Corporate Governance Report
CORPORATE GOVERNANCE

MS&AD Insurance Group Holdings, Inc.
Last Update:Jun 27, 2022

MS&AD Insurance Group Holdings, Inc.
Noriyuki Hara, President & CEO
Contact:

Human Resources & General Administration Dept.
e-mail:ms_ad_ir@ms-ad-hd.com
Securities Code:8725

https://www.ms-ad-hd.com/en/index.html

This document has been translated from the Japanese original (as submitted to the Tokyo Stock Exchange)
for reference purposes only.
In the event of any discrepancy between this translated document and Japanese original, the original shallprevail. MS&AD Insurance Group Holdings, Inc. assumes no responsibility for this translation or for direct,
indirect or any other forms of damages arising from this translation(Note)"Audit & Supervisory Board Member” in this report is used in the same sense of "Kansayaku" in thereference format provided by Tokyo Stock Exchange.

The corporate governance of MS&AD Insurance Group Holdings, Inc. (the “Company”) is described
below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other
Basic Information

1. Basic Views(1) In line with its Corporate Philosophy (Mission), MS&AD, as a holding company overseeing all group businesses, hasestablished a management framework that ensures transparent, fair, swift and decisive decision-making that takes into
account the standpoint of all stakeholders. The Company's objectives are to sustain stability and consistent growth overthe long term by using corporate resources efficiently and managing risks properly and ultimately, to further increase
enterprise value.
(2) The “MS&AD Insurance Group Corporate Philosophy (Mission), Corporate Vision and Values” were formulated as
something all officers and employees of the Group should adhere to in all situations. In addition to working todisseminate these principles among all officers and employees of the Company and its Group companies, corporate
governance, compliance and risk management are positioned as important management issues in the Medium-Term
Management Plan, and efforts shall be made to actively promote that Plan.
■Aspirations of MS&AD Insurance Group<Our Mission>
To contribute to the development of a vibrant society and help secure a sound future for the planet, by enabling safety andpeace of mind through the global insurance and financial services business.
<Our Vision>
To create a world-leading insurance and financial services group that consistently pursues sustainable growth andenhances corporate value<Our Values>
・CUSTOMER FOCUS
Striving to provide security and satisfaction to our customers
・INTEGRITY
Being sincere, kind, and fair in our dealings with people
・TEAMWORK
Growing together as a team by respecting one another’s individuality and opinions and sharing knowledge and ideas

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・INNOVATION
Always improving the way we work while responding to stakeholders’ interests
・PROFESSIONALISM
Providing high-quality services by constantly enhancing our skills and proficiency
Please see attached “the MS&AD Insurance Group Basic Policies on Corporate Governance (hereinafter referred to as“Basic Policies on Corporate Governance”)” at the end of this report for more-detailed information.
There is a movement to set "Purpose" as an expression of the raison d'etre of a company separate from the management
philosophy. However, because our group's Management Philosophy (Mission), which expresses the raison d'etre of acompany in a simple and easy to understand manner, has already permeated throughout the Group, our group has determinedthat "Purpose" is the same as the Management Philosophy.
The Group insurance companies in which the Company has a direct investment are notated as follows:
Mitsui Sumitomo Insurance Co., Ltd.

Mitsui Sumitomo Insurance, MSI

Aioi Nissay Dowa Insurance Co., Ltd.

Aioi Nissay Dowa Insurance, ADI

Mitsui Direct General Insurance Co., Ltd.

Mitsui Direct General Insurance, MD

Mitsui Sumitomo Aioi Life Insurance Co., Ltd

Mitsui Sumitomo Aioi Life Insurance, MSI Aioi Life

Mitsui Sumitomo Primary Life Insurance Co., Ltd.

Mitsui Sumitomo Primary Life Insurance, MSI Primary Life

[Reasons for Not Implementing the Principles of the Corporate Governance Code]
The Company has implemented all principles (including those for Prime Markets) of the Corporate Governance Code.

[Disclosure Based on the Principles of the Corporate Governance Code](1)[Principle 1.4] Policy for Strategic Equity Holdings
a. MS&AD Insurance Group Basic Policy for Reduction of Strategic Equity Holdings
Strategic equity holdings is shares held under the assumption of long-term holding for the purpose of maintaining
and strengthening comprehensive business relationships.
We have adopted a policy to reduce the aggregate amount of our strategic equity holdings, aiming to build a solid
financial base less affected by fluctuations in stock prices and to improve the capital efficiency (Note).
The suitability of holding strategic equities is assessed from the perspective of the equity issuers’ growth potential
and profitability for each equity and the medium- to long-term business relationship.
If the rationale is not confirmed, we shall proceed with sales of those strategic equity holdings after obtaining theequity issuers’ understanding. Otherwise, we may sell our holdings, taking into account the market environment andour business and financial strategies.
(Note) The Group's strategic equity holdings of JPY 620.8 billion have been sold from FY2017 to FY2021. The
initial plan was JPY500 billion. The Group plans to sell JPY400 billion next 4 years by the end of FY2025.
The balanace of market value of the strategic equity holdings held by the Company as of March 31, 2022 is
JPY2,834.9 billion.
b. Verification of propriety of strategic equity holdings and reduction efforts
・Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance shall examine the propriety of their strategic holdings
by each equity based on profitability and balance of insurance contract as to whether the purpose of the holding isappropriate and whether the benefits and risks associated with the holding are commensurate with the capital cost.
The results of these examinations shall be confirmed by MS&AD’s Board of Directors.
・Based on the results of the examinations of each equity, constructive dialogue shall take place with regard to equities
that do not meet the objective of the rationale and are particularly in need of improvement. The equity will continue
to be held in the event that an improvement is anticipated, and sale negotiations will be entered into in the event thatan improvement is not anticipated.
c. Criteria for Ensuring Appropriate Handling of the Exercise of Voting Rights Pertaining to Strategic Equity
Holdings
The basic policy on the exercise of voting rights for strategic equity holdings is as follows.
(a) Basic approach to the exercise of voting rights

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The exercise of voting rights is seen to be an important means of influencing the management and improving theenterprise value of investee companies. Therefore, decisions are not made uniformly based on formulaic
short-term criteria, but rather in terms of enhancement of enterprise value in the medium-to-long term andimprovement in shareholder returns, among others, based on dialogue with investee companies.
(b) The process for exercising voting rights
When exercising voting rights, items such as those listed below are verified for each proposal, with a focus onsuch aspects as whether the company in question is managed with an emphasis on growth of the company andthe interests of shareholders, and whether the company is engaged in any antisocial behavior. Proposals are also
judged based on the results of dialogue with the company concerned following a detailed examination ofindividual issues as required.
<Main evaluation criteria for each type of proposal>
Type of proposal
Appropriation of surplus
Election of Directors

Election of Audit & Supervisory
Board Members and Accounting
Auditors
Officers’ remuneration andbonuses
Retirement benefits andcondolence money for officers
Issuance of stock acquisitionrights and stock remuneration

Matters for verification
 Status of shareholder returns
 Status of enhancement of corporate value Status of occurrence of scandals, etc.
 Status of election of Independent Outside Directors
 Status of attendance at Board of Directors meetings, etc.
 Status of occurrence of scandals, etc.
 Status of attendance at Board of Directors meetings and Audit &Supervisory Board meetings
 Status of enhancement of corporate value Status of attendance at Board of Directors meetings, etc.
 Status of occurrence of scandals, etc.
 Any application of performance-linked remuneration, and recipients
 Any decrease of equity ratio by existing shareholders

Changes to the Articles ofIncorporation

 Examined individually

Takeover defense measures
Shareholder proposals

 Examined individually Examined individually(c) Criteria for judging proposals relating to the exercise of voting rights
Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance have established specific evaluation criteria andguidelines for the exercise of voting rights of shares held. In the event that the criteria and guidelines are met,
dialogue will take place as necessary with the investee companies, and proposals shall be judged based on the
dialogue.
* Both companies will periodically report on its details on their websites.
(2)[Principle 1.7] Procedures for related Party Transactions
a. With respect to transactions between the Company and a related party, to ensure that they do not harm the common
interests of the Company and the Company’s shareholders, such transactions as competition transaction by a director,
transactions between a corporate officer and the Company, and other transactions with conflict-of-interest
characteristics, such transactions will require prior deliberation and approval of a Board of Directors’ meeting withthe attendance of multiple outside directors, and in the case of similar transactions by executive officers will requirea report to the Board of Directors.
b. Transactions falling under Related Party Transactions as set forth in the Companies Act and the Ordinance on
Financial Statements, etc. are noted in the Securities Report. Note that preparation of the Securities Report is amatter to be reported to the Board of Directors.
(3)[Supplementary Principle 2.4.1] Ensuring the diversity of core human resources of the Company
Please see Ⅲ3. “Measures to Ensure Due Respect for Stakeholders”.
(4)[Principle 2.6] Exercise of functions as an asset owner of a corporate pension plan
・The Mitsui Sumitomo Insurance Corporate Pension Fund and the Aioi Nissay Dowa Insurance Corporate Pension
Fund have been established in order for Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance, which are themain operating companies of the Group, to implement defined-benefit corporate pension plans and manage thepension assets separately from the companies.

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・Decisions regarding asset management of each Corporate Pension Fund are made by the Board of Representatives
based on deliberations by the Asset Management Committee. Personnel in the asset management, accounting, andhuman resources departments in each company who possess appropriate qualities shall be appointed to the AssetManagement Committee and the Board of Representatives, and labor union executives are appointed as
representatives of the beneficiaries.
・Personnel who have extensive experience in asset management shall undertake asset management operations of eachcorporate pension fund. In addition, both funds accepted the Stewardship Code.
・For each corporate pension fund, the incorporation of shares and the exercise of voting rights by investees are inaccordance with the evaluation criteria of the party to whom asset management has been delegated, and there are no
matters that constitute a conflict of interest.
(5)[Principle 3.1] Full Disclosurea. Aspiration of the Group (Mission etc.) and business strategies and business plans; ( [Principle 3.1(i)])(a) Business Objectives, etc.;
Please see the above I.1 ”Aspiration of the MS&AD Insurance Group” .
(b) Business strategies and business plans
Please see our Group’s Medium-Term Management Plan (2022-2025) on our company web site as below.
https://www.ms-ad-hd.com/en/group/what/strategy/management_plan.html
b. Basic policy and guidelines on corporate governance; [Principle 3.1(ii)]
Please see the above I.1 “Basic Views” and the attached “the Basic Policies on Corporate Governance”.
c. Board policies and procedures in determining the remuneration of the senior management and directors; [Principle
3.1(iii)]
Please see the below II.1 “Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods<Remuneration Determination Processes>”.
d. Board policies and procedures in the appointment and dismissal of the senior management and the nomination of
directors and Audit & Supervisory Board Members candidates;[Principle 3.1(iv)]

・For policies regarding the nomination of directors and Audit & Supervisory Board Members candidates, please see
the below“Criteria for the Selection of Director Candidates and Audit & Supervisory Board Member Candidates”,
in the Appendix of the attached “Basic Policies on Corporate Governance”.
・For policies regarding the nomination of director candidates who engage in managing affairs continuously(including Chairman & Director, Vice Chairman & Director and President), please see the above-mentioned
criteria as well as “(8) Succession plan for the Chief Executive Officer (CEO), etc. a. Criteria for CEO Selection”.
・For procedures regarding the appointment of the senior management and the nomination of directors and Audit &Supervisory Board Members candidates, please see the below II.1 “Committee’s Name, Composition, andAttributes of Chairperson” Supplementary Explanation “1. Nomination Committee (Nomination Process)”.
・For policies regarding the dismissal of directors who engage in daily business (including Chairman & Director,
Vice Chairman & Director and President), please see “(10) Objective, timely and transparent procedures for thedismissal of a CEO”.
・The dismissal of executive officers and the dismissal of directors andAudit & Supervisory Board Members ofdomestic insurance companies in which the Company has direct investments shall be deliberated by the
Nomination Committee and determined by the Board of Directors upon receipt of the results of deliberations by
the Nomination Committee.
e. Explanations with respect to the individual appointments, dismissals and nominations based on d.[Principle 3.1(v)].
Please see [Reasons for selection as a candidate] in the “Notice of Convocation of Annual Shareholders Meeting”.
https://www.ms-ad-hd.com/en/ir/ir_event/meeting.html(6)[Supplementary Principle 3.1.3] Initiatives for sustainability, etc.;
a. Initiatives for sustainability
Please see our “Sustainability Report”.
https://www.ms-ad-hd.com/en/csr/report.html
b. For information on the impact of climate change risks and opportunities on our business activities and earnings,
please see our “TCFD Report”.
https://www.ms-ad-hd.com/en/csr/community/climate_change/tcfd.html

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c. Investment in human capital and intellectual property(a)Human capital
Please see page 33 in “Integrated Report 2021”.
https://www.ms-ad-hd.com/en/ir/library/disclosure.html(b)Intellectual property
Regarding investment in intellectual property in our group, base on CSV × DX, we are developing new services
that come before and after coverage and protection using digital data. In addition, Digitalization Committee has
been set up as a task group to regularly discuss the promotion of digitalization.
In addition, through investment in startup companies, we are collaborating with these companies to make use of
cutting-edge technology to provide new services and enhance business operations. The main activities are as
follows.
・Providing new services for individuals and companies that contribute to risk measurement (quantification) andsecurity and safety measures for customers*Our company provides Climate Change Risk Analysis Venture Jupiter Intelligence Launches TCFD
Quantitative Assessment Service for Climate Change Impact ~ Global Assessment of the Impact of Natural
Disaster Risks Due to Climate Change ~・Enhancing and streamlining operations such as product development, insurance underwriting, and claims
services.
(7)[Supplementary Principle 4.1.1] Scope and content of the matters delegated to the management
Please see Chapter 3. 2. “Role of the Board of Directors” in the attached “Basic Policies on Corporate Governance”.
(8) [Supplementary Principle 4.1.3] Succession plan for the Chief Executive Officer (CEO), etc.
The Company has formulated the succession plan that stipulates the selection of the Group CEO (hereinafter referred
to as “CEO”) and the fostering of successors. The outline of the plan is as follows.
a. Criteria for CEO selection
・ Ability to embody the Group’s Mission, Vision and Values, and having the concept of CSV (Creating Shared
Value with society) in his/her own system of values
・ Ability to plan and build future visions
・ Fairness and impartiality
・ Ability to develop human assets
・ Ability to demonstrate leadership
・ Global response capability
・ Acting in the Group’s best interestb. CEO Selection Process(a) Recommendation by Current CEO
・ The current CEO prioritizes the candidates and recommends them to the Nomination Committee (the majority ofwhose members and the chairperson are appointed from among Outside Directors).
・ Candidates may be from within the Group as well as outside the Group.
(b) Deliberation by the Nomination Committee
・ The Nomination Committee deliberates on candidates recommended by the CEO.
・ Outside Directors can recommend other candidates.
(c) Resolution by the Board of Directors
After (a) and (b) above, the Nomination Committee advises the Board of Directors which makes the final decision.
c. Development Plan for CEO Candidates
The CEO must position the development of a large number of candidates as an important role for him/her andprovide the candidates from inside the Group with the following experience as needed.
・ Multiple departments (Management, operations, international, sales, claims services, systems, etc.)
・ Management of domestic operating companies and overseas subsidiaries(9) [Supplementary Principle 4.2.1] Management remuneration
In order to realize a Director remuneration system functioning as an appropriate incentive for improving linkage
between Director remuneration and business performance and achieving sustainable growth for the purpose ofstrengthening governance and increasing medium term corporate value, the Company is introducing a restricted stock5

remuneration plan to be allotted to the Directors excluding Outside Directors, from fiscal 2019.
For details, please see II 1. [Incentives].
(10) [Supplementary Principle 4.3.3] Objective, timely and transparent procedures for the dismissal of a CEO
The objective, timely and transparent procedures for dismissing a CEO are as follows.
a. When an Outside Director deems it necessary to discuss dismissal, such as when the CEO is subject to theprohibitions stipulated in the Executive Officers Rules (violating obligations set forth in the Companies Act andother laws and regulations or company regulations, etc.) or when it is determined that it is difficult for the CEO toproperly continue his/her duties due to health reasons or other reasons, the Outside Director shall deliberate on
his/her own initiative with members of the Nomination Committee excluding the CEO.
Based on the results of the deliberation, necessary procedures are carried out in accordance with the Companies Act
and internal regulations.
b. Directors who are not Outside Directors may request a meeting of the Board of Directors to be convened inaccordance with the Rules of the Board of Directors and submit proposals for dismissal of Directors at the General
Shareholders’ Meeting.
(11)[Principle 4.9] Independence Standards and Qualification for Independent (Outside）Directors
Please see the below II.1 [Independent Directors/Audit & Supervisory Board Members] “Matters relating to
Independent Directors/Audit & Supervisory Board Members” in this report, as well as 1.(1)”Eligibility “and1.(3)”Independence” of ”Criteria for the Selection of Director Candidates and Audit & Supervisory Board Member
Candidates”, in the Appendix of the attached” Basic Policies on Corporate Governance”.
(12)[Supplementary Principle 4.10.1] Policy, authority and role, etc. regarding the independence of the Committee
structure
Please see the following;･Ⅱ1. [Directors] ”Committee’s Name, Composition and Attributes of Chairperson” and its Supplementary
Explanation･Chapter 3. 10. Nomination Process and 11. Process of Determining Remuneration in the attached “Basic Policies on
Corporate Governance”(13)[Supplementary Principle 4.11.1] A view on the balance, diversity and Board size, and policies and procedures
for nominating directors.
a. Policies on the Board of Directors’ Overall Balance of Expertise, Experience, Capabilities, Diversity, and Scale・5 of the 11 Directors (8 men and 3 women) and 2 of the 4 Audit & Supervisory Board Members (2 men and 2
women) have been appointed from outside the Company to incorporate perspectives independent from management,
strengthen monitoring and oversight functions, and conduct highly transparent management. Our company selects
the skills necessary to ensure the effectiveness of the Board of Directors, creates a skills matrix, and confirms thatthe Board as a whole has the necessary skills. The Board of Directors as a whole strives to ensure diversity,
including gender, race and nationality, while considering the balance of knowledge, experience and abilities of theBoard of Directors as a whole.
・In addition to meeting the eligibility requirements under the Companies Act and the Insurance Business Act, outside
directors are selected based on their skills in areas such as corporate management, human resources, human resource
development and legal affairs, which are generally required. In addition, outside directors are selected based on theirskills based on the characteristics of our group's business, such as insurance business and internationality, as well as
their knowledge and experience in areas such as IT and digital sustainability.
・Director candidates other than Outside Director candidates must meet legal eligibility requirements. In addition, withthe goal of selecting candidates able to accurately and fairly supervise the overall management of insurancecompanies, candidates are selected based on consideration of specialized expertise, such as that stemming fromextensive experience working as a manager in an insurance company as well as on consideration of varied
experience, highly specialized experience, and the ability to exercise leadership in accordance with the Company’s
corporate philosophy.
・At least 1 candidate for Audit & Supervisory Board Member must have sufficient knowledge of accounting or
finance.

6Outside Audit & Supervisory Board Member Mr. Kunio Chiyoda is qualified as a certified public accountant andhas considerable knowledge of finance and accounting.
・Skills Matrix of the Board*Please see the attached “Skills Matrix of Director, Audit & Supervisory Board Member and Executive Officer”.
･The Company deliberated regarding skills necessary to assure the effectiveness of the Board of Directors(knowledge, experience, and capability), and from the standpoint of supervising the decisions made and executionof duties on matters required for management strategy, we set forth the following.
1. Base skills that are generally required“Corporate management”, “human resources and human asset development”, “legal affairs and compliance”,“risk management” and “finance and accounting”
2. Skills complementing the fact that the core business of the MS&AD Group is insurance, and that we engage inbusiness globally“Insurance business” and “internationality”
3. Skills that take into account our current business environment and that are necessary to address business reform
and issues considered important by the market“IT and digital” and “sustainability”･Furthermore, regarding Audit & Supervisory Board Members, we also consider “finance and accounting” to beimportant skills.
･As demonstrated in the “Skills Matrix of Director, Audit & Supervisory Board Member and Executive Officer” webelieve that the Board of Directors as a whole has the necessary skills.
b. Criteria for the Selection of Director CandidatesPlease see “Criteria for the Selection of Director Candidates and Audit & Supervisory Board Member Candidates” in
the Appendix of the attached “Basic Policies on Corporate Governance”.
c. Overview of the Director Appointment Process
Regarding the appointment of Directors, upon deliberation by the Nomination Committee, the Board of Directors
determines its candidate(s), whose appointment is then decided by the Shareholders’ Meeting.
Please see the below II.1 “Committee’s Name, Composition, and Attributes of Chairperson” Supplementary
Explanation “1. Nomination Committee (Nomination Process)”.
(14)[Supplementary Principle 4.11.2] A status for concurrent positions of Outside Directors and Outside Audit &Supervisory Board Membersa. Outside Directors
Please see the below II.1 [Directors]“Outside Directors’ Relationship with the Company(2 )Supplementary
Explanation of the Relationship”．
b. Outside Audit & Supervisory Board Members
Please see the below II.1 [Audit & Supervisory Board Members] “Outside Audit & Supervisory Board Members’
Relationship with the Company (2)Supplementary Explanation of the Relationship”(15)[Supplementary Principle 4.11.3] Disclosure of summary results of analysis and evaluation of overall
effectiveness of the Board of Directors＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝
1. Analysis and Evaluation Process
・As noted in Chapter 3.5 of the attached “Basic Policies on Corporate Governance,” an analysis and evaluation of
the overall effectiveness of the Board of Directors is conducted annually.
An outline of the analysis and evaluation for fiscal 2021 is as follows.
(1) Questionnaires conducted for Directors’ self-evaluation and its summary
・A questionnaire consisting of 12 questions (concerning the roles and responsibilities of the Board of Directors, its
operation, etc.) was distributed to each Director in advance and the secretariat conducted an interview with each
Director based on the questionnaire.
*Excluding the Chairman & Director, the Vice Chairman & Director, and the President & Director
・Evaluation responses mainly focused on whether or not Directors had carried out initiatives to enhance theeffectiveness of the Board of Directors in accordance with the improvement measures (measures for improving
capabilities in FY2021) that had been formulated based on the evaluation of the Board of Directors in FY2020.
(2) Exchange of opinions at the Outside Director Council

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・At a meeting of the Outside Director Council (consisting of all the Outside Directors), Outside Directors
exchanged opinions about analysis and evaluation based on the results of the questionnaire.
(3) Analysis and evaluation by the Governance Committee and formulation of measures for improving capabilities
・The Governance Committee (consisting of all Outside Directors, Chairman & Director, Vice Chairman &Director and President) conducted analysis and evaluation and formulated measures for improving capabilities byidentifying issues to be addressed in fiscal 2022.
(4) We will promptly commence and strengthen measures for improving capabilities in fiscal 2022, and link them toa PDCA cycle aimed at enhancing effectiveness.
2. Summary of the Results of Analysis and Evaluation(1) Content of deliberations at the Board of Directors and fulfilling function< Evaluation results >・Constructive discussions were conducted aiming to improve corporate value over the medium to long term,
including growth strategies taking into account the environment surrounding the Company and other factors,
with a view to formulating the next medium-term management plan. In the discussions, active use was made of
meetings outside of the Board of Directors (Outside Officers Study Sessions, etc.)
・ Sufficient explanation was provided regarding the investment objectives and risks, particularly around overseas
business investments, and in-depth discussions and examinations were conducted.
・The results of employee awareness surveys are regularly reported to the Board of Directors, and the permeationof the Company’s Mission, Vision, Value, and other factors are appropriately supervised.
・With regard to sustainability initiatives, we actively disclosed and disseminated the details of our efforts on
climate change risks, including reports in line with TCFD.
< To be improved from now on >・Expand opportunities for Outside Officers to talk with management teams of overseas subsidiaries in order tograsp the potential risks at outside subsidiaries.
・Provide opportunities for Outside Officers to observed operating companies and opportunities for them to talkdirectly with operating company members.
・Expand opportunities to report on specific customer comments and how they are linked to improvements in
products and services of operating companies, including their mechanisms.
(2) Operation of the Board of Directors< Evaluation results >・An atmosphere that allows free and direct discussion has been fostered in the Board of Directors, and frank
discussions were held, mainly on important proposals.
・The participation of the executive officers of the operating companies in observing the board meetings provided
an opportunity to get to know the internal officers (including the operating companies) and to provide
appropriate advice to the personnel committee.
(3) Other< Evaluation results >・Opportunities such as training for outside directors were fully provided and useful information was obtained.
< To be improved from now on >・In the study meetings for executives, themes related to highly specialized fields (Climate change, DX, etc.) will
be taken up.
・Provide opportunities for free exchanges of opinion between Outside Officers and small groups of Executive
Officers.
＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝(16)[Principle 4.14] [Supplementary Principle 4.14.1] [Supplementary Principle 4.14.2] Criteria for Directors andAudit & Supervisory Board Members Training
Please see Chapter 3.8 ”Support Systems for Directors and Audit & Supervisory Board Members” in the attached”
Basic Policies on Corporate Governance”.
(17)[Principle 5.1] [Supplementary Principle 5.1.2]Policies concerning the measures and organizational structures
aimed at promoting constructive dialogue with shareholders＜Policy for Constructive Dialogue with Shareholders＞

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(17)-1. Basic Approach
The Company will actively engage in constructive dialogue with shareholders for the Company's sustained growthand enhancement of its medium- to long-term enterprise value, and will endeavor to generate further enterprise value
by utilizing such dialogue in managing the Company.
In addition, the Company is engaged in establishing internal structure for disclosure of reliable information that canform a foundation for this dialogue, and in creating mechanisms to more effectively provide management and theBoard of Directors with feedback regarding the content of such dialogue.
(17)-2. Control Manager for Constructive Dialogue
This shall be Executive Officer (responsible for the Corporate Communications and Investor Relations
Department).** Tetsuji Higuchi, Representative Director, Executive Vice President, Chief Financial Officer (responsible for the
Corporate Planning Dept. and the Corporate Communications and Investor Relations Dept.), is currently in chargeof this assignment.
(17)-3. Specific efforts regarding constructive dialogue with shareholder
a. The Corporate Communications and Investor Relations Department, which assists with shareholder dialogue, andvarious other departments within the Company, and efforts to expand means of dialogue. [Supplementary Principle
5.1.2(ii)(iii)]
・Holding regular meetings for the Corporate Communications and Investor Relations Department to provide
feedback to other relevant departments
・Holding investor briefings led by the heads of each business unit
・Holding exchanges of opinion with investors for the purpose of dialogue between senior management andinvestors
・Enhancement of the Integrated Report, a tool for constructive dialogue.
b. Measures for providing senior management and the Board of Directors with feedback regarding shareholder
dialogue [Supplementary Principle 5.1.2(iv)]
・Semiannual IR activity reports and feedback on the equity market’s perspective of the Company to the GroupManagement Committee and the Board of Directors.
・Quarterly reports to senior management on the status of the Company’s share price.
・Reports to senior management on areas of interest and evaluation of investors regarding overseas IR trips and,financial results announcements.
c. Measures concerning control of insider information in the course of shareholder dialogue [Supplementary Principle
5.1.2(v)]・Timely and fair disclosure of information fully utilizing the Company’s website
・Compliance with rules on the prevention of insider trading, etc., and refraining from dialogue related to earnings in
the quiet period established in the IR policy.
(18)Status of enactment of principles other than the above
a. [Principle 1.3] Basic Capital Management Policy; [Principle 5.2] Formulation and Announcement of Management
Strategy and Management Plans■In the Group's Medium-term Management Plan, we have established the Shareholder returns policy and an theInvestment policy, and have set targets for financial soundness, profitability, and capital efficiency.
https://www.ms-ad-hd.com/en/group/what/strategy/capital.html■Shareholder returns policy
Provide shareholder return based on shareholder dividends and repurchase of own shares by adopting a benchmark
of 50% of Group adjusted profit in Stage 1 (FY2022-FY2023) of the Medium-term Management Plan and 50% of
return base profit* in Stage 2 (FY2024-FY2025)
Provide additional returns in an agile and flexible manner, in light of market trends, the business environment,
capital position and other factors■Investment Policy
Strengthen：Investment to strengthen the competitiveness of existing businesses
・We will carry out investments that demonstrate a strong awareness of ROI, including investments aimed atpromoting digitalization, such as investments in information systems.

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Expand：Investment to diversify and expand the business portfolio
・We will consider the investments from the perspectives of shared values, sustainable growth models and risk
diversification in terms of geography and business category.
・The targets include the United States, the world's largest nonlife insurance market, and Asia, where growth isexpected.
Innovate：Investment to create new business territories
・Investment to search for technologies and business models that will be game changers over the next 3 to 5 years
・Create new services and business opportunities using digital data
■Financial soundness
・The upper limit of the ESR target range was raised to 180 ~ 250% in order to accumulate capital to support
business investments and to make investments flexibly.
■Profitability and capital efficiency
・In FY 2025, we will achieve net income under IFRS of 470 billion ~ 500 billion yen and stable adjusted ROE of
10% or more.
Note1: Group Adjusted Profit is the MS&AD Insurance Group’s own profitability indices. They are calculated by thefollowing formula.
Group Adjusted Profit = consolidated net income + provision*2 for catastrophe loss reserve and others*1 – otherincidental factors (amortization of goodwill and other intangible fixed assets and others)+ equity in earnings of the non-consolidated Group companies*1

Catastrophe reserves, contingency reserves and reserve for price fluctuation of domestic non-life insurance
business and MSI Aioi Life

*2

Subtraction in case of reversal

Note 2：Return base profit＝Net profit on an IFRS basis – Adjustments*3 from net profit on an IFRS basis + Gain/loss
on sale of strategic equity holdings*3

Impact of market fluctuations, impact of deferred policy acquisition costs, gain/loss related to unfavorable
policies, amortization of intangible assets, goodwill impairment

Note 3：Adjusted ROE＝Net profit on IFRS basis ÷(Net assets on IFRS basis － Unrealized gain/loss from strategic
equity holdings)
b. [Supplementary Principle 3.1.2] Disclosure in English
The Company has disclosed and provided the following required documents in English.
Notice of Convocation, Notice of Resolutions, Summary Of Financial Statements, Timely Disclosure, Corporate
Governance Report, Integrated Report
c. [Principle 4.8] [Supplementary Principle 4.8.1] [Supplementary Principle 4.8.2] Independent (Outside）Directors
The Board of Directors comprises 11 members, and more than one-third of the Directors (5 members) are nominatedas Independent Outside Directors.
Aiming to enable Outside Directors to engage freely in constructive discussions and opinion exchanges, we haveformed the following committee and meetings.
■ Governance Committee■ Outside Directors Council■ Outside Directors and Outside Auditors Joint Council(a) Governance Committee
The Governance Committee whose chairperson is elected by mutual vote of the Outside Directors has been
established for the purpose of discussion by all Outside Directors, Chairman & Director, Vice Chairman & Director
and President regarding matters related to the status of policies regarding and stance on corporate governance. The
Governance Committee met twice in fiscal 2021.
(b) Outside Director Council
We have established an Outside Director Council, whose members are only Outside Directors.
The Governance Committee uses discussions within the Outside Director Council as a basis to discuss matters with10

the Chairman of the Board, the Vice Chairman of the Board and president, and also make recommendations to theBoard of Directors as required. The Outside Director Council met once in fiscal 2021.
(c) Outside Directors-Audit & Supervisory Board Members Joint Council
We have established the Outside Directors-Audit & Supervisory Board Members Joint Council, whose members are
the Outside Directors (4) and Audit & Supervisory Board Members (2 outside, 2 internal), to liaise between theOutside Directors and Audit & Supervisory Board Members. The Outside Directors-Audit & Supervisory Board
Members Joint Council met twice in fiscal 2021.
d. [Principle 4.12] [Supplementary Principle 4.12.1] Efforts to encourage active discussion at meetings of the Board of
Directors(a) Operation of the Board of Directors
For the overview, please refer to the attached MS&AD Insurance Group Basic Policies on Corporate Governance,
Chapter 3, 4. Operation of the Board of Directors.
The following efforts have been implemented to encourage active discussion at meetings of the Board of Directors.
・Materials for the proceedings are distributed in advance, with supplementary explanations provided during
meetings of the Board of Directors. The Corporate Planning Department, which serves as secretariat for the
Board of Directors, also provides explanations in advance to Outside Directors and Outside Audit & Supervisory
Board Members.
・To encourage attendance, members of the Board are notified of the annual schedule of meetings, which isdetermined in advance, basically ensuring an attendance rate of 75% or greater.
・Agenda items are set appropriately based on a once-monthly meeting schedule, with additional meetings held as
required. Care is taken to ensure sufficient time for discussion based on the number of agenda items.
・For efforts in fiscal 2021 refer to (15) [Supplementary Principle 4.11.3] Disclosure of summary results of analysis
and evaluation of overall effectiveness of the Board of Directors, Item 2 (2) Operation of the Board of Directors.

2. Capital Structure
Foreign Shareholding Ratio

20% or more, less than 30%【Status of Major Shareholders】
Name / Company Name

Number of Shares Owned

The Master Trust Bank of Japan, Ltd. (Trust

Percentage (%)

86,338,600

15.77

Toyota Motor Corporation

52,610,933

9.61

Nippon Life Insurance Company

36,325,258

6.64

Custody Bank of Japan, Ltd. (Trust account)

24,748,300

4.52

JP MORGAN CHASE BANK 380055

16,465,245

3.01

STATE STREET BANK WEST CLIENT -8,880,979

1.62

6,574,000

1.20

TRUST

6,293,058

1.15

THE BANK OF NEW YORK MELLON 140051

6,222,800

1.14

SUMITOMO LIFE INSURANCE COMPANY

6,077,100

1.11

account)

TREATY 505234
Barclays Securities Japan Limited
STATE

STREET

BANK

ANDCOMPANY 505103

Controlling

Shareholder(except

for

Parent－Company)
Parent Company

None

Supplementary Explanation

11

・“Status of Major Shareholders” above is based on the register of shareholders as of March 31,2022.
・“Percentage” in“Status of Major Shareholders” above shows the ratio of the number of shares held by such shareholder
to the total number of the outstanding shares (excluding treasury shares).
・The Company holds 46,187 thousand shares of treasury shares, which are not shown in the table above.
・Regarding shares of the Company, The Bank of Tokyo-Mitsubishi UFJ, Ltd. (currently MUFG Bank, Ltd.) submitted areport of possession of large volume as of July 18, 2017, Nippon Life Insurance Company Submitted a change report asof April 22, 2019 pertaining to a report of possession of large volume and Sumitomo Mitsui Trust Asset Management
Co., Ltd. submitted a report of possession of large volume as of December 7, 2020 respectively. However, since theCompany cannot confirm the number of shares substantially held by them as of March 31,2022, such information is notdisclosed in “Status of Major Shareholders” above.

3. Corporate Attributes
Listed Stock Market and Market Section

Tokyo Stock Exchange(Prime Section) and Nagoya Stock
Exchange (Premier Section)

Fiscal Year-End

MarchType of BusinessInsurance

Number of Employees (consolidated) as of the End

More than 1,000of the Previous Fiscal YearSales (consolidated) as of the End of the Previous

More than ¥1 trillion

Fiscal Year
Number of Consolidated Subsidiaries as of the End

50 or more, less than 100of the Previous Fiscal Year

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with
Controlling Shareholder―――

5. Other Special Circumstances which may have Material Impact on Corporate Governance―――

II. Business Management Organization and Other Corporate Governance Systems
regarding Decision-making, Execution of Business, and Oversight in Management
1. Organizational Composition and Operation
Organization Form

Company with Board of Corporate Auditors[Directors]
Maximum Number of Directors Stipulated in

15

Articles of Incorporation
Term of Office Stipulated in Articles of

1 year

Incorporation
Chairperson of the Board

Chairman(except holding concurrent post of President）

Number of Directors

11

Number of Outside Directors

5

Number of Independent Directors

5Outside Directors’ Relationship with the Company (1)NameAttribute

Relationship with the Company*aMariko Bando

From another company

Akira Arima

From another company

12

b

c

d

e

f

g

h

i

j

k

Junichi Tobimatsu
Rochelle Kopp

LawyerFrom another company

Akemi Ishiwata

From another company*

Categories for “Relationship with the Company”*“○” when the director presently falls or has recently fallen under the category;“△” when the director fell under the category in the past*“●” when a close relative of the director presently falls or has recently fallen under the category;“▲”when a close relative of the director fell under the category in the pasta. Executive of the Company or its subsidiaries
b. Non-executive director or executive of a parent company of the Company
c. Executive of a fellow subsidiary company of the Company
d. A party whose major client or supplier is the Company or an executive thereof
e. Major client or supplier of the listed company or an executive thereof
f. Consultant, accountant or legal professional who receives a large amount of monetary consideration or otherproperty from the Company besides compensation as a Director/Audit & Supervisory Board Members
g. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity)
h. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f) (thedirector himself/herself only)
i. Executive of a company, between which and the Company Outside Directors/Audit & Supervisory Board Members
are mutually appointed (the director himself/herself only)
j. Executive of a company or organization that receives a donation from the Company (the director himself/herself
only)
k. Others

Outside Directors’ Relationship with the Company (2)NameMarikoDesignation as
Independent
Director○

Bando

Supplementary
Explanation of theRelationship

Reasons of Appointment

Chancellor (Rijicho and

Ms. Mariko Bando has gained a wealth ofSocho), Showa Women’s

insight and experience in the administrative

University

and educational fields as well as diversity

Outside Director, Mitsubishi

promotion from previously serving as

Research Institute, Inc.

Director General of Gender Equality
Bureau of the Cabinet Office, Consul
General of Japan in Brisbane, Australia,
President of Showa Women’s University,
etc. We expect to continue to draw that
insight and experience and have hersupervise the management and provide
advice on management overall from her
expert perspective, particularly in regard to

Akira Arima○promoting diversity.
-

Mr. Akira Arima has a wealth of insightand experience concerning
telecommunications business as amanagement executive gained frompreviously serving as Director of Nippon
Telegraph and Telephone Corporation,
President, Chief Executive Officer,
Representative Director of NTT
Communications Corporation, etc. We
expect to continue to draw that insight and13experience and have him supervise themanagement and provide advice onmanagement overall from his expert
perspective, particularly in regard topromoting digitalization and global
Junichimanagement.

○

Tobimatsu

Attorney-at –law, GAIEN

Mr. Junichi Tobimatsu has a wealth of

PARTNERS

insight and experience concerning overall

Outside Director, Amana Inc.

corporate legal affairs including those of

Outside Director (Auditor),overseas companies as an attorney-at-law.

AI, Inc.

We expect to continue to draw that insight

Outside Director(Auditor),and have him supervise the management

CANDEAL Co., Ltdand provide advice on management overall
from his expert perspective, particularly inregard to securing soundness of theRochelle

management of the Group.

○

Kopp

Managing Principal, Japan

Ms. Rochelle Kopp has a wealth of insightIntercultural Consulting

into cross-cultural communication andexperience in both Japan and the U.S. as amanagement consultant. We expect tocontinue to draw that insight andexperience and have her supervise themanagement and provide advice onmanagement overall from her expert
perspective, particularly in regard to the

Akemi

Group’s global expansion.

○-

Ms. Akemi Ishiwata has a wealth of insightIshiwata

on sustainability gained from previously
serving as Executive Officer of Kao
Corporation, leading its ESG activities. She
also has experience as a general manager incharge of public relations and corporate
branding. We expect to draw that insightand experience and have her supervise
management and provide advice onmanagement overall from her broad
perspective.

Voluntary Establishment of Committee(s)Established

Corresponding to Nomination Committee orRemuneration Committee

Committee’s Name, Composition, and Attributes of Chairperson
Committee Corresponding
Nomination Committee

toCommittee
Corresponding
Remuneration Committee

Committee’s Name

Nomination Committee

Remuneration Committee

All Committee Members

88

Full-time Members

00Inside Directors

33Outside Directors

55Outside Experts

0

0

14

to

Other00Chairperson

Outside Director

Outside Director

Supplementary Explanation
For the purpose of maintaining high transparency, the Company has formed the Nomination Committee andRemuneration Committee as internal committees of the Board of Directors. Please note that these 2 committees comprise
8 members each, and the chairpersons and other members are appointed from among members of the Board of Directors.
With respect to each of the 2 committees, a majority of the members and the chairperson have been appointed fromamong the Outside Directors.
1. Nomination Committee (Nomination Process) <At least once a year>
・The Nomination Committee deliberates on major management personnel matters and provides advice on thesematters to the Board of Directors. Such matters include the selection of candidates for the positions of Director,
Audit & Supervisory Board Member, and Executive Officer of the Company as well as the selection of Directors
and Audit & Supervisory Board Members for domestic insurance companies in which the Company has direct
investments.
・Outside directors shall comprise a majority of Committee members and the Committee chairman, who shall beselected by the Board of Directors. In fiscal 2022, after the Regular General Shareholders’ Meeting, the Committee
has 8 members made up of all 5 outside directors, Chairman & Director, Vice Chairman & Director and President.
・With respect to the evaluation of candidates for Director and candidates for Executive Officer, evaluation items
include performance evaluations (corporate performance) and other items.
・The Board of Directors appoints candidates for Director as well as candidates for Audit & Supervisory Board Member
and Executive Officers based on advice from the Nomination Committee. The utmost respect is given to that advice
in making selections. The consent of the Audit & Supervisory Board must be obtained for candidates for Audit &Supervisory Board Member.
・From the perspective of making effective discussions to strengthen corporate governance at the Nomination
Committee, policy for selecting candidates for Directors and Audit & Supervisory Board Members is added to thedeliberation items. It has been clarified that the Nomination Committee shall meet at least once a year.
・In fiscal 2021, the Nomination Committee met 6 times, and held discussions on issues, including the selection ofcandidates for Outside Director.
■ Please see “Criteria for the Selection of Director Candidates and Audit & Supervisory Board Member Candidates”
in the Appendix of the attached “Basic Policies on Corporate Governance”.

15

2. Remuneration Committee<At least once a year>
・This committee advises the Board of Directors regarding the remuneration of Directors and Executive Officers of theCompany as well as the remuneration systems for management of domestic insurance companies in which theCompany has direct investments.
・Outside directors shall comprise a majority of Committee members and the Committee chairman, who shall beselected by the Board of Directors. In fiscal 2022, after the Regular General Shareholders’ Meeting, the Committee
has 8 members made up of all 5 outside directors, Chairman & Director, Vice Chairman & Director and President.
・From the perspective of making effective discussions to strengthen corporate governance at the Remuneration
Committee, policy for remuneration of Directors and Executive Officers is added to the deliberation items. It has
been clarified that the Remuneration Committee shall meet at least once a year.
・In fiscal 2021, the Remuneration Committee met once.
■ For an overview of the process of determining remuneration, see the “Disclosure Regarding Policies for Determining
Amount of Remuneration and Method of Calculation,” below.

[Audit & Supervisory Board Member]
Establishment of Board of Auditors
Maximum Number of Audit & Supervisory
Board Member Stipulated in Articles ofIncorporation
Number of Audit & Supervisory Board
MemberEstablished6

4

Cooperation among Audit & Supervisory Board Member, Accounting Auditors and Internal Audit
Departments
1. Cooperation between Audit & Supervisory Board Member and Accounting Auditor
Audit & Supervisory Board Members shall receive reports and explanations on plans, operations and outcomes ofauditing from the Accounting Auditor in regular liaison meetings with the Accounting Auditor, also attended by theInternal Audit Department, and various issues on accounting audit shall be discussed when necessary. Furthermore,
Audit & Supervisory Board Members shall make an effort to share information with the Accounting Auditor, such asproviding information obtained in audit activities that is useful for audits by the Accounting Auditor.
2. Cooperation between Internal Audit Department and Audit & Supervisory Board Members (and Directors)
Internal Audit Department has been established as an organization to report directly to the Board of Directors. The
General Manager of the Internal Audit Department (General Manager of the Audit Department) shall report the resultsof internal audits at the Board of Directors, share information with Directors and Audit & Supervisory Board
Members, conduct regular liaison meetings with Full-time Audit & Supervisory Board Members and discussions with
Outside Directors and Outside Audit & Supervisory Board Members, to discuss issues such as internal audit planningand internal audit operations. Furthermore, outcomes of internal audits by the Internal Audit Department shall bereported all matters to Audit & Supervisory Board Members.
3. Cooperation between Accounting Auditors and the Internal Auditing Department
When so required, the Accounting Auditors and the Internal Auditing Department share information, and are working
to strengthen cooperation between them in order to conduct proper audits.

Appointment of Outside Audit & Supervisory Appointed
Board Member
Number of Outside Audit & Supervisory 2
Board Member
Number of Independent Audit & Supervisory 2
Board Member

16Outside Audit & Supervisory Board Member’s Relationship with the Company (1)NameAttribute

Relationship with the Company*a

Kunio Chiyoda

Certified public accountant

Kyoko Uemura

Lawyer

b

c

d

e

f

g

h

i

j

*

Categories for “Relationship with the Company”*“○” when the director presently falls or has recently fallen under the category;*“●” when a close relative of the director presently falls or has recently fallen under the category;

k

l

m

“△” when the director fell under the category in the past“▲”when a close relative of the director fell under the category in the pasta. Executive of the Company or its subsidiaryb. Non-executive director or accounting advisor of the Company or its subsidiaries
c. Non-executive director or executive of a parent company of the Company
d. Audit & Supervisory Board Member of a parent company of the Company
e. Executive of a fellow subsidiary company of the Company
f. A party whose major client or supplier is the Company or an executive thereof
g. Major client or supplier of the Company or an executive thereofh. Consultant, accountant or legal professional who receives a large amount of monetary consideration or other property
from the Company besides compensation as a Audit & Supervisory Board Member
i. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity)
j. Executive of a client or supplier company of the Company (which does not correspond to any of f, g, or h) (the Audit& Supervisory Board Member himself/herself only)
k. Executive of a company, between which and the Company outside directors/kansayaku are mutually appointed (theAudit & Supervisory Board Member himself/herself only)
l. Executive of a company or organization that receives a donation from the Company (the Audit & Supervisory Board
Member himself/herself only)
m. Others

Outside Audit & Supervisory Board Member’s Relationship with the Company (2)Name

Kunio Chiyoda

Designation as
Independent
Audit &
Supervisory
Board Member○

Supplementary
Explanation of theRelationship

Reasons of Appointment

Outside Director (Audit &Mr. Kunio Chiyoda is an expert inSupervisory Committee

accounting and auditing and has served as

Member), TERASAKI

a university professor and a member of a

ELECTRIC CO.,LTD

public institution. He has been stating

Outside Director, SEIWA

opinions at meetings of the Company’s

ELECTRIC MFG. Co., Ltd.

Board of Directors and on other occasions(Audit and Supervisory

based on his knowledge and experience.

Committee Member)

We appointed him as Outside Audit &Supervisory Board Member in order todraw on his knowledge and experience inKyoko Uemura○

the management of the Company.
Attorney-at-Law, Miyama,

As a legal professional, Ms. Kyoko

Koganemaru & Associates

Uemura has held a number of posts,

Outside Director, SoftBank

including a judge and attorney-at-law. She

Corp.

has been stating opinions at meetings of theOutside Director(Auditor),

Company’s Board of Directors and on

17

MABUCHI MOTOR CO.,other occasions based on her knowledgeLTD.

and experience. We propose to reappoint
her as Outside Audit & Supervisory Board
Member in order to draw on her knowledge
and experience in the management of theCompany.

[Independent Directors/Audit & Supervisory Board Members]
Numberof

Independent

Director/Audit&

7

Supervisory Board Member

Matters relating to Independent Directors/Audit & Supervisory Board Members
1. Outline
5 Directors and 2 Audit & Supervisory Board Members have been appointed from outside the Company toincorporate perspectives independent from management, strengthen monitoring and oversight functions, and conduct
highly transparent management.
Please note that there are no concerns that the interests of these Outside Directors and Outside Audit & Supervisory
Board Members of the various companies will be in conflict, in terms of human, capital, transactions, or otherrelationships, with the interests of shareholders in general. These Directors and Audit & Supervisory Board Members
are independent, and their names as independent outside officers have been filed with the Tokyo Stock Exchange Co.,
Ltd., and Nagoya Stock Exchange Co., Ltd.
2. [Principle 4.9] Independence standards and qualification for independent directors
Outside Directors and Audit & Supervisory Board Members are contributing to the strengthening of oversight andauditing functions to the Board and to ensuring the transparency of management. In addition, by receiving advice
from these Outside Directors and Audit & Supervisory Board Members based on their knowledge and experience as
professionals in the fields of law and accounting, the Company ensures that this system will enable proper decision
making on important matters.
Note that as stated in the attached Appendix to the “Basic Policies on Corporate Governance”, the Company has
formulated criteria for appointing candidates for Director and Audit & Supervisory Board Member, and under 1. (1) of
those standards has set forth criteria regarding eligibility and qualifications. 1. (3) also sets forth criteria regarding
independence from the company when appointing Outside Directors.
3. In the section on “Applicable Supplemental Information,” the minimum criteria set by the company fortransactions to be noted as attributes for Outside Directors are summarized as follows:(1) If the amount of transactions with the Company is less than 2% of the annual net sales of the Company or the otherparty;(2) A consultant, accounting professional, or legal professional who has received, other than officer compensation,
average cash or other financial benefits of less than 10 million yen per year for the past 3 years from the Company
or subsidiaries of the Company;[Incentives]
Incentive Policies for Directors

Performance-linked Remuneration / other

Supplementary Explanation
The Company has introduced performance-based remuneration (linked to corporate and personal performance) into its
corporate officer remuneration system. Please refer to Disclosure of Policy on Determining Remuneration Amounts andCalculation Methods below.
In order to realize a director remuneration system functioning as an appropriate incentive for improving linkage between
director remuneration and business performance and achieving sustainable growth for the purpose of strengthening
governance and increasing medium term corporate value of the Group, the Company has introduced a restricted stock
remuneration plan for Directors (excluding Outside Directors). The plan involves granting treasury stock or new stock(allotment of restricted stock) by replacing a portion of the Company’s performance-based monetary remuneration with
monetary remuneration receivables provided by means of contribution in kind.

18

The Company introduced the same system as mentioned above and granted treasury stock or new stock (allotment of
restricted stock) to the Company’s executive officers and the Directors (excluding Outside Directors) and Executive
Officers of Group domestic insurance companies in which the Company has direct investments, by replacing a portion of
the Company’s performance-based monetary remuneration with monetary remuneration receivables provided by meansof contribution in kind.
Recipients of Stock Options―――

Supplementary Explanation―――[Director Remuneration]
Disclosure of Individual Directors’ Remuneration

Selected Directors

Supplementary Explanation
We disclose the total amounts of remuneration to all Directors and to all Audit & Supervisory Board Members according
to the category (Directors/Audit & Supervisory Board Members) and according to the types of remuneration. We also
disclose total amounts of consolidated remuneration to officers amounting to 100 million yen or more.
Remuneration for fiscal 2018 is prior to the revision of the system. The standard ratio of performance-based remuneration
was 40% to 20% of the total remuneration amount, according to position, and the standard ratio of stock-based
compensation was 10% to 20% of the total remuneration amount, according to position.
Performance-based remuneration is calculated based on the Group Adjusted Profit and consolidated net income, andstock-based compensation consists of the allocation of stock acquisition rights as stock compensation-type stock options.
<Total amounts of remuneration to Directors and Audit & Supervisory Board Members for fiscal 2021>(Millions of yen)
Total amount of
remuneration

Directors(8 persons*)
Audit & Supervisory Board
Members(3 persons*)
Outside Officers(6 persons)Total amount of each type of remuneration
Fixed
remuneration

Performance-linked remuneration
Monetary
remuneration

Stock-based
remuneration

330

182

78

69

56

56

-

-

81

81

-

-

*Excluding Outside Directors and Outside Audit & Supervisory Board Members<Total amounts of consolidated remuneration amounting to 100 million yen or more>(including remuneration for corporate officer posts at main consolidated subsidiaries)(Millions of yen)
Total amount of

Total amount of each type of remuneration

consolidated

Fixed

Performance-linked remuneration

remuneration

remuneration

Monetary

Stock-based

remuneration

remuneration

Director Yasuyoshi Karasawa

123

61

31

30

Director Yasuzo Kanasugi

122

64

29

28

Director Noriyuki Hara

133

67

33

33

19

Policy on Determining Remuneration Amounts andEstablishedCalculation Methods

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods
Policies for determining the content of individual remuneration for Directors, etc.
The Board of Directors of the Company passed the following resolution on policies for determining the content of individual
remuneration for Directors, etc. at its meetings held on February 14, 2019, May 20, 2019 and May 20, 2021 after
deliberation by the Remuneration Committee of which a majority of the members are Outside Directors.
1.Basic policy
・The purpose is to strengthen governance and enhance the medium- to long-term corporate value of the Group.
・The officer remuneration system shall function as an appropriate incentive for sustainable growth, linking with thebusiness performance of the Company.
・The level of remuneration shall be competitive as a global company.
2.Decision process(1)Remuneration for Directors
・To ensure transparency, it shall be decided by resolution of the Board of Directors after deliberation by the
Remuneration Committee, of which a majority of the members are Outside Directors, within a range determined byresolution of the Shareholders Meeting.
・The Remuneration Committee provides advice to the Board of Directors on the amount of remuneration for
Directors and policies regarding decisions on the determination of officer remuneration.
・The Board of Directors respects the advice of the Remuneration Committee to the maximum possible extent. And
the amount of remuneration is determined after confirmation that it is in line with the remuneration systemestablished by resolution of the Board of Directors.
Furthermore, the Board of Directors has confirmed that, in regard to the individual remuneration of Directors for the
relevant fiscal year, the advice of the Remuneration Committee has been respected to the maximum possible extent
and it is in line with the remuneration system established by resolution of the Board of Directors. The Board of
Directors has therefore judged that it is in line with this basic policy for determining the remuneration of Directors.
(2)Remuneration for Audit & Supervisory Board Members
・It shall be decided by discussion among Audit & Supervisory Board Members within a range determined byresolution of the Shareholders Meeting, taking into consideration full-time/part-time, audit operation assignment,
the details and level of Directors’ remuneration.
3.Overview of remuneration(1)Composition of remuneration
Fixed remuneration

Directors(excluding Outside Directors)
Outside Directors
Audit & Supervisory Board
Members

Performance-linked remuneration
Monetary

Stock-based

remuneration

remuneration

✓

✓

✓

✓

-

-

✓

-

-

・Composed of fixed remuneration and performance-linked remuneration. Outside Directors and Audit& Supervisory Board Members shall be provided only fixed remuneration.

20

・Fixed remuneration is determined in accordance with officers’ position.
・Performance-linked remuneration is determined based on business performance.
・Performance-linked remuneration is composed of monetary remuneration and stock-based
remuneration.
・Fixed remuneration is paid on a monthly basis, and performance-linked remuneration is paid after
the end of each fiscal year.
・The standard proportions of the components of officer remuneration differ depending on the officer’s
position, as shown below. (This excludes Outside Directors and Audit & Supervisory Board
Members.)<President & Director>
The proportion of performance-linked remuneration is higher than for other positions.
(Standard ratios)[Fixed remuneration]
50%[Performance-linked[Performance-linked

remuneration]

remuneration]

Monetary

Stock-based

remuneration

remuneration

25%

25%

<Other positions>
The composition is such that the proportions of fixed remuneration and performance-linked
remuneration differ depending on the officer’s position(Standard ratios)[Performance-link
ed remuneration][Fixed remuneration]

Monetary

Approx. 60% - approx. 70%

remuneration
Approx. 20%[Performance-link
ed remuneration]
Stock-based
remuneration
Approx. 10% approx. 20%(2)Contents of stock-based remuneration
・Restricted stock shall be provided as stock-based remuneration and in principle, the Transfer
Restrictions shall be released upon retirement of the related Director.
・If it is found that a Director was involved in a fraudulent act while in office, the Company acquires
the restricted stock for free during the Transfer Restriction Period or the Director is made to return
it after the transfer restriction is released.
Overview of restricted stock remuneration plan
Eligible Directors

Directors excluding Outside Directors

Amount of monetary remuneration to be

200 million yen per year

provided (maximum)
Type of shares to be allotted

Common shares (with transfer restrictions
under a restricted stock allotment agreement)

Number of shares to be allotted

130,000 shares per year

(maximum)Transfer restricted period

Period from the allotment date to the date on
which the related Eligible Director resigns orretires as the Company’s Director or from21

another position which the Board of Directors
has determined.
4.Key performance indicators pertaining to performance-linked remuneration
・Performance-linked remuneration shall be linked with the business performance of the Company anddetermined based on financial and non-financial indicators.
・Financial and non-financial indicators have been selected after taking into consideration the Group’s
Medium-Term Management Plan, “Vision 2021,” and the details of indicators and reasons for theirselection are as follows.
(1)Financial indicators
・Financial indicators are indicators that are used to reflect business performance in a single fiscal
year in officer remuneration.
Indicator

Reasons for selection

・ Group Adjusted Profit (*1)

These indicators have been selected based on the fact that・ Consolidated Net Income

Group Adjusted Profit and Group Adjusted ROE are given as

・ Group Adjusted ROE (*2)

numerical targets in the Group’s Medium-Term Management
Plan, “Vision 2021,” as well as the fact that Consolidated Net
Income is a key indicator of business performance for theGroup.

*1:Group Adjusted Profit
Consolidated net income ＋ provision for catastrophe loss reserve and others － other incidental
factors (amortization of goodwill and other intangible fixed assets, and others) ＋ equity inearnings of the non-consolidated group companies*2:Group Adjusted ROE
Group Adjusted Profit ÷ average of beginning and ending amounts on BS of adjusted net assets(consolidated net assets ＋ catastrophe reserves, and others － goodwill and other intangible
fixed assets)(2)Non-financial indicators
・Non-financial indicators are indicators that are used to reflect initiatives contributing to medium- tolong-term business performance in officer remuneration.

Evaluation item
Sustainability

Reasons for selection〇 Key sustainability

These indicators have been selected as

issuesnon-financial evaluation items in order to・ Deal with new risks

ensure that, under the “key・ Create comfortablesustainability issues” raised in “Visionmobility society

2021,” officers contribute to the creation

without accidents

of “quality that earns the trust of society”

・ Strive for resilientand “management platforms that enablecommunity

employees to play active roles,” as well as

development

to create shared value with society.

・ Support “good healthand longevity”
・ Contribute to climatechange mitigation
and adaptation
・ Strive to improve22

sustainability ofnatural capital・ Work towardrealization of “leaving
no one behind”〇 Quality that earns
the trust of society〇 Management
platforms that enable
employees to play
active roles
Key Strategies〇 Pursue the Group’s

The three items on the left have been

comprehensive

selected as non-financial evaluation

strengths

items because they are “Key Strategies”〇 Promoteunder “Vision 2021.”

digitalization〇 Reform portfolio(3)Application methods for financial and non-financial indicators
・The standard ratio between financial and non-financial indicators used in the calculation of
performance-linked remuneration shall be “50:50.”
・The application coefficients for financial and non-financial indicators shall vary within ranges of 0 to
3.0 and 0.5 to 1.5, respectively, with 1.0 as the standard.
・The monetary remuneration and stock-based remuneration components of performance-linked
remuneration shall each be calculated as follows, based on standard amounts for each position.
Monetary remuneration:

Standard amount per position × business performance coefficient(financial indicators × 80% + non-financial indicators × 20%)
Stock-based remuneration: Standard amount per position × business performance coefficient(financial indicators × 20% + non-financial indicators × 80%)
・Monetary remuneration is structured such that it more strongly reflects business performance in asingle fiscal year, by having a higher ratio for financial indicators than non-financial indicators.
・Stock-based remuneration is structured such that it more strongly reflects an evaluation of initiatives
contributing to the enhancement of corporate value over the medium- to long-term, by having ahigher ratio for non-financial indicators than financial indicators.
5.Resolutions related to officer remuneration at the Shareholders Meeting<Remuneration of Directors>
Shareholders Meeting held on June 25, 2018 [10th Annual Shareholders Meeting]
Resolved that the maximum amount of remuneration of Directors in total (exclusive of wages as
an employee payable to a Director also serving as an employee) shall be 500 million yen per year(of which remuneration for Outside Directors shall be no more than 100 million yen per year). The
number of Directors was 12 (including 5 Outside Directors) as at the close of the Annual
Shareholders Meeting.
Shareholders Meeting held on June 24, 2019 [11th Annual Shareholders Meeting]
Resolved to introduce a new restricted stock remuneration plan with delayed delivery and that the
total amount of monetary remuneration receivables to be paid for the allotment of restricted stock
to Directors other than Outside Directors shall be up to 200 million yen per year. The number of
Directors other than Outside Directors was 7 as at the close of the Annual Shareholders Meeting.

23

<Remuneration of Audit & Supervisory Board Members>
Shareholders Meeting held on June 25, 2009 [1st Annual Shareholders Meeting]
Resolved that remuneration shall be up to 110 million yen per year. The number of Audit &Supervisory Board Members was 4 as at the close of the Annual Shareholders Meeting.

[Supporting System for Outside Directors and/or Audit & Supervisory Board Members]
Support for the activities of the Outside Directors is provided by the Corporate Planning Department, and support for theOutside Audit & Supervisory Board Members is supplied by the Internal Audit Department. The agenda for the Board of
Directors’ Meetings is explained to the Outside Directors and Outside Audit & Supervisory Board Members in advance ofthe meetings by the Corporate Planning Department, which acts as the secretariat for the Board of Directors. In addition,
information, such as important risk information, is reported on an ongoing basis to all Directors and Audit & Supervisory
Board Members, internal and external.
■ For more-detailed information, please see Chapter 3.8 ”Support Systems for Directors and Audit & Supervisory Board
Members” in the attached “Basic Policies on Corporate Governance”.

[Retired presidents/CEOs holding advisory positions (sodanyaku, komon, etc.)]
Employment terms
Job title/(Full/part time,
Name
Responsibilities
position
with/withoutcompensation, etc.)
ToshiakiEgashira
Takeo
Inokuchi
Masao
OkazakiHisahito
Suzuki

Senior Advisor,
Mitsui Sumitomo
Insurance
Honorary Advisor,
Mitsui Sumitomo
Insurance
Advisor,Aioi Nissay Dowa
Insurance
Senior Advisor,
Aioi Nissay Dowa
Insurance

External relations in the business
community (not involved inmanagement)
External relations in the business
community (not involved inmanagement)
Important external relations withGroup companies (not involved inmanagement)
Advice related to management
etc.

Date whenformer role aspresident/
CEO ended

TermPart time
With compensation

2016/6/22

Yearlycontract

Part time
Without compensation

2006/6/28

Yearlycontract

Part time
Without compensation

2006/6/29

Yearlycontract

Part time
With compensation

2021/6/25

Yearlycontract

Number of retired presidents/CEOs holding advisory positions (sodanyaku, komon, etc.)：4
Others
1. Those who have formerly served as Chairman or President of the Company or its core subsidiaries (Mitsui Sumitomo
Insurance and Aioi Nissay Dowa Insurance; including their predecessors prior to the mergers) may be nominated as
Advisors, etc. of the core subsidiaries as follows. We do not have a counsel system.
(1) Mitsui Sumitomo Insurance
Mitsui Sumitomo Insurance nominates former Chairman or President as “Senior Advisors(Jonin-Komons)” (with aterm of office of up to 4 years). Persons who have retired as Senior Advisors (Jonin-Komons) may then be nominatedas “Senior Advisors (Tokubetsu-Komons).” In either case, the term of office is up to the end of the fiscal year in which
he/she turns 75 years old. Compensation is paid to those who will be newly nominated as Senior Advisors(Jonin-Komons) in and after fiscal 2018, only for the period they were Senior Advisors (Jonin-Komons). In addition,
those who retired as Senior Advisors may be titled “Honorary Advisor” without compensation.
(2) Aioi Nissay Dowa Insurance
Aioi Nissay Dowa Insurance may nominate former Chairman, vice Chairman, or former President as KOMONs;“Advisor” without compensation or “Senior Advisor”. Their contract

24

term is up to 3 years.

2. Advisors, etc. do not participate in management meetings, meetings of the Board of Directors and any other internal
meetings, and do not engage in management decision making in any form.
* The dates listed under “Date when former role as president/CEO ended” are the most recent dates they retired as
Chairman or president/CEO.

2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination andRemuneration Decisions (Overview of Current Corporate Governance System)(1) Matters on Functions of Business Execution and Oversight■ For the Outline, please see the Chapter 3 in the attached ”Basic Policies on Corporate Governance”.
(1)-1 Board of Directors
a. Role of the Board of Directors [Principle 4.1] [Supplementary Principle 4.1.1](a) In addition to matters specified by law and the Articles of Incorporation, the Board of Directors discusses anddecides upon important matters involving Group management strategy and corporate management, including theGroup’s management policies, management strategies, and capital policy, in addition to overseeing the duties of
directors and executive officers.
(b) The Board of Directors allocates management resources according to risk appetite controlled with a balance of risk,
return, and capital, and aims to increase enterprise value in the medium-to-long term by achieving sustainablegrowth and improvement in earnings and capital efficiency with a foundation of soundness.
(c) In addition to appointing executive officers, the Board of Directors aims to separate management decision making
and oversight by the Board of Directors from business execution by executive officers by clarifying their respectiveroles.
(d) Executive officers are responsible for executing business in the respective areas of business entrusted to them by
the Board of Directors, and report on the status of business execution to the Board of Directors.
b. Composition of the Board of Directors
・More than one-third of the Board of Directors which has 11

members (8 men and 3 women) are nominated as

Outside Directors to incorporate perspectives independent from management, strengthen monitoring and oversightfunctions, and conduct highly transparent management.
c. Important responsibilities of the Board of Directors (determining the Group’s strategic direction and the
management plan)
・Under the Group’s Medium-Term Management Plan, the Board of Directors has put forward the Group’s Corporate
Philosophy (Mission), Corporate Vision and Values (see III 3., Efforts Involving Respect for the Position of
Stakeholders), and supervises its efforts to realize and achieve them.
・In formulating the Group’s Medium-Term Management Plan, constructive discussions were held at the GroupManagement Committee , followed by discussions at the Board of Directors and a resolution was made. Regarding
execution of the Group’s Medium-Term Management Plan, timely summarization is provided, a PDCA cycle isbeing run to achieve that plan based on discussions among the Board of Directors, and constructive discussions willcontinue to be held in the future. The Board of Directors also checks the progress of Medium-Term Management
Plans for each of the Group’s operating companies. Note that explanations are provided at the General Shareholders’Meeting and at Group Information Meetings.
(1)-2 Governance Committee （About twice a year）
The Governance Committee whose chairperson is elected by mutual vote of the Outside Directors has been established
for the purpose of discussion by all Outside Directors, Chairman & Director, Vice Chairman & Director and President
regarding matters related to the status of, policies regarding and stance on corporate governance.
(1)-3 Group Management Committee
The role of the Group Management Committee is to discuss management policies, management strategies, and othermatters that are key issues to the Company and the other Group companies. Regarding items determined by executive
officers, the committee also monitors specific business operations by receiving reports on approved matters under therules for the Group Management Committee. The Group Management Committee met 12 times in fiscal 2021.

25

All of the presidents of the five Group domestic insurance companies in which we directly invest attend the meeting as
members to discuss important issues concerning the Group's domestic insurance companies.
(1)-4 Task-Specific Committees
The task-specific committees have been established to deliberate on various key management issues regarding theexecution of operations as well as to coordinate perspectives across various departments. When necessary, the Director(s)and/or Executive Officer(s) in charge summarize the results of discussions in these committees and report them to theBoard of Directors and/or the Group Management Committee.
a. Sustainability Committee （Basically 4 times a year）
The committee discusses matters related to the Group’s initiatives and plans related to sustainability, promotion ofdiversity & inclusion, improvement of capability of human assets (Work Style Reforms) and policies and plans related
to branding strategy and advertising strategy of the entire Group. The Sustainability Committee met 5 times (including
once in writing) in fiscal 2021.
b. Quality Improvement and Compliance Committee （Basically 4 times a year）
The committee monitors issues in improving quality such as promotion of business operation on a customer-first basis,and compliance matters in pursuit of establishment of corporate ethics at the Group and each company, and deliberates
and coordinates important matters related thereto. Quality Improvement and Compliance Committee met 5 times(including once in writing) in fiscal 2021.
c. Digitalization Committee（Basically 4 times a year）
The committee deliberates and coordinates such issues as promotion of digitalization of the Group companies, andmanages the progress thereof. The Digitalization Committee met 4 times in fiscal 2021.
d. Group Systems Committee（Basically 4 times a year）
The committee deliberates, coordinates, and manages such issues as IT strategy, system risk management, and thelarge-scale system development of the Group companies. The Group Systems Committee met 13 times (including 7
times in writing) in fiscal 2021.
e. Group International Business Committee（Basically 4 times a year）
The Committee confirms and discusses the vision for International Business strategy (International Business investment,etc.) that contributes to sustainable Group growth. It also shares common understanding of issues regarding the role ofInternational Business in strengthening overall Group profitability and demonstrating synergies, and confirms anddiscusses the direction of measures for handling those issues and their progress. The Group International BusinessCommittee met 3 times (including twice in writing) in fiscal 2021.
f. ERM Committee（Basically 4 times a year）
In order to improve the corporate value, financial soundness, capital efficiency and profitability of the entire Group, we
discuss and coordinate the key issues such as portfolio reforms.
We also manage and monitor the following items.
・Risk / Return / Capital status
・Evaluation and management of business and products of each group company
・Risk management status
The ERM Committee met 8 times (including 4 times in writing) in fiscal 2021
g. Group Standardization Committee
Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance have two distinctive fronts. In order to make it easier toinvest in growth areas while taking advantage of diversity, discussions and coordination are being conducted topromote the sharing and collaboration of middle and back divisions, in addition to dealing with conventional systems
areas.
Group Standardization Committee met 3 times in fiscal 2021.
.
(2)Matters on Functions of Nomination and Remuneration■ Matters on Functions of Nomination
Please see the above II.1 “Supplementary explanation” 1.Nomination Committee (Nomination Process)26

■ Matters on Functions of Remuneration
Please see the above II.1 “Disclosure of Policy on Determining Remuneration Amounts and Calculation”.
(3)Matters on Functions of Auditing and Oversight(3)-1 Audit & Supervisory Board Members and Audit & Supervisory Board
a. Roles and Responsibilities of Audit & Supervisory Board Members
・As an independent entity entrusted with authority by the shareholders, the Audit & Supervisory Board Members are
responsible for ensuring the sound and sustainable growth of the Company and the Corporate Group, andestablishing good corporate governance in response to the public trust by supervising the performance of duties of
the Directors, and work to maintain an independent position and a fair and unbiased attitude, acting in accordancewith their own beliefs.
・Each Audit & Supervisory Board Member shall appropriately exercise his/her legal investigating authority, including
the authority to audit operations and assets, and supervises the performance of duties of the Directors by attending
meetings of the Board of Directors and other important meetings, viewing important approval documents,
investigating departments within the Company, and investigating subsidiaries in accordance with the auditing
policies and plans stipulated by the Audit & Supervisory Board.
・Audit & Supervisory Board Members participate in joint meetings of Outside Directors and Auditors, etc. and work toshare information with Outside Directors.
b. Composition and Roles of the Audit & Supervisory Board
・The Audit & Supervisory Board comprises a majority of Outside Audit & Supervisory Board Members. As
independent officers, Outside Audit & Supervisory Board Members have independence, and a significant degree ofexpertise and knowledge. Full-time Audit & Supervisory Board Members also have sophisticated information
gathering capabilities based on extensive operational experience, and the organic combination of the 2 serves toenhance audit effectiveness.
・The Audit & Supervisory Board receives reports from Audit & Supervisory Board Members on the status of theperformance of their duties and reports from officers and employees, etc. on important matters related to auditing,and also makes decisions regarding auditing policies and auditing plans.
(3)-2 Appointment of Accounting Auditors, etc.
・The Audit & Supervisory Board makes decisions regarding proposals submitted to the General Shareholders’ Meeting on
the appointment or dismissal of Accounting Auditors. It also has the right to consent to decisions regarding
remuneration of the Accounting Auditors.
・The Audit & Supervisory Board prepares criteria for appropriately selecting and evaluating Accounting Auditor. To
promote appropriate accounting by the Accounting Auditors, measures are taken to confirm the independence,
specialist capabilities, and other requisite characteristics of the Accounting Auditors.
・The Company has appointed KPMG AZSA LLC as its independent audit corporation. Please note that there are no
special conflicts of interest between KPMG AZSA LLC and the Company.
(3)-3 Efforts to Enhance Outside Audits
a. Prior to an audit, we works with the Accounting Auditors to confirm schedules and provide information that cancontribute to audit efficiency and effectiveness, ensuring sufficient time to conduct the audit.
b. The Accounting Auditors meet for discussions with the Representative Director & President biannually (at the midterm
and at fiscal year end), and with officers in charge of accounting, etc. at fiscal year end.
c. The Accounting Auditors work to coordinate with both the Audit & Supervisory Board Members and the Internal Audit
Department by attending regular liaison meetings, while also exchanging opinions with each individually as needed.
d. In the event the Accounting Auditors have pointed out deficiencies in internal control audits relating to financial reports,
the department in charge promptly formulates measures for improvement, the implementation of which is verified by
the internal auditors and the Accounting Auditors. The results of internal control audits and the status of improvement
measures are reported to the ERM Committee (task-specific committee), and those results are then reported to theBoard of Directors. A system is also in place for timely reporting in the event an internal control audit uncovers a
deficiency that might be considered an important deficiency that should be disclosed.
(4) Conclusion of Agreements Limiting Liability
To ensure that Outside Directors and Outside Audit & Supervisory Board Members can fully perform the roles expected27

of them, the Company has entered into agreements with its Outside Directors (5) and Outside Audit & Supervisory Board
Members (2) limiting their liability in the event of damage caused to the Company by the failure to perform the duties of
Director or Audit & Supervisory Board Member, and providing that if those duties have been conducted in good faith andwithout gross negligence, the amount of liability shall be limited to the sum of the amounts stipulated in the items of
Article 425, Paragraph 1 of the Companies Act.

3. Reasons for Adoption of Current Corporate Governance System
・As a company with an Audit & Supervisory Board, the Company will endeavor to improve governance by ensuring thatindependently appointed Audit & Supervisory Board Members appropriately act in their auditing functions, in addition
to ensuring that the Board of Directors appropriately acts in its oversight functions, while strengthening the functionsof each and actively disclosing information.
・The Company has formed the Governance Committee (made up of all outside directors, Chairman & Director, Vice
Chairman & Director and President) in addition to the Nomination Committee and Remuneration Committee (amajority of the members and a chairperson each have been appointed from among the Outside Directors) as internal
committees of the Board of Directors, thus building a highly effective and transparent corporate governance system.
・In addition to appointing executive officers, the Board of Directors aims to separate management decision making andoversight by the Board of Directors from business execution by executive officers by clarifying their respective roles.
Under the above structure, the Company believes that the Board of Directors is fully capable of carrying out its roles andresponsibilities as required under Basic Principle 4 of the Corporate Governance Code.
■ For governance structure, please see “Management Structure Diagram” described at the end of this report.

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize the General Shareholders’ Meetings and Smooth Exercise of Voting
RightsSupplementary Explanations

Early Notificationof General
Shareholders’Meeting

In order to ensure shareholders have adequate time to consider the agenda for the General
Shareholders’ Meeting, the Company works to send out notification early. Notification of the
14th Regular General Shareholders’ Meeting was sent out June 3 (Friday), 2022. The content
of the notices is also published on TDnet and the Company’s website prior to their being
sent.

Scheduling AGMs
Avoiding the PeakDay
Allowing
Electronic
Exercise of Voting
RightsParticipation inElectronic Voting
Platform
ProvidingConvocation
Notice in English
Other

In the interest of enhancing constructive dialog with shareholders, General Shareholders’Meetings are scheduled to avoid peak dates.
The 14th Regular General Shareholders’ Meeting was held on June 27 (Monday), 2022.
Allowing electronic exercise of voting rights via the internet.

Participating in electronic voting platform.

Providing Convocation Notice in English on our web site.

Because the General Shareholders’ Meeting is an opportunity for constructive dialog withshareholders, the Company has put in place a suitable environment, as noted above andbelow, for the exercise of rights at the General Shareholders’ Meeting from the viewpoint of
the shareholders and with the goal of operating the Meeting in a way that is easy tounderstand.
・To ensure shareholders are able to make suitable decisions at the General Shareholders’Meeting, and to provide shareholders with accurate information along with an outline of a
Medium-Term Management Plan, have been included in the Notification of the General
Shareholders’ Meeting.

28

・In the event institutional investors owning shares in the name of a trust bank, etc. wish to
exercise their voting rights at the General Shareholders’ Meeting, the Company shallreview whether or not to allow said voting rights to be exercised based on discussion withthe trust bank, etc. in whose name they are held.

2. IR Activities
Briefings
Supplementary Explanations

conducted by the
representative
him/herself

Preparation and

The Company has established "MS&AD Insurance Group Basic Policy for

Publication ofDisclosure of Information” which stipulated basic stance, standards andDisclosure

methods for disclosure of information, and has posted it on the website.

Policyhttps://www.ms-ad-hd.com/en/group/value/dialogue/disclosure.html

Regular Investor

In addition to holding briefings at securities firms and elsewhere for

Briefings forindividual investors, led by the executive officer in charge of the Corporate

Individual

Communications and Investor Relations Department, briefings are also held

Investors

several times a year by the General Manager of the Corporate

No

Communication and Investor Relations Department or the person in chargeof IR.
Regular Investor

Information Meetings to explain management strategy are held twice a

Briefings foryear, led by the President.

Analysts andFinancial briefings (conference calls) are held quarterly, 4 times per year,

Institutional

led by the general manager of the Corporate Communications and Investor

Investors

Relations Department, and the general manager of the Accounting

Yes

Department.
As part of an effort to enhance dialog under a stated Policy for Constructive
Dialog with Shareholders, the Company holds “MS&AD IR Day” that
contains briefings by the top management of each operating companies
regarding particular businesses and exchange of opinions between investors
and management including the Chairman and the President, with the goal ofengaging investors in a constructive dialog.
Regular Investor

The President and the Senior Executive Officer in charge of Corporate

Briefings forCommunications and Investor Relations visit North America, Europe andOverseas

Asia regularly to meet with overseas investors.

Investors

The Senior Executive Officer in charge of Corporate Communications andInvestor Relations also participates in conferences for overseas investors
hosted by securities firms.
Presentations and Q&A transcripts from the above briefings for analysts
and institutional investors are translated into English and posted on the
Company website.

Posting of IR

The following materials are posted on the Company website

Materials on(https://www.ms-ad-hd.com/en/).

Website・Timely disclosure information including financial results t(News releaseand topics)
・Financial report and quarterly report
・Materials for Information Meeting, video and summery of Q&A session
・Status of Corporate Governance・Stock and Bonds information

including the notice of General

Shareholders’ Meeting.
・Disclosure documents, Sustainability Report, Annual report andShareholders newsletter.
Mail notifications are also sent out when a news release or otherinformation is posted.

29

Yes

Establishment of

Officer in charge of IR : Tetsuji Higuchi, Representative Director,

Department

Executive Vice President, CFO

and/or Manager

Department in charge of IR : Corporate Communications and Investor

in Charge of IR

Relations Department

Preparation andInformation for timely disclosure and other IR disclosures are primarily

Publication

made in Japanese through the website, as well as in English at a level thatofDisclosure

ensures no significant disparities arise.

PolicyThe Company is also constantly working to improve disclosures in English
to ensure no gaps arise with disclosures in Japanese in terms of volume ortiming of information disclosed.

3. Measures to Ensure Due Respect for Stakeholders
Stipulation ofInternal Rules for
Respecting the
Position of
Stakeholders

Supplementary Explanations
We state in the “Chapter 2: Relationship with Stakeholders in the “Basic Policies on
Corporate Governance” that we will fulfill our responsibilities to stakeholders based on theposition of our stakeholders through active dialogue with our stakeholders. With regard tosustainability issues, we have established and published the "Business Activities with
Consideration for Sustainability".
https://www.ms-ad-hd.com/en/csr/summary/materiality.html"MS & AD Insurance Group Basic Policy on Human Rights" stipulates and publicly
announces that we recognize our responsibility for the actual and potential negative impactof our business activities on human rights, including the value chain, and we promote actions
and dialogue that will show respect towards human rights.
(URL for Policy on Human Rights and Human Rights Due Diligence)https://www.ms-ad-hd.com/en/csr/community/human_rights.html

Implementation ofEnvironmental
Activities, CSR
Activities etc.

To realize its Corporate Philosophy (Mission) of “Contributing to the development of avibrant society and helping secure a sound future for the earth,” the Company is putting into
practice “Story of Value Creation” as its business model, whereby the Company identifies
and informs of risks arising from social issues, prevents risks from occurring or minimizes
their impact, and reduces the economic burden in the case of a risk occurring.
In the Group’s Medium-Term Management Plan from April 2022, we defined “A corporategroup that supports a resilient and sustainable society” as a qualitative target of ouraspirations. For the Group to sustain growth in the future, with a presence widely supported
by stakeholders in society, it is even more essential that it continues creating shared value(CSV) through corporate activities. Based on this recognition, we will implement the “Storyof Value Creation” and realize a “resilient and sustainable society,” following SDGs
(sustainable development goals) as our milestone.
In September 2020, toward the realization of "resilient and sustainable society", weannounced a commitment to considering sustainability issues in all business activities as“Business Activities with Consideration for Sustainability". The commitment was updated
twice in June 2021 and June 2022
（URL for " Business Activities with Consideration for Sustainability "）https://www.ms-ad-hd.com/en/csr/summary/materiality.html
Furthermore, in May 2021,we reviewed our Green House Gas Emission reduction and haveset and announced a goal of Net Zero Green House Gas emissions by FY 2050 ” MS & AD
Insurance Group Initiatives To Achieve Net Zero By 2050” to resolve the global risk ofclimate change.
We also set 2030 interim targets for Green House Gas emission reduction and renewableenergyuse.
We are committed to reducing our company's Green House Gas emissions, and we will
promote initiatives together with our customers, agents and other stakeholders.
In addition, we have hold our “Sustainability Contest” every year for all Group companies
both inside and outside Japan in order to deepen Group employees’ understanding towards
the importance of pursuing SDGs to incorporate these approaches into their day-to-day
operations. Resolving social issues via the creation of new business models and sharing

30

approaches among entire Group employees through the Sustainability Contest has led to a
virtuous cycle that extends these approaches laterally across the Group.
For details of the initiatives, please see our website.
https://www.ms-ad-hd.com/en/csr.html
Development of

The Company adopted "MS&AD Insurance Group Basic Policy for Disclosure of

Policies on

Information” for the purpose of communicating important information with our stakeholders

Information

in a manner that is accurate, timely and faire.

Provision tohttps://www.ms-ad-hd.com/en/group/value/dialogue/disclosure.html

Stakeholders
Other

1. Diversity & Inclusion
・Respecting each individual, accepting each other and making use of each otherʼs strengths,
regardless of the external attributes of individuals such as race, gender or age or internal
attributes such as religion, beliefs, background and values in order to demonstrate to the
maximum extent diversity and diverse values, which are strengths of the Group.
・We believe that it is important for core human assets, including those in management
positions, to ensure diversity in knowledge and experience, such as experience, values,and expertise. We will therefore actively appoint women, foreign nationals and mid-careerhires to management positions.
・ Each employee works enthusiastically, displays their abilities as professionals anddemonstrates teamwork.
・We are further strengthening diversity & inclusion initiatives under the group-wide
promotion system.
(1) Promoting Career Development for Womena. Women in management positions
The Group believes that it is important for the “growth of employees” and the “growthof the company” that female employees take on the challenge of work and roles where
they may be more active while leveraging their own strengths and characteristics. As aresult of setting the target ratio of women in management positions (*1) at 30% for fiscal
2030 (Group Domestic Total) and continually holding trainings, etc. to foster anawareness of increasing skill levels and advancing their careers in order to take on
management positions, the number of women in management positions reached 1,054
and the ratio of women in management positions reached 17.5% (as of April 2022) andis steadily increasing every year.
Moreover, the Group is working on bringing to fruition more diversity in individuals
serving as decision-makers by setting the target ratio of women serving as line managers(*2) at 15% for fiscal 2030( 10.5% as of April 1, 2022).
*1: Individuals serving in positions of manager and above*2: A management position involving the undertaking of line management
And furthermore, the Group has the target ratio of hiring new graduates and permanent
employees for women is 50 % or more, and had achieved them every year. In addition,
the CEO has announced his support for the “Declaration on Action by a Group of Male
Leaders who will Create a Society in which Women Shine”, which comprises maleleaders of companies actively working to promote the career advancement of women.
[Share of management positions held by women]
Target for FY2030: 30% (Group Domestic Total)
Following is the status of major group companies
FY2019FY2020

FY2021

MSI

15.1%

（396）

16.5%

(426)

18.9%

(456)

ADI

14.5%

（376）

15.6%

(401)

16.2%

(403)

17.3%

(22)

17.9%

(95)

MD
MSI
Life

Aioi

14.5%

（16）

16.5%

(18)

13.9%

（86）

16.6%

(95)

31

MSI

Primary

Life

14.3%

（27）

16.3%

(33)

17.2%

(37)

The Company

16.9%

（43）

16.7%

(44)

15.7%

(41)

Total

14.8%

（944）

16.1%

(1,017)17.5%(1,054)*As of April 1 following the end of each fiscal year, figures in parentheses indicate numberof persons
b. Female officers
In May 2019, the CEO became a member of the 30% Club Japan, which is a global
campaign for the advancement of female officers. The ratio of female members of theBoard of Directors in the holding company (Directors + Audit & Supervisory Board
Members) is currently 33.3% (5 out of 15), having achieved the target of increasing theratio to 30% or more by fiscal 2025. Moreover, while the ratio of female officers(Directors, Audit & Supervisory Board Members, and Executive Officers) serving at theCompany is currently 24.1% (7 out of 29), in order to achieve the target of increasing theratio to 30% or more by fiscal 2030, the Group has been implementing leadership training
programs and mentor programs for women in management positions.
In order to build a “pipeline” for fostering candidates for female officer on a continuous
basis, the Group has set up the Female Managers Committee, an organization made up of
70 or more female managers in total from each group company. The committee’s activities
have included the holding of group discussions with officers of group companies. Some
members of the committee have been appointed part-time director of affiliated companies.
They are learning about management-level decision making.
c. Changing awareness of officers and management
In fiscal 2021, several Company officers organized and presided over a seminar for theemployees of the Group companies as a venue for practicing and experiencing an inclusive
leadership style that draws out and effectively utilizes a diversity of opinions. The
initiative was designed to draw out a variety of opinions based on the diverse knowledge
and experience of the participants in the seminar and to find new insights and create newvalue. This was done by having the officers demonstrate “inclusive leadership” while
ensuring the emotional safety of employees.
In fiscal 2022, we expanded the initiative by having the officers of each Group company
organize and preside over the seminar.
We are also working on initiatives to change the awareness of those in management
positions by incorporating “inclusive leadership” into management position training
agendas.
In addition, a D&I evaluation factor was reflected in officers’ compensation andperformance evaluations in order to enhance the effectiveness of diversity at the
management level.
As initiatives to change awareness of management, the Company is undertaking
management training and e-Learning to teach methods of understanding unconscious bias,“realizing” one’s own bias, and “controlling” this bias.
In addition we have positioned management that respects diversity regardless ofnationality, gender, age or disability as an evaluation factor for those in management
positions.
(2) Appointment of Foreign Nationals
・The Group actively appoints overseas employees as officers of its overseas subsidiaries
to promote global business expansion. In order to continue to promote the appointmentof overseas employees, we have set the target for the “ratio of appointment of overseas
employees among officers at overseas subsidiaries” to “above the current level” and areworking to achieve this target.

32

[Ratio of appointment of overseas employees among officers at overseas subsidiaries]
81.0% as December,2021(3) Appointment of Mid-career hires
・The Group actively appoints mid-career hires to management positions, and in order tocontinue to promote the appointment of mid-career hires, we have set the target for the“ratio of appointment of mid-career hires among officers” to “above the current level”
and are working to achieve this target.
[Ratio of appointment of mid-career hires among officers]22.1% as of April 1, 2022(total for the Group’s 5 domestic insurance companies)(4) Employment of People with Disabilities
・Group companies continue to engage in hiring activities to expand and anchor places of
employment for the disabled. They are also adapting workplaces into friendly
environments and developing duties performed by people with disabilities.
As of April 1, 2022, the percentage of employees with disabilities stood at 2.53%(Group Domestic Total), which exceeds the minimum employment rate required bylaw.
・On June 1, 2018, the Company has established “MS&AD ABILITYWORKS Co., Ltd.”for the purpose of employing people with disabilities and enabling them to play activeroles.
MS&AD ABILITYWORKS Co., Ltd. establishes an environment where people withdisabilities can maximize their abilities and aptitudes, and creates a workplace where
people with disabilities can work actively. In addition, as a specialty institution within
the Group for the employment of people with disabilities, the Company is working incollaboration with all Group companies to promote the employment of people withdisabilities throughout the Group.
(5) Employment of the Elderly
Group companies have a rehiring program for employees who have reached retirementage. This program allows employees to utilize their experience and skills and make fulluse of their capabilities. Participation can be renewed if required by the work involved
and by the individual’s job description, with employment available to a maximum of 65
years of age.
As of March 31, 2022, the number of re-employed retirees (total of new hires andcontinuing employees) was 659 at MSI and 733 at ADI.
(6) Work Style Reforms
The Group has been promoting work style reforms and, as well as reducing working
hours, including through “leaving the office by 7:00 p.m. in principle”, “promoting thetaking of annual leave”, and “improving the efficiency of operations”, while also working
to improve productivity, including through management practices that improve theexpertise and leverage the diverse abilities of each individual employee.
In addition, the Group is creating an environment where diverse employees can continue
to work and play active roles through the spread of flexible work styles effectively
utilizing working hours and work space, including shift work that enables different
working hours each day, and a paid-leave system in units of half days or hours, while
promoting the active use of remote work such as working from home and online meetings.

(7) Work-life Balance
The Group is developing various systems to enable employees to feel a sense of job
satisfaction and a sense of growth, and to work actively in good health while maintaining
a work-life balance.
・There are systems where employees who are not subject to transfer entailing a change of33

residence can change their place of employment under certain circumstances, andsystems whereby employees who have retired due to life events can return to work after
their retirement and systems for self-development leave.
・We are promoting male employees to take childcare leave for a specified period of time
(Papa Childcare Leave) so that each individual employee can have flexible andwide-ranging values through experiences such as being present at the birth of theirchild, childcare observation days, and housework. Under the Group’s medium-term
management plan, we are aiming for a 100% parental leave uptake rate for male
employees with four weeks taken for said leave.
・We have established an external contact desk where employees can discuss various
concerns or questions regarding nursing care and health 24 hours a day, 365 days of theyear by telephone or online.
Going forward, we will continue to work as a Group to create an environment where
employees can continue to work and to expand support measures.
Information on efforts to promote the career development for women and other
CSR-related reports are widely available on the Company’s website at:https://www.ms-ad-hd.com/ja/csr/quality/diversity.html
2.Human Assets Development
Human assets are extremely important management capital for the sustainable growth of
the Group. We are endeavoring to develop human assets that are compatible with ourmanagement strategy and are capable of responding flexibly to changes in the businessenvironment.
Please see page 33 in “Integrated Report 2021”.
https://www.ms-ad-hd.com/en/ir/library/disclosure.html

IV. Matters Related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development(1) Basic Views on Internal Control System
The Company has established its MS&AD Insurance Group Basic Policy Pertaining to System for Internal Controls, andhas established the systems required under Japan's Company Law. In addition, we have made the “systems for assuring
the reliability of financial reporting” to be an important perspective in the context of enhancing related systems.
Please see “MS&AD Insurance Group Basic Policy Pertaining to System for Internal Controls”, adoptedbythe Boardof Directors is on the Company’s website.
https://www.ms-ad-hd.com/en/group/value/group/system/main/01/teaserItems1/0/linkList/0/link/basicpolicy.pdf(2) Establishment of an Internal Control System
The Company maintains a system in accordance with this Basic Policy, and reports to the Board of Directors regarding
the results of an inspection conducted every year about the system building and the appropriate operation.

2. Basic Views on Eliminating Anti-Social Forces(1) Basic Approach to Elimination of Antisocial Forces
The Company is working to put in place a system for the elimination of antisocial forces, to which it takes a resolute
posture, ensuring that all employees aware that the Company refuses to respond to unreasonable, inappropriate demands.
(2) Status of Efforts to Eliminate Antisocial Forces
a. The Company’s “MS&AD Insurance Group Basic Policy Concerning Antisocial Forces” sets forth a common basic
posture shared by all employees and officers and policies for responding to antisocial forces, and is published both
inside and outside the Company.
b. The Company has established an organization responsible for dealing with inappropriate demands from antisocial
forces and a manual for dealing with such forces, both of which are published within the Company.
c. The Company regularly works closely with outside specialist organizations including the police, Centers for Removalof Criminal Organizations and attorneys, etc., building a system for proactive gathering of information and consulting.

34

d. The Company regularly conducts internal training regarding antisocial forces.

V. Other
1. Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

Not Adopted

Supplementary Explanation―――35

2. Other Matters Concerning to Corporate Governance System[Outline of Timely Disclosure Structure](1) Basic Approach
The Company has formulated internal Rules. The objective of these Rules is to establish internal controls aimed at
producing documents in a timely and appropriate manner for disclosure, to evaluate the effectiveness of disclosure
control, and to establish disclosure controls and procedures for verifying the appropriateness of the contents of disclosure
documents, based on the recognition that prompt, accurate and fair disclosure of corporate information is indispensablefor MS&AD Group in ensuring compliance and fulfilling its corporate social responsibility in relation to disclosure.
(2) Internal Controls
a. ERM Committee
An ERM Committee has been established by resolution of the Board of Directors. The ERM Committee comprises
officers and general managers in charge of corporate planning, accounting, and other departments related to
information disclosure, and conducts deliberations regarding information disclosure and reviews the appropriateness of
information to be disclosed.
b. Controls and Procedures Regarding Information Disclosure
Based on the internal Rules noted in (1) above, the departments listed below fulfill their respective roles, and regularly
review the effectiveness of their internal controls and the appropriateness of their procedures.
(a) The Company’s individual departments and subsidiaries determine whether information disclosed in matterssubmitted to the Board of Directors and Group management meetings falls under matters for timely disclosure as
stipulated by the stock exchanges.
(b) In the event the information is deemed to fall under matters for timely disclosure as noted in (a), above, theCompany’s individual departments and subsidiaries then report that information to the general managers of the
Human Resources and General Administration Department.
(c) Upon receipt of the report noted in (b), above, the general managers of the Human Resources and General
Administration Department will make the final determination of whether timely disclosure is required, and in theevent the information falls under matters for timely disclosure, the information will be disclosed following theprescribed procedure.
(d) The ERM Committee receives reports regarding the content of timely disclosures, and reviews the appropriatenessof those disclosures. Note that, when required, the ERM Committee may deliberate those matters in advance.
c. Audits of Controls Regarding Information Disclosure
The Audit Department periodically conducts internal audits targeting information disclosure controls and procedures,and reports the results of those audits to the Board of Directors.
<Attachments>[Management Structure Diagram (the Company’s management structure)][Overview of Timely Disclosure Structure][MS&AD Insurance Group Basic Policies on Corporate Governance][Skills Matrix of Director, Audit & Supervisory Board Member and Executive Officer]- End -

36

37

【Overview of Timely Disclosure Structure 】【Information Disclosure】

ERM Committee

General Manager, Human Resource &Internal Audit

General Administration Department

Department

Head Office,Departments, etc.

Subsidiaries

38

MS&AD Insurance Group Basic Policies on Corporate Governance
MS&AD Insurance Group Holdings, Inc. (hereinafter referred to as “MS&AD” or “the Company”) has established the
MS&AD Insurance Group Basic Policies on Corporate Governance for the purpose of indicating the basic approachto and framework for corporate governance.
Chapter 1: The Company’s Basic Approach to Corporate Governance1.
In line with its Corporate Philosophy (Mission), MS&AD, as a holding company overseeing all group businesses,
has established a management framework that ensures transparent, fair, swift and decisive decision-making
that takes into account the standpoint of all stakeholders. The Company’s objectives are to sustain stability andconsistent growth over the long term by using corporate resources efficiently and managing risks properly andultimately, to further increase corporate value.
2.

To this end, the “MS&AD Insurance Group Corporate Philosophy (Mission), Corporate Vision and Code of
Conduct (Values)” were formulated as something all officers and employees of the Group should adhere to in all
situations. In addition to working to disseminate these principles among all officers and employees of theCompany and its Group companies, the Company positions corporate governance, compliance and risk
management as important management issues in the Medium-term Management Plan and actively promotesthat Plan.

Chapter 2: Relationship with Stakeholders
1.
In order to realize our Corporate Philosophy (Mission), the Company aims toward the sustainability of society
and sustainable enhancement of corporate value by fulfilling our responsibilities to seven types of stakeholders(customers, shareholders, agents, business partners, employees, local communities/global society and theenvironment) based on the “Perspective of Sustainability of the MS&AD Insurance Group.”
2.
Perspective of Sustainability of the MS&AD Insurance GroupIn order to realize our Corporate Philosophy (Mission), the MS&AD Insurance Group will create shared value andaim toward a resilient and sustainable society through corporate activities that implement “Story of Value Creation.”
We will consistently strive for supreme quality that lives up to the trust and expectations upon us. Together with our
stakeholders, we continue to contribute to the creation of society where anyone can pursue a stable life and boldly
engage in dynamic business activities, while preserving the sustainability of the global environment and society.
3.
Efforts to engage stakeholders
We will fulfill our responsibilities to stakeholders and create shared value by working with them through thefollowing efforts.
Stakeholder
Efforts
Customers
Provide products and services of high quality that meet customer trust andexpectations.
Shareholders
Provide appropriate disclosure of information and appropriate return toshareholders. Strive to raise corporate value (See Chapter 2: Relationship with
Shareholders).
AgentsGrow together as partners.
Business partners
Maintain sound relationships and cooperate to fulfill corporate social
responsibilities.
Employees
Provide a comfortable working environment, and opportunities to haverewarding experiences and opportunities to grow.
Local communities
As a member of society, take steps to create a resilient and sustainable society.
/Global Society
The environment
Secure sustainability of the Planet.
4.
Schemes for Receiving Feedback from Customers
The MS&AD Insurance Group has formulated a “Basic Policy for Responding to Customers’ Voices” in order to receive
all customer feedback (in the form of inquiries, consultations, requests, complaints, disputes, compliments andgratitude, etc.). This feedback is used to make quality improvements.
5.
Speak Up
The MS&AD Insurance Group has established an environment where all employees, etc. can speak up their concerns
and worries in a frank and positive way. One such initiative is a whistleblowing system enabling all employees, etc.
of the Company and its subsidiaries to directly report illegal or improper behavior to internal and external contact
points. All these efforts aim to receive a wide range of employee, etc. feedback and enable early detection andresolution of problems.
6.
Promotion of Diversity and Inclusion
In order to conduct Group management with awareness of changes in the global environment, the MS&AD InsuranceGroup establishes a working environment that enables employees to demonstrate their full potential regardless ofgender, nationality or disability, and aims to establish a corporate culture that respects diversity and diverse values.

39Chapter 3: The Company’s Corporate Governance Stance1.
The Company’s Organizational Structure
As a Company with an Audit & Supervisory Board, the Company will ensure that independently appointed
Audit & Supervisory Board Members appropriately act in their auditing functions as well as that the Board of
Directors appropriately act in its oversight functions, and will endeavor to improve governance throughstrengthening of each functions and actively disclosing information.

The Company has formed the Governance Committee (made up of all Outside Directors, the Chairperson of theBoard, the Vice Chairman of the Board and the President) in addition to the Nomination Committee andRemuneration Committee (a majority of the members and a chairperson each have been appointed from among
the Outside Directors) as internal committees of the Board of Directors, thus building a highly effective andtransparent corporate governance system.

The Company has introduced an Executive Officer System and is proceeding to delegate authority over businessexecution to these Executive Officers to ensure rapid execution.
2.
(1)

(2)
(3)
(4)

Role of the Board of Directors
In addition to matters specified by laws and regulation and the Company’s articles of Incorporation, the Boardof Directors discusses and decides upon important matters involving Group management strategy and corporate
management, including the Group’s management policies, management strategies and capital policy, in addition
to overseeing the duties of Directors and Executive Officers.
The Board of Directors allocates management resources according to risk appetite controlled with a balance ofrisk, return and capital, and aims to increase corporate value in the medium-to-long term by achieving
sustainable growth and improvement in profitability and capital efficiency with a foundation of soundness.
In addition to appointing Executive Officers, the Board of Directors aims to separate management decision
making and oversight by the Board of Directors from business execution by Executive Officers by clarifying theirrespective roles.
Executive Officers are responsible for executing business in the respective areas of business entrusted to themby the Board of Directors and report on the status of business execution to the Board of Directors.

3.
(1)

Composition of the Board of Directors and Roles of Outside Directors
The Board of Directors defined in the Company’s articles of Incorporation has having up to fifteen (15) members,
with a balanced composition that includes diverse knowledge and expertise. Candidates for Directors arenominated by the Board of Directors based on the “Criteria for the Selection of Director Candidates and Audit& Supervisory Board Member Candidates” (see 10. Nomination Process below).
Furthermore, at least one third of the Directors are nominated as Outside Directors to incorporate perspectives
independent from management, strengthen monitoring and oversight functions, and conduct highly transparent
management.
(2) Outside Directors are expected to perform the following roles.
Provisioning of advice from a broad perspective on management policies and management improvement basedon their knowledge and experience, with the aim of promoting sustainable corporate growth and increasing
corporate value over the medium- to long-term.
Supervising of management through important decision-making at the board level.
Monitoring of conflicts of interest between the Company and related parties such as management (Note) and/or
major shareholders.

Realizing supervising function from a standpoint independent of management by fulfilling accountability forstakeholders, including shareholders.
(Note) Collectively refers to the Directors, Audit & Supervisory Board Members and Executive Officers of theCompany and domestic insurance companies in the Group in which the Company has a direct investment (sameapplies hereinafter)
4.
(1)
(2)




Operation of the Board of Directors
Resolutions of the Board of Directors
Except in cases otherwise stipulated by law, resolutions of the Board of Directors are made by a majority of thedirectors attending the meeting, where a majority of Directors are in attendance.
Operation of the Board of Directors
To allow for required, adequate discussion of important decisions regarding business execution and oversight ofthe performance of duties, the Board of Directors defines the agenda, length of deliberation and frequency of
meetings of the Board of Directors.
To enable meaningful views, comments and questions to be presented in its meetings, the Board of Directors
makes efforts to send out and explain proposals to the Board of Directors, giving adequate consideration to thetime required for preparation by attendees.
The Board of Directors determines its annual schedule and anticipated agenda items in advance.

5.
Evaluation of the Board of Directors
The Board of Directors periodically analyzes and evaluates its own overall effectiveness, and publishes an overview
of the results.
6.
(1)

(2)

Audit & Supervisory Board Members and Audit & Supervisory Board
Responsibilities of Audit & Supervisory Board Members
As an independent entity entrusted with authority by the shareholders, the Audit & Supervisory Board
Members are responsible for ensuring the sound and sustainable growth of the Company, and for establishinga good corporate governance stance in response to the public trust by supervising the performance of duties of
the Directors.
Authority and Roles of Audit & Supervisory Board Members
Each Audit & Supervisory Board Member shall appropriately exercise his/her legal investigating authority,

40

(3)





including the authority to audit operations and assets, and supervises the performance of duties of the Directors
by attending meetings of the Board of Directors and other important meetings, viewing important approval
documents, investigating departments within the Company, and investigating subsidiaries in accordance withthe auditing policies and plans stipulated by the Audit & Supervisory Board.
Composition and Roles of the Audit & Supervisory Board
The Audit & Supervisory Board is defined in the Articles of Incorporation and has having up to 6 members, amajority of which shall be Outside Audit & Supervisory Board Members in accordance with the law. Candidates
for Audit & Supervisory Board Member are nominated by the Board of Directors with the approval of the Audit& Supervisory Board, based on the “Criteria for the Selection of Director Candidates and Audit & Supervisory
Board Member Candidates” (see 10. Nomination Process below).
The Audit & Supervisory Board receives reports from Audit & Supervisory Board Members on the status of
performance of duties, and reports from officers and employees on important matters related to auditing, andalso makes decisions regarding auditing policies and auditing plans.
The Audit & Supervisory Board makes decisions regarding proposals to be submitted to the General
Shareholders Meeting on the appointment or dismissal of Accounting Auditors, and the non-reappointment of
Accounting Auditors. It also has the right to consent to decisions regarding remuneration of the Accounting
Auditors.

7.
Accounting Auditors
The Board of Directors and the Audit & Supervisory Board endeavor to take appropriate action to ensure adequate
auditing by the Accounting Auditors.
8.
Support Systems for Directors and Audit & Supervisory Board Members / Training Policy
The Company has the following systems in place as required for Directors and Audit & Supervisory Board Members
to effectively fulfill their roles and responsibilities.
(1) The Company has assigned a person in the secretariat of the Board of Directors to each of the Outside Directors
and Outside Audit & Supervisory Board Members (hereinafter referred to as “Outside Officers”) to provide
support in areas such as providing briefings in advance.
(2) The Company has established a system for ongoing provision of information and training at the time of
appointment and during the term of Directors and Audit & Supervisory Board Members.
(3) The Company provides appropriate opportunities for Outside Officers to share information and exchange
opinions with management and senior employees.
(4) The Company bears the expenses required to enable Outside Officers to fulfill their roles.
9.
Group Management Committee
The role of the Group Management Committee is to discuss management policies, management strategies and key
issues for the management of the Company and its Group companies. It also monitors specific business operations
by receiving reports on matters decided upon by Executive Officers.
10. Nomination Process

The Board of Directors appoints candidates for Directors and Audit & Supervisory Board Members, andExecutive Officers based on advice from the Nomination Committee. The Audit & Supervisory Board’s consent
needs to be obtained for candidates for Audit & Supervisory Board Members.

The Nomination Committee deliberates on important management personnel matters and provides advice onthese matters to the Board of Directors. Such matters include the selection of candidates for Director and Audit& Supervisory Board Member, and Executive Officer of the Company as well as the selection of Directors andAudit & Supervisory Board Members for domestic insurance companies in which the Company has direct
investments.

The Nomination Committee is made up of 3 or more members.

A majority of members and the chairperson shall be appointed from among the Outside Directors by the Boardof Directors.
11.
(1)




(2)


Process of Determining Remuneration
Remuneration of Directors
The amount of remuneration for each Director is determined by the Board of Directors within the amountspecified by resolution of the General Shareholders Meeting, after deliberation by the Remuneration Committee.
The Remuneration Committee provides advice to the Board of Directors on matters such as performance
evaluations and remuneration for the Company’s Directors and Executive Officers.
The Remuneration Committee is made up of 3 or more members.
A majority of members and the chairperson have been appointed from among the Outside Directors by the Boardof Directors.
Remuneration of Audit & Supervisory Board Members
The amount of remuneration of each Audit & Supervisory Board Member is determined by discussion by Audit& Supervisory Board, within the amount specified by resolution of the General Shareholders Meeting.

12. Governance Committee
The Governance Committee whose chairperson is elected by mutual vote of the Outside Directors has been
established for the purpose of discussion by all Outside Directors, the Chairman, the Vice Chairman and thePresident regarding matters related to the status of, policies regarding and stance on corporate governance.
13. Task-Specific Committees
The Company has established the Sustainability Committee, Quality Improvement and Compliance Committee,
Digitalization Committee, Group Systems Committee, Group International Business Committee, ERM Committee
and Group Standardization Committee with the aim of deliberating important management issues involving business41

execution, to coordinate perspectives across various departments.
Chapter 4: Group Management Structure
1.
Roles of the Company (Holding Company)

The Company has executed into business management agreements with the domestic Group insurancecompanies in which it has invested directly (hereinafter referred to as the “Directly Invested Companies”), andsupervises management of Group companies in order to realize management strategies, improve management
efficiency and ensure financial soundness and appropriate operations within the Group.

The Company has established “Basic Policy Pertaining to System for the Group’s Internal Controls,” “TheGroup’s Risk Management Basic Policy,” “The Group’s Compliance Basic Policy,” “The Group’s Internal Audit
Basic Policy,” “The Group’s Risk Appetite Statement,” and “The Group’s Basic Policy on Information Technology
Governance.” In addition to requiring compliance with these policies by Group companies, either the approvalof or reporting to the Company is required for important matters involving the Directly Invested Companies inline with the business management agreements.

The Company establishes a group management strategy such as the Group’s Medium-term Management Plan.
The Company provides guidance and supervision through monitoring of the progress of management plans
formulated by Group companies and the status of business execution, with the aim of achieving the goals of theGroup.
2.


Role of Directly Invested Companies
The Directly Invested Companies formulate their own policies and appropriately establish internal management
systems based on the Group’s Basic Policies, in addition to formulating management plans in each company
based on the Group’s Medium-term Management Plan to conduct management as individual companies.
The Directly Invested Companies also appropriately supervise the management of their subsidiaries underbusiness management agreements.

Chapter 5: Relationship with Shareholders
1.
Constructive Dialogue with Shareholders
The Company has disclosed the Policy on Constructive Dialogue with Shareholders and has established the systemfor promoting constructive dialogue with shareholders from the perspective of enabling deeper dialogue in themedium- to long-term and enhancing corporate value.
2.
Ensuring Shareholder Rights and Equality
The Company acts appropriately to effectively ensure the rights of shareholders, and endeavors to enable
shareholders to appropriately exercise those rights as follows.
The Company will take appropriate action to enable shareholders to effectively exercise their voting rights in
the General Shareholders Meeting.
The Company will provide accurate information to contribute to appropriate decision-making in the exercise of
voting rights of shareholders.
The Company provides adequate explanation of capital policies, etc., that have a material impact on theinterests of shareholders.
In the event a proposal by the Company is approved in the General Shareholders Meeting but with aconsiderable number of votes in opposition, the Company analyzes the reason and volume of opposing votes, andresponds appropriately.

3.
Prevention of Transactions that Conflict with the Interests of Shareholders
When the Company does business with a related party such as a Director or a major shareholder, prior approval of
the Board of Directors is required for important or non-standard transactions to ensure they do not harm the joint
interests of the Company and the Company’s shareholders.
4.
Strategic Equity Holdings
The Company has disclosed the “Basic Policy on Reduction of Strategic Equity Holdings” and the Criteria for
Ensuring Appropriate Handling of the Exercise of Voting Rights Pertaining to Strategic Equity Holdings from theperspective of contributing to the increase in the Company’s corporate value and that of companies in which sharesare held by the Company in the medium-to long-term.

42Chapter 6: Appropriate Disclosure
The Company and the Group’s domestic insurance companies conduct disclosure based on the “Basic Policy for
Disclosure of Information,” to ensure that they act in accordance with law and disclosure rules stipulated byfinancial instrument exchange, and that their stakeholders are able to fairly, correctly and promptly understandimportant information.

In addition to disclosure required by law, the Company also discloses non-financial information of significant
interest to shareholders, including ESG (Environment, Society, Governance) along with financial information,in an easily viewable “Integrated Report” format, intended to contribute to a constructive dialogue withstakeholders, including shareholders.

In addition, this information is also disclosed in easily-accessible format on the Company’s website, and otherefforts, including the use of video, will be made to provide stakeholders with a better understanding on thewebsite.
Supplementary Provision
Revision and abolition of this basic policies shall be determined by resolution of the Board of Directors except for any
revision made pursuant to the proviso to Paragraph 1 of Article 4 and Paragraph 3 of Article 4 of the Regulations for Management of
Policies and Regulations etc.
END
Established, June 22, 2015
Amended, June 26 2017
Amended, April 1, 2018
Amended, November 19, 2018
Amended, March 1, 2019
Amended, April 1, 2020
Amended, April 1, 2021
Amended, April 1, 2022
Last Amended, June 1, 2022

43

MS&AD Insurance Group Basic Policies on Corporate Governance - Appendix
Criteria for the Selection of Director Candidates and Audit & Supervisory Board Member Candidates
1. Outside director candidates and outside Audit & Supervisory Board Member candidates
Candidates must meet the following requirements.
・ Must not be disqualified from serving as a director or Audit & Supervisory Board Member pursuant to the Companies Act.
・ Must not be disqualified from serving as a director or Audit & Supervisory Board Member of an insurance holding company
pursuant to the Insurance Business Act.
・ Must have a sufficient level of public credibility.
・ An outside Audit & Supervisory Board Member must satisfy the eligibility requirements for a Audit & Supervisory Board
Member pursuant to the Insurance Business Act.
Additionally, candidates must satisfy the following three requirements(1) Eligibility
A candidate must have the qualities listed below that are necessary to monitor the overall management of the company and provide
advice, based on a general knowledge of company management and a basic understanding of the roles of the directors and board of
directors.
・ Ability to discern facts from materials and reports
・ Capability to detect problems and risks and apply own knowledge to solve them・ Capacity to appropriately monitor business strategy and provide advice
・ Mental independence to openly question, debate, re-examine, continuously deliberate, and propose ideas in opposition to a
resolution(2) ExpertiseMust have knowledge in a specialized field such as management, accounting, finance, law, administration, or social/cultural affairs,
and have a record of achievement in that field.
(3) Independence
The following persons are ineligible.
① An executing person of the Company or a subsidiary of the Company.
② A director or Audit & Supervisory Board Member of a subsidiary of the Company.
③ A person for whom the Company is a major business partner (i.e. a person who received payments from the Company or
subsidiaries of the Company that represent 2% or more of annual consolidated sales for the most recent fiscal year), or an
executing person thereof (in the case of a consulting firm, auditing firm or law firm, a consultant, accounting professional, or
legal professional who belongs to said corporation, partnership, etc.).
④ A major business partner of the Company (i.e. a person who made payments to subsidiaries of the Company representing 2% ormore of the Company consolidated direct premiums written excluding deposit premium from policy holders for the most recent
fiscal year), or an executing person thereof.
⑤ Any of the Company’s top 10 largest shareholders (or, if the shareholder is a corporation, an executing person thereof).
⑥ An executing person of a company to which the Company or a subsidiary of the Company has appointed a director.
⑦ A consultant, accounting professional, or legal professional who has received, other than officer compensation, average cash orother financial benefits of at least 10 million yen per year for the past three years from the Company or subsidiaries of theCompany.
⑧ A person falling under any of the items ② through ⑦ during the past five years.
(Note) “During the past five years” means five years from the time the content of a proposal to the General Shareholders Meeting to elect theoutside director or outside Audit & Supervisory Board Member was resolved by the Board of Directors.

⑨ An individual who was an executing person of the Company or subsidiaries of the Company in the past (in the case of an outside
Audit & Supervisory Board Member, including an individual who has been a director of the Company or a subsidiary of theCompany.)⑩ A spouse or second-degree or closer relative of a person listed in items ① through ⑨ above (an executing person means an
executive director, executive officer or an employee in a position of general manager or higher.)(4) Term limits
The total terms of office for newly elected outside directors and outside Audit & Supervisory Board Members from April 1, 2015
onwards are as listed below.
① For outside directors, the expectation is 4 terms, 4 years, renewable for a maximum of 8 terms, 8 years.
② For outside Audit & Supervisory Board Members, in principle the total term is 1 term, 4 years, but this is renewable for a
maximum of 2 terms, 8 years.
2. Candidates for director other than outside director and candidates for Audit & Supervisory Board Member other thanoutside Audit & Supervisory Board Member
Candidates must meet the following requirements.
・ Must not be disqualified from serving as a director or Audit & Supervisory Board Member pursuant to the Companies Act.
・ Must not be disqualified from serving as a director or Audit & Supervisory Board Member of an insurance holding company
pursuant to the Insurance Business Act.
・ Must satisfy the eligibility requirements for a director or Audit & Supervisory Board Member who engages in daily business at
an insurance company pursuant to the Insurance Business Act.
Additionally, a candidate must have varied experience as well as highly specialized experience and must embody our corporate
philosophy in the exercise of leadership.
END

44

Skills matrix of Directors, Audit & Supervisory Board Members and Executive Officer■Skills matrix of Directors and Audit & Supervisory Board Members
Skill

Corporate
managementOfficers
Yasuyoshi

Personnel
International

IT / digital

Sustainabili affairs / HRty

Legal anddevelopmen compliancet

RiskmanagementFinance /Insuranceaccounting

business○○

Director
○

○

○

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○

○

○

○

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○

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Karasawa
YasuzoDirector○

Kanasugi
Noriyuki

Director○○

Hara
TetsujiDirector
○

○

○

○

HiguchiMasahito

Director○

FukudaYusukeDirector
○

○

○

○

ShiraiMarikoOutsideBando

Director

Akira

OutsideArima

Director

Junichi

OutsideTobimatsu

Director

Rochelle

Outside

Kopp

Director

Akemi

OutsideIshiwata

Director

HidemaAudit &

Jinno

Supervisory

○

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○

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○

○

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○

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○

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○

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Board
MemberAtsukoAudit &

Suto

Supervisory
Board
Member

Kunio

OutsideChiyodaAudit &○○

45

Supervisory
Board
Member
Kyoko

OutsideUemuraAudit &
Supervisory

○

Board
Member□Skills matrix of Executive Officer：We have installed an executive officer system. The skills for Executive Officers who are not
Directors are as follows.
Skill

Personnel
Corporate
management

Officers

Internatio

IT /Sustainab

naldigitalilityaffairs /Legal and

Risk

Finance /HRcompliancmanagem

accountin

developm

e

ent

g

Insurancebusinessent

SatoruExecutive

TamuraOfficer

Shinichiro

Executive

Funabiki

Officer

Naomi

Executive

Motojima

Officer

MasashiExecutive

Ippongi

Officer

KeisukeExecutive

Niiro

Officer

WakanaExecutive

Hitotsuyan

Officer

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agi
Tamaki

Executive

KawateOfficer

TomoyukiExecutive

Shimazu

Officer

ToshiyaExecutive

KawabeOfficer

TakumaExecutive

Hayakawa

Officer

TakuyaExecutive

Tsuda

Officer

Hiroyoshi

Executive

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46

○

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OwadaOfficer

HiroshiExecutive

Arakawa

Officer

Keiji

Executive

Suzuki

Officer

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○

○

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47

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