10, 1908 20,389 100 0 3, Kanda-Surugadai 2-chome, Property and Co., Ltd. Chiyoda-ku, Tokyo casualty insurance Tokio Marine & Nichido Life Aug. 6, 1996 55,000 100 0 3-16, Ginza 5-chome, Life insurance Insurance Co., Ltd. Chuo-ku, Tokyo Tokio Marine & Nichido Financial Aug. 13, 1996 48,000 100 0 ThinkPark Tower Life insurance Life Insurance Co., Ltd. 1-1, Osaki 2-chome, Shinagawa-ku, Tokyo Millea Nihon Kousei SS Insurance Sept. 1, 2003 1,595 89.5 0 2-1-1, Minatomirai 2-chome, Property and Co., Ltd. Nishi-ku, Yokohama, Kanagawa Pref. casualty insurance Philadelphia Consolidated July 6, 1981 US$ 0 100 One Bala Plaza, Suite 100 Property and Holding Corp. 1,000 Bala Cynwyd, PA 19004 USA casualty insurance Philadelphia Indemnity Insurance Feb. 4, 1927 US$ 0 100 One Bala Plaza, Suite 100 Property and Company 3,599,000 Bala Cynwyd, PA 19004 USA casualty insurance Tokio Marine Global Ltd. Oct. 30, 1990 £ 0 100 2 Minister Court, London EC3R Property and 125,000,000 7BB, UK casualty insurance Kiln Group Limited £ 0 100 106 Fenchurch Street, London, Property and July 11, 1994 1,000,000 EC3M 5NR, UK casualty insurance Kiln Underwriting Limited June 13, 1994 £ 0 100 106 Fenchurch Street, London, Property and 0 EC3M 5NR, UK casualty insurance Tokio Marine Bluebell Re Limited Mar. 8, 2007 (Yen in millions) 100 0 15-19 Athol Street, Douglas, Life insurance 14,000 Isle of Man, IM1 1LB Tokio Marine Asia Pte. Ltd. Mar. 12, 1992 S$ 100 0 6 Shenton Way, Property and 561,714,000 #23-08 DBS Building casualty insurance THB Tower Two, Singapore 068809 542,000,000 Asia General Holdings Limited Feb. 24, 1971 S$ 0 92.4 80 Anson Road, Fuji Xerox Property and 75,000,000 Towers, Singapore 079907 casualty insurance Tokio Marine Insurance July 11, 1923 S$ 0 100 80 Anson Road, Fuji Xerox Property and Singapore Ltd. 100,000,000 Towers, Singapore 079907 casualty insurance TM Asia Life Singapore Ltd. May 21, 1948 S$ 0 85.2 80 Anson Road, Fuji Xerox Life insurance 36,000,000 Towers, Singapore 079907 TM Asia Life Malaysia Bhd. Feb. 11, 1998 RM 0 100 Level 7, Menara TM Asia Life 189, Life insurance 100,000,000 Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia Tokio Marine Seguradora S.A. June 23, 1937 R. 100 0 R. Sampaio Viana, 44 CEP:04004- Property and 248,669,000 000 São Paulo, SP, Brazil casualty insurance Tokio Millennium Re Ltd. US$ 0 100 Tokio Millennium House, Property and Mar. 15, 2000 250,000,000 3 Waterloo Lane Pembroke HM 08 casualty insurance Tokio Marine Financial Solutions Ltd. Dec. 4, 1997 (Yen in millions) 0 100 The Ofﬁ ces of Maples and Other business 1,178 Calder Ugland House (Derivatives P.O. Box 309 South Church St. business) George Town Grand Cayman, Cayman Islands, British West Indies (and 42 other companies)

Afﬁ liates accounted for by the equity method Sino Life Insurance Co., Ltd. Mar. 4, 2002 Yuan 0 24.9 17th Floor, Life insurance 1,358,189,000 Xinhua Insurance Mansion No.171 Mintian Road, Futian CBD, Shenzhen, P. R. China (and 7 other companies) (*1) The ratio of voting rights of said subsidiaries held by Tokio Marine Holdings to total voting rights (*2) The ratio of voting rights of said subsidiaries held by Tokio Marine Holdings’ subsidiaries to total voting rights (*3) Founded on August 1, 1879 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 124 Tokio Marine Holdings, Inc. 2009 Annual Report History of the Tokio Marine Group

2001 January Tokio Marine and Nichido Fire agree to establish a joint holding company September Announces holding company name, business purpose, representative, location of head ofﬁ ce, stock transfer ratio, etc. 2002 April Lists shares of Millea Holdings, Inc. on the Tokyo Stock Exchange and the Osaka Securities Exchange (opening price: ¥970,000), and lists American Depositary Receipt (ADR) on NASDAQ. Establishes Millea Holdings, Inc. Holds its opening ceremony. November Announces medium- to long-term Group strategy December Establishes Millea Asia Pte. Ltd. Tokio Marine Group takes 30% stake in Taiwanese nonlife insurance company Newa Insurance Co., Ltd. via Millea Asia Pte. Ltd. 2003 February Establishes Millea Real-Estate-Risk Management, Inc. July Launches Tokio Marine & Nichido Career Service Co., Ltd. October Launches Tokio Marine & Nichido Life Insurance Co., Ltd. November Revises Millea Group’s medium- to long-term strategy Sino Life Insurance Co., Ltd., (owned 24.9% by the Millea Group) commences operation in Shanghai 2004 February Acquires all outstanding shares of Scandia Life Insurance Co., Ltd. via Tokio Marine & Fire Insurance Co., Ltd. (becomes a direct subsidiary of Millea Holdings in April 2004, changing its name to Tokio Marine & Nichido Financial Life Insurance Co., Ltd.) September Purchases 99.81% of the stock of Taiwanese non-life insurance company Allianz President General Insurance Co., Ltd. via Millea Asia October Launches Tokio Marine & Nichido Fire Insurance Co., Ltd. 2005 April The two general insurance companies in Taiwan under the umbrella of Millea Asia merge into a single entity, Tokio Marine Newa Insurance Co., Ltd. May Establishes Corporate governance policy July Tokio Marine takes a 100% and 50% stake in Brazilian nonlife insurance company Real Seguros S.A. and life insurance and annuity company Real Vida e Previdência S.A., respectively. October Makes Tokio Marine & Nichido Facilities, Inc. its subsidiary November Formulates Group’s long-term strategy and mid-term corporate strategy for FY06 to FY08 “Stage Expansion 2008” 2006 January Establishes Millea Mondial Co., Ltd. and enters the assistance and Business Process Outsourcing (BPO) businesses February Establishes Tokio Marine Nichido Samuel Co., Ltd. and enters the retirement home and nursing care business. September Nisshin Fire & Marine Insurance Co., Ltd. becomes a wholly owned subsidiary October Tokio Marine & Nichido Career Service Co., Ltd. invests in Classy Co., Ltd. and enters the homemaker service industry 2007 February Makes Tokio Marine & Nichido Medical Service Co., Ltd. its subsidiary April Makes Tokio Marine & Nichido Insurance Service Co., Ltd. its subsidiary and changes the name to Tokio Marine & Nichido Anshin Consulting Co., Ltd. Establishes Tokio Marine Blubell Re Limited on U.K.-governed Isle of Man October Makes Tokio Marine & Nichido Risk Consulting Co., Ltd. its subsidiary 2008 January Makes Nihon Kousei Kyousaikai its subsidiary and changes the name to Millea Nihon Kosei SS Insurance Co., Ltd. March Acquired Kiln Ltd., a leading U.K.-listed Lloyd’s insurance group member, through Tokio Marine & Nichido Fire Insurance Co., Ltd. July Changes the trade name to Tokio Marine Holdings, Inc. November The Tokio Marine & Nichido Fire Insurance Company (China) Limited becomes a wholly owned China-based subsidiary of Tokio Marine & Nichido Fire Insurance Co., Ltd. December Acquired of Philadelphia Consolidated Holding Corp., a U.S.-based property and casualty insurance group, and formulation of the Group’s mid-term corporate strategy for FY09 to FY11 “Innovation and Execution 2011” 2009 March Sold Real Tokio Marine Vida e Previdência S.A., a life insurance and pension afﬁ liate June Established E. design Insurance Co., Ltd. 06 WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 125 CORPORATE06 DATA

Worldwide Network of the Tokio Marine Group

Tokio Marine has in place a system that is capable of meeting the diverse needs of global customers.

(As of March 31, 2009) North America United States © U.S. Branch (New York) k New York, Los Angeles, San Francisco, Chicago, Atlanta, Nashville and Honolulu ȣ Tokio Marine Management, Inc. (New York, Los Angeles, San Francisco, Chicago, Atlanta, Houston, Nashville and Cincinnati) ȣ Trans Paciﬁ c Insurance Company (New York) ȣ TM Specialty Insurance Company (New York) ȣ TM Casualty Insurance Company (New York) ȣ TNUS Insurance Company (New York) ȣ TM Claims Service, Inc. (New York, Los Angeles and Honolulu) ȣ First Insurance Company of Hawaii, Ltd. (Honolulu) ȣ Philadelphia Consolidated Holding Corp. (Bala Cynwyd and 47 other cities) Canada k Toronto and Vancouver v Lombard Canada Ltd. (Toronto and Vancouver) Bermuda ȣ Tokio Millennium Re Ltd. (Hamilton)

Central & South America Mexico ȣ Tokio Marine Compañía de Seguros, S.A. de C.V. (Mexico City, Tijuana, Monterrey and Guadalajara) ȣ Tokio Marine Global Re Limited (Mexico City) Brazil ȣ Tokio Marine Brasil Seguradora S.A. / Tokio Marine Seguradora S.A. (São Paulo and 50 other cities) Paraguay ȣ La Rural S.A. de Seguros (Asunción and 5 other cities)

Europe United Kingdom k London ȣ Tokio Marine Europe Insurance Limited (London, Manchester and Birmingham) ȣ Tokio Marine Europe Limited (London) ȣ TM Management Services Limited (London) ȣ Tokio Marine Global Ltd. (London) ȣ Kiln Group Limited (London) France k Paris ȣ Tokio Marine Europe Insurance Limited (Paris, Lyon, Bordeaux and Strasbourg) ȣ TM Management Services Limited (Paris) Germany k Düsseldorf ȣ Tokio Marine Europe Insurance Limited (Düsseldorf) ȣ Tokio Marine Europe Insurance Limited c/o Burmester, Duncker & Joly (Düsseldorf and Hamburg) Netherlands k Amsterdam ȣ Tokio Marine Europe Insurance Limited c/o Delta Lloyd Schadeverzekering Volmachtbedrijf B.V. (Amsterdam) ȣ TM Management Services Limited (Amsterdam) Belgium k Bruxelles ȣ Tokio Marine Europe Insurance Limited c/o Fortis Corporate Insurance N.V. (Bruxelles and Antwerpen) Italy k Milano ȣ Tokio Marine Europe Insurance Limited c/o Allianz S.p.A. (Milano) Spain k Barcelona ȣ Tokio Marine Europe Insurance Limited (Barcelona and Madrid) Ireland ȣ Tokio Marine Global Re Limited (Dublin) Norway ȣ Tokio Marine Europe Insurance Limited c/o Citius Insurance AS (Oslo) Denmark ȣ Tokio Marine Europe Insurance Limited c/o RiskPoint A/S (Copenhagen) Greece ȣ Tokio Marine Europe Insurance Limited c/o Willis KENDRIKI S.A. (Athens)

Eurasia Russia k Moscow and St. Petersburg WorldReginfo - f3e90a66-22df-4cf8-91ff-c484d804e87e 126 Tokio Marine Holdings, Inc. 2009 Annual Report Overseas offi ces: Located in 399 cities in 36 countries and regions Branches of Tokio Marine & Nichido • Expatriate staff: 173 • Local staff: Approx. 14,600 Representative and Liaison Offi ces of Tokio Marine & Nichido Underwriting Agents of Tokio Marine & Nichido • Claims agents: Located in 250 countries and regions Subsidiaries and Affi liates

Tokio Marine Holdings 2009 Annual Report Annual Report 2009

http://www.tokiomarinehd.com/

Tokio Marine Nichido Building Shinkan, 2-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-0005, Japan phone: +81-3-6212-3333

Member of Financial Accounting

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