Tokio Marine Holdings, Inc. Tokio 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. k Dubai ȣ Tokio Marine Middle East Limited (Dubai) v Al-Futtaim Development Services Co. (Dubai) Saudi Arabia k Jeddah, Riyadh and Al Khobar v Hussein Aoueini & Co., Ltd. (Jeddah, Riyadh and Al Khobar) ȣ Tokio Marine Saudi Arabia Limited (to be established) Tokio Marine Group Corporate Philosophy Bahrain ȣ The Arab-Eastern Insurance Co. Ltd E.C. (Manama) Turkey ȣ Allianz Sigorta A.S. (Istanbul) With customer trust as the foundation for all its activities, Tokio Marine Group continually strives ȣ Allianz Hayat ve Emeklilik A.S. (Istanbul) to raise corporate value. Oceania & Micronesia Australia k Sydney and Melbourne • Through the provision of the highest quality products and services, Tokio Marine Group aims to ȣ Tokio Marine Management (Australasia) Pty. Ltd. (Sydney, Melbourne and Adelaide) deliver safety and security to all our customers. New Zealand v IAG New Zealand Insurance Limited (Auckland) Guam k Guam • By developing sound, profi table and growing businesses throughout the world, Tokio Marine ȣ Tokio Marine Pacifi c Insurance Limited (Guam) Group will fulfi ll its mandate to shareholders. ȣ Tokio Marine Pacifi c Insurance Limited c/o Nanbo Guam, Ltd. (Guam) ȣ 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 v Pacifi ca Insurance Underwriters, Inc. (Saipan) each and every employee to demonstrate his or her creative potential. Northern Mariana Islands v 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 k Beijing, Tianjin, Dalian, Chengdu, Nanjing, Suzhou, Hangzhou, Guangzhou and Shenzhen of China ȣ The Tokio Marine & Nichido Fire Insurance Company (China) Limited (Shanghai) ȣ Zhongsheng International Insurance Brokers Co., Ltd. (Beijing) ȣ Sino Life Insurance Co., Ltd. (Shenzhen, Shanghai and 20 other cities) Hong Kong k Hong Kong ȣ The Tokio Marine and Fire Insurance Company (Hong Kong) Limited (Hong Kong) Taiwan k Taipei ȣ Tokio Marine Newa Insurance Co., Ltd. (Taipei and 25 other cities) Philippines ȣ Malayan Insurance Co., Inc. (Manila and 27 other cities) Vietnam ȣ Vietnam International Assurance Company (Hanoi and Ho Chi Minh City) Thailand ȣ The Sri Muang Insurance Co., Ltd. (Bangkok and 16 other cities) ȣ Millea Life Insurance (Thailand) Public Co., Ltd. (Bangkok) Malaysia ȣ Tokio Marine Insuranse (Malaysia) Berhad (Kuala Lumpur and 19 other cities) ȣ TM Asia Life Malaysia Bhd. (Kuala Lumpur and 15 other cities) ȣ Tokio Marine Global Re Limited (Labuan) Singapore ȣ Tokio Marine Asia Pte. Ltd. (Singapore) ȣ Tokio Marine Insurance Singapore Ltd. (Singapore) ȣ TM Asia Life Singapore Ltd. (Singapore) On the Cover: Mangrove Afforestation Project ȣ 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 ȣ 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 ȣ 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 ȣ 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 ȣ P.T. Asuransi Tokio Marine Indonesia (Jakarta and 7 other cities) Ecosystems (ISME). India k New Delhi ȣ 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) k 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 underwrit- ing 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 insur- ances and individual annuities, up from 14,739,863 million yen a year earlier. Likewise, Tokio Marine & Nichido Financial Life’s poli- cies 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