2Strategy and Business Platform Supporting Our Purpose Story | Capital Policy and the Mid-Term Business Plan | CFO Message

We aim to maintain theworld s top-class EPS
growth and lift the levelof ROE equivalent toglobal peers through theimplementation of adisciplined capital policy.

Kenji Okada
Senior Managing Director
Chief Financial Oﬃcer (CFO)▶Track Record of Disciplined Capital Management
Average of the Past 5 Years (2018‒2022)

Average of the Past 10 Years (2013‒2022)(billions of JPY)

(billions of JPY)

Business investment
89.5*1
Capital-level adjustment
85.0

400.0

Business investment
143.4*1

369.2

Capital-level adjustment 67.5

Ordinary dividend
154.8
Adjusted net income

Increase inadjusted ROE

Ordinary dividend
120.6

Capital utilization

Adjusted net income

10.5%

Capital utilization

9.9%*1：Combined only with the amounts disclosed (acquired from Refinitiv Eikon)

Organic Growth
Our capital strategy is built upon a three-pronged
approach. First, we will strategically review our portfolio
based on organic growth and expedite the divestment ofbusiness-related equities to generate capital and funds.
Second, we will channel the capital and funds into strong
business investments. Third, if there are no favorable
investment prospects, we will prioritize returning capital toshareholders, aiming to bolster ROE and maintain a balanced
capital management cycle. In the following sections, I will
provide a comprehensive explanation of each of thesecomponents.

▶Capital Management Cycle

Capital adjustment

Capital generation

Organic
GrowthBusiness
Investment

Sustained stable domestic earnings
Strengthen specialty companies
in developed countries
Capture growth potential
in emerging countries＋

Disciplined andstrategic M&A
Disciplinedrisk-taking

For instance, I collaborate with the senior leadership ofeach business to address shifts in the business landscape,evaluate strategic advancements, and determine if any
adjustments are warranted. Additionally, I play an active rolein shaping the forthcoming Mid-Term Business Plancommencing next ﬁscal year.
In ﬁscal 2022, both domestic and overseas Group entities
eﬀectively executed their management strategies, achieving
growth beyond market norms in appealing sectors.
Consequently, on a normalized basis, adjusted net income
surged to 617.1 billion yen, a year-on-year gain of 22%, andadjusted ROE rose to 15.1%, up 2.4 percentage points year
on year.

Adjusted Net Income*2

Adjusted ROE(billions of JPY)

Shareholder
ReturnDividend increase
Flexible capitallevel adjustment

505.4*6
Domestic
Non-Life*3

164.7

Domestic Life*4

51.1

International

232.2

Other*5

57.4

−20.1

144.6

444.0

44.9

109.4

+123.0

355.2

218.6

4.7%
72.4

79.6

2022Normalized

2022Actual(Reference)*3: Domestic non-life insurance = TMNF
*4: Domestic life insurance = TMNL

ESG for Sustainable Growth

2

36.4

*2: The breakdown of adjusted net income is the profit of each business unit.

Strategic capital release
Appropriate risk control(Reference)2022(Actual)

11.1%
15.1%

617.1*7

2021Normalized

Portfolio Review

044

Our approach does not align with the typical “shrink togrow” strategy. Instead, our key focus for boosting ROE
revolves around molecular expansion, or “organic growth,”
speciﬁcally aiming for the worldʼs top-class EPS growth.
The characteristics of our portfolio are (1) a domestic
market foundation that generates stable earnings,(2) growth of specialty companies in developed countries
encompassing less correlated business lines, and (3) highgrowth in emerging countries such as Brazil and Asia.
In my role as Group CFO, I contribute to the growth ofeach business by actively engaging in the management
strategies developed by each business, which areformulated based on capital allocation and other measures.

Strategy and Business Platform Supporting Our Purpose Story

Tokio Marine Group aims to lift the level of ROE by realizing
strong profit growth in both insurance underwriting and asset
management, while maintaining a disciplined capital policy.
Despite increasing adjusted return on equity (ROE) to 15.1%
in fiscal 2022, we acknowledge that this result has been
influenced by factors such as the reduction in net assets due
to rising interest rates, which is applicable to the entire
industry. As such, we are not content with this figure alone
and are determined to enhance ROE at its core, elevating it
to a level that aligns with our global peers. In my capacity asGroup CFO, I am devoted to leading these efforts, particularly
focusing on capital policy considerations.

*5: Other domestic non-life insurance, financial, and other businesses, and gains relating
to sales of business-related equities, etc., that are not included in business unit profits

2011(Normalized)

2022(Normalized)*6: The following one-time effects totaling +72.9 billion yen were excluded from the fiscal
2021 actual result of 578.3 billion yen: 1) Natural disasters: Approximately +17.0 billion
yen, 2) North American capital gains, etc.: Approximately +24.0 billion yen, 3) COVID-19:
Approximately +23.0 billion yen, and 4) Gains on the sale of business-related equities:
Approximately +9.0 billion yen (on the portion of sales exceeding 100.0 billion yen)
*7: The following one-time effects totaling 173.1 billion yen were excluded from the fiscal 2022
actual result of 444.0 billion yen: 1) Natural disasters: Approximately 26.0 billion yen, 2)
North American capital gains, etc.: Approximately 10.5 billion yen, 3) COVID-19:
Approximately 134.0 billion yen, 4) Conflict: Approximately 14.0 billion yen, 5) South African
floods: Approximately 4.0 billion yen, and 6) Gains on the sale of business-related equities:
Approximately +15.0 billion yen (on the portion of sales exceeding 100.0 billion yen)045

2 Strategy and Business Platform Supporting Our Purpose Story | Capital Policy and the Mid-Term Business Plan | CFO Message
Portfolio Review/Business Investment
Under this guiding principle, we have pursued disciplined andstrategic approaches to various entry (M&A, etc.) and exit
(divestment, etc.) opportunities, considering risk diversiﬁcationand future growth prospects. For instance, we have undertaken
initiatives such as the acquisition of Pure Group, establishmentof a local entity in Canada, and bolt-on M&A through Delphi
Financial Group (Standard Security Life Insurance Company) andTokio Marine HCC (Gulf Guaranty Employee Beneﬁt Services,Inc.). Simultaneously, we have divested from reinsurance
subsidiaries and Tokio Marine Kilnʼs subsidiary Highland, allaimed at achieving optimal capital allocation.
Following a review of our capital structure, we issued hybrid
bonds when we acquired Pure in consideration of capital costs.
In the future, we will also explore the use of hybrid bonds asnecessary as one of the means for achieving the optimal capital
structure while preventing equity dilution.
From a capital restructuring perspective, we have been
consistently reducing business-related equities for over 20 years.
Recently, we announced our intention to sell more than 600
billion yen worth of business-related equities over the next four
years, to 2026. We intend to prudently utilize the capital
generated from this accelerated divestment.
By following this approach, we have consistently enhanced
our corporate value by eﬀectively refreshing our risk portfolio.
Looking ahead, we will maintain proper risk control while
accelerating growth through well-considered capital allocation.

Proﬁt Composition*1

Japan 44%

International 42%(of which, life
insurance 6%)

FY2023670.0
billion yen

FY2013216.0
billion yen
Japan 58%
(of which, life
insurance 3%*2)

International 56%*1 The breakdown of profit is based on the profit of each business segment (yearlyplan), except “Other businesses” are included in “Japan.”*2 Profit on a financial accounting basis for TMNL

2

Accelerated reduction of business-related equities

Sale proceeds(billions of JPY)

150

▶Achieving Growth through a Flexible Capital Strategy
Use ofequity capitalUse of hybrid capital

Improve
ROE

Sale of over 600.0 billion yen
worth over four years

Investment for further growth
February 2020 acquisition(using hybrid bond)Hybrid capital(liability with a capital nature)

October 2015
acquisition

Capital equity(shareholdersʼ equity)

Strategy and Business Platform Supporting Our Purpose Story

As an insurance company, we increase returns by taking risks ininsurance underwriting and asset management as a key to ourbusiness. We have positioned Enterprise Risk Management(ERM) as the cornerstone of Group management. ERM takes into
consideration our risk appetite, to what extent we undertake risks(risk strategy), whether return on risk is suﬃcient, and whether
risks are appropriately diversiﬁed (see pp. 50‒53). We have alsoestablished the ERM Committee to discuss ERM strategy. As theCommitteeʼs chair, I assess the growth potential and proﬁtabilityof all businesses and the risks associated with each strategy in a
forward-looking manner and formulate a capital allocation plan to
optimize the business portfolio from a Group-wide perspective.
From the standpoint of business investment, we often receive
inquiries during our dialogues with the capital market about “thenext step in M&A.” However, for us, M&A is a “means” for risk
diversiﬁcation and proﬁt growth, rather than being an ultimate“goal.” Therefore, we deliberately refrain from setting an “M&Abudget” or a “proﬁt plan dependent on M&A.” In the case oflarge-scale M&A opportunities, we generally perceive current
valuations to be inﬂated. Consequently, we believe thatexercising patience is crucial as we engage in Market
Intelligence activities, constantly monitoring long and short listsof potential acquisition targets, and carefully selecting “promising
companies” that oﬀer a suﬃcient return on investment (ROI).
Concurrently, we proactively seize opportunities for smaller-scalebolt-on M&A, capitalizing on the experience and insights within
the Group to execute these initiatives consistently.

Risk diversiﬁcation through the expansion of our international business

Execute disciplined
strategic M&A

May 2012
acquisition
December 2008
acquisition

・ Initiatives for growth・ Diversiﬁcation ofregions andbusinesses
・ Improvement of
capital eﬃciency

100
2020

2021

2022

2023

2024

2025

2026

March 2008
acquisition

046

047

2 Strategy and Business Platform Supporting Our Purpose Story | Capital Policy and the Mid-Term Business Plan | CFO Message
ROE

Shareholder Return
increase in DPS compared with the previous year, marking
the 12th consecutive year of dividend growth.
We use share buybacks as a means of adjusting capitallevels and decisions will be made based on comprehensive
consideration of economic solvency ratio (ESR), market
conditions, opportunities for M&A, and additional risk-taking.
Given our ESR of 124% as of the end of March 2023, wellwithin the target range, our approach for ﬁscal 2023 is toimplement a ﬂexible share buyback plan of 100 billion yen
throughout the year, with an initial resolution of 50 billion yen
made in May.

Tokio Marine Group regards dividends as the basis ofshareholder returns and our basic policy is to sustainably
increase dividends per share (DPS) in line with proﬁt growth.
Speciﬁcally, we calculate ordinary dividends based on our
5-year average adjusted net income to temper volatility andapply a dividend payout ratio that aligns with global peer
standards. For ﬁscal 2023, against the backdrop of
consistent proﬁt growth, we have been steadily expanding thefoundation for dividends, our 5-year average adjusted net
income. As planned, by raising the dividend payout ratio tothe targeted global peer level of 50%, we forecast a 21%

As a result of these initiatives, our adjusted ROE has been
consistently above the 7% cost of capital. However, as
mentioned earlier, we recognize that this level is not yet
satisfactory. Our goal is to achieve the worldʼs top-classearnings per share (EPS) growth while executing disciplined
capital policies, aiming to elevate our ROE to a level on parwith our global peers.

▶Adjusted ROE Is Trending Above the Cost of Capital of 7%
16.0%

Impacts of COVID-19
and natural disasters

Impacts of greatly above-averagedamage from natural disasters

14.0%
12.0%
10.0%

▶Dividend Growth

6.0%(+18%)

100

480.0

400.0

375.0

578.3

2020

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

▶Steady Improvement in ROE

2021

444.0

670.0

2022 result

2023 forecast

2024

2025

*1：DPS = Five-year adjusted net income × Payout ratio / Number of shares*2：Figures in parentheses are prior to the three-for-one stock split in October 2022.

2

Capital eﬃciency

Low2024‒2025 forecasts

The removal of ﬁscal 2019‒2020, which
had relatively low proﬁt levels(around 300 billion yen), from the ﬁve-year
average period, results in the rounding
up of dividend resources and DPS risingmore than single-year proﬁt growth.

17
(50)

2011

2011

High
0%

Low

Tokio Marine(2015‒2018)

OE

er R

High

Peer 1
Tokio Marine(2019‒2022)
Peer 4

Tokio Marine(2011‒2014)

3%

ROE
Standard Deviation

Peer 3▶Status of the Economic Solvency Ratio (ESR)(trillions of JPY)

124％
4.3
3.4
Risk*3

Net asset
value

140%
100%

Implement:● Business investment, and/or● Shareholder return

TargetRange

Strategically consider:● Business investment, and/or● Shareholder return●

Additional risk-taking, and/or

6%
20%

10%

ROTE: Adjusted ROE for TMHD; Peers: average of 2019‒2022 ona financial accounting basis
Peers: Allianz, AXA, Chubb, Zurich
Source: Bloomberg

Average ROTE

▶Reference: Price-to-Book Value Ratio (PBR) Is Currently Above One
1.4●

Additional risk-taking, and/or

1.3
1.2

Aim to recover the capital level through the accumulationof profit● Control the risk level by reducing risk-taking activities

1.1

De-risking
Consider capital increase● Review of the shareholder return policy

0.9

●

●
●

March 31, 2023
*3: Amount of risk calculated by a model using 99.95% VaR (AA-rated basis)

048

0%

Concept of capital management based on the Economic Solvency Ratio (ESR)
ESR

Peer 2High

Strategy and Business Platform Supporting Our Purpose Story

280.9
286.7
336.1

(billions of JPY);
gray is single-year
proﬁt

0.0%

(363)

(255)

67
(200)

5-year averageadjusted net income

121

(300)

85

(JPY)

2.0%

Volatility

DPS(+21%)+15

Cost of capital 7％

4.0%

+21

●Fiscal 2023 forecast (+21% YoY)
●Project 12th consecutive yearof dividend growth*1,2

Adjusted ROE(actual ﬁgure)
11.1%

8.0%

1.0

0.8
0.7

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022
049

2 Strategy and Business Platform Supporting Our Purpose Story | Capital Policy and the Mid-Term Business Plan | CFO Message
Reference: Qualitative Risk Management

ERM*1 Framework
Finally, I would like to reiterate our commitment to Enterprise
Risk Management (ERM), which serves as a pillar ofmanagement. In concrete terms, we always maintain a keenawareness of the interplay between “risk,” “capital,” and“proﬁt” within the Group. By ensuring the adequacy of capitalin relation to risks and achieving high proﬁtability, we aim tosustainably enhance our corporate value.
*1: Enterprise Risk Management

Tokio Marine Group s ERM Structure and Initiatives to Strengthen it
The risks surrounding Tokio Marine Group are becoming morediversiﬁed and complex due to global business development
and changes in the business environment. In addition, intodayʼs uncertain and rapidly changing political, economic,
and social climate, we must constantly watch for the
emergence of new risks and take appropriate action. From
this point of view, we are not limited to conventional risk
management for the purpose of risk mitigation and avoidance,

but are comprehensively assessing risk in qualitative andquantitative ways.
In addition, we are continuing our eﬀorts to further
strengthen the ERM structure. For instance, we areenhancing risk assessments to include risks that are diﬃcult
to quantify, such as cyber risks, and improving natural
disaster risk management, including a review of ourreinsurance schemes.

▶ERM Cycle
Risk Appetite Framework

Quantitatively describes target levels
for capital soundness and profitability

Monitoring ofrisk exposure

Stress testing

Risk Strategy:

Outlines risk-taking policies for different
risk categories such as risk of major
wind and flood disasters (Japan), risk ofearthquake (Japan), and credit risk

Recognition andassessment ofmaterial risks*3

Measures* toaddress material risks
4*2: Emerging risks are new risks that arise due to changes in the environment or other factors, encompassing those that were not
traditionally recognized as risks and those that have increased markedly in severity. Specifically, these risks are identified
through internal discussions, considering results from subsidiary assessments and information from external sources.
*3: Material risks refer to risks that could have a substantial impact on financial soundness, business continuity, and othercritical aspects. Specifically, we focus on emerging risks as well as material risks from the previous business year within
the Group. We assess the impact (evaluating economic, business continuity, and reputational impacts) and consider thefrequency and likelihood to identify the most significant factors. We specify these risks using the following 5×5 matrix.

High
Degree of impact

Formulation of a capital allocation
plan based on business plans

Low

Emerging Risks
New risks that emerge due to changes in the environment or other factors, and that have not been previously
recognized as risks, or risks that have increased markedly in severity
Potential emerging risks
Emerging risks
for major Group companies

New emerging risks identified by the
CRO or risk management department

Emerging risks identified
in the previous fiscal year

Risk informationfrom external sources

1

2

Potential material risks
Material risks of the Groupin the previous year

High-impact risks
among the emerging risks

Emerging risks

2
Identification by matrix evaluation
Material risks

PDCA for material risks▶Examples of Emerging Risks
Examples of responses(1) Progressive deterioration of public infrastructure and corporate facilities◯Risk that insurance payouts will increase as growing deterioration of
public infrastructure and corporate facilities leads to frequent major accidents(2) Space risk
◯Risk that insurance payouts will increase due to widespread power grid failurescaused by geomagnetic storms and frequent communication disruptions
resulting from space weather and increased space debris(3) Innovations in medicine and biotechnology◯Risk that insurance payouts will increase due to innovations in cancer
diagnosis and genetic diagnosis technologies

Response to economic impact● Appropriately assess risks and develop products that meetcustomer needs, while generating stable profits throughrisk-appropriate underwriting, risk diversification, andarranging reinsurance● With respect to (4) shown at left, engage in research andanalysis on the impacts of climate change◯Risk that insurance payouts will increase due to intensifying environmental
degradation and disasters caused by global warming(5) Inadequate response to decarbonization (climate change transition risk)◯Risk of a decline in value of invested companies that lag behind in transitioning
to a decarbonized society, impacting the value of the Group s assets◯Risk that the Group s efforts towards decarbonization are perceived as
inadequate by society, damaging our reputation

Frequency and likelihood

Screening(4) Global warming (physical risks of climate change)

Material risk

High

*4: For material risks, we formulate response measures (Plan), implement these measures (Do), assess
the outcomes (Check), and make improvements (Act).
050▶Detection of Emerging Risks and the Process of Identifying Material Risks

Emerging risks/Scenarios
Capital and funding
sufficiency verification

Development of business plans
based on risk appetite

Qualitativerisk management
Identification of
emerging risks*2

Quantitative Risk Appetite Criteria:*5: Pre-emergence risk control measures include monitoring and risk management basedon the market environment and regulatory trends, while post-emergence risk response
measures include manuals (including business continuity plans) and mock drills.

Strategy and Business Platform Supporting Our Purpose Story

Quantitativerisk management

Qualitatively describes the policies regardingrisk-taking, including insurance underwriting
risk and asset management risk

are identiﬁed as “material risks.” For identiﬁed material risks, we
assess the suﬃciency of capital through the quantitative risk
management process described below, draw up control measures
before the risks emerge and countermeasures*5 to be taken if therisks do emerge, and conduct PDCA management.

Material Risks
Risks that have a signiﬁcant impact on ﬁnancial soundness, business continuity, etc.

Validation of business plans

Risk Appetite Statement:

In qualitative risk management, all risks, including risks that emerge
due to changes in the environment, are identiﬁed and reported
to management, while risks to the Group are discussed at the
management level as needed. Risks identiﬁed in this manner are
evaluated not only in terms of the economic loss or frequency ofoccurrence but also in terms of business continuity and reputation.
Risks that have a large impact on the ﬁnancial soundness andbusiness continuity of the Group or of individual Group companies(6) Delayed response to stricter global focus on human rights◯Risk that Tokio Marine Group s efforts regarding respect for human rights areperceived as inadequate by society, damaging our reputation

Response to the impact on business continuity and reputation
Publicly disclose our fundamental approach to climate change,
underwriting and investment policies, and the initiatives basedon these, and exchange opinions with experts and advisors in
the climate field●

Response to the impact on business continuity and reputation● Publicly disclose our fundamental approach to human rights, human rights
basic policies, management structure for respect of human rights,
guidelines for responsible procurement, and initiatives based on these,and exchange opinions with experts and advisors in the human rights field
051

2 Strategy and Business Platform Supporting Our Purpose Story | Capital Policy and the Mid-Term Business Plan | CFO Message▶Material Risks for Fiscal 2023
Emerging risks/Scenarios(1) Domestic or overseas economic crisis, chaos in financial and capital markets◯The value of the Group s assets may fall substantially due to a global economic crisis on
the magnitude of the 2008 global financial crisis, or turmoil in financial and capital markets
caused by geopolitical risk.

(2) Loss of confidence in JGBs
◯The value of the Group s assets may fall substantially as Japanese government bonds
plummet in value due to a decline in the government s creditworthiness or the
emergence of hyperinflation.

Reference: Quantitative Risk Management
Examples of responses
Response to economic impact● Investigate the impact on the market due togeopolitical risks● Control exposure through credit risk aggregation andmanagement● Conduct stress tests to confirm capital adequacy andfunding liquidity● Establish action plans for financial crises and interest
rate increase risks(3) Major earthquakes◯A major earthquake beneath Tokyo or along the Nankai Trough may lead to significant humanand material losses, causing widespread disruptions to social and economic activities, including
those of the Group, resulting in large insurance payouts.

(4) Major wind and flooding disasters (including physical risks of climate change)◯Major typhoons or torrential rains may cause extensive physical damage, leading tosignificant disruptions in social and economic activities, including those of the Group,
resulting in large insurance payouts.

(5) Volcanic eruptions◯The eruption of Mount Fuji or similar volcanic activities could result in widespread physicaldamage due to volcanic ash and other effects, leading to significant disruptions in social andeconomic activities, including those of the Group, resulting in large insurance payouts.

(6) Pandemics◯The widespread outbreak of a new infectious disease could result in significant
insurance payouts.

(8) Inflation◯Due to soaring raw material costs and rapid increases in global prices, insurance payout
costs rise, resulting in diminished underwriting profits from the inability to revise
products in line with risks or secure reinsurance.

(9) Disruptive innovation◯Innovations that drastically reshape industry structures through digital transformationand innovative new entrants may erode the Group s competitive advantage and lead tosignificant reductions in premium income and profits.

(trillions of JPY)

124％

3.4

Response to economic impact● Ensure the competitive advantage of our insurance
business by implementing basic strategies andexecuting projects for digital transformation● Expand into new businesses, primarily in areas
closely aligned with our insurance operations

Risk*2Concept of capital management based on the Economic Solvency Ratio (ESR)
ESR

4.3
Response to economic impact● Analyze the impact of inflation on insurance products
and undertake product revisions and underwriting
commensurate with risk

*1: Calculated by adding the value of catastrophe loss reserves, deducting for goodwill, andmaking other adjustments to consolidated net assets on a financial accounting basis.

▶Status of the Economic Solvency Ratio (ESR)

Response to the impact on business continuity and reputation● Establish crisis management systems and business
continuity plans, and verify their effectiveness throughemergency drills● With respect to (7) shown at left, develop
cybersecurity measures, and verify their effectivenessthrough emergency drills◯A cyberattack targeting many Group customers or supply chains may lead to significant
insurance payouts.
◯A cyberattack targeting the Group s systems may result in the leakage of sensitive
information and disruptions to business operations.

The target range of the Groupʼs ESR is 100%‒140%, andas of March 31, 2023, the Groupʼs ESR was 124%,
conﬁrming that the Group is adequately capitalized.
We also conduct stress tests based on scenarios involving
signiﬁcant economic losses from material risks such as
domestic and international economic crises, disruptions in
ﬁnancial and capital markets, loss of conﬁdence in Japanese
government bonds, major earthquakes, major wind andwater-related disasters, and widespread outbreaks of new
viruses. We also assess scenarios where multiple criticalrisks materialize simultaneously. Through these stress tests,
we conﬁrm separately that there are no issues regarding
capital adequacy and liquidity.

Net asset
value

140%
100%

TargetRange

Implement:● Business investment, and/or● Shareholder return●

Additional risk-taking, and/or

Strategically consider:● Business investment, and/or● Shareholder return●

Additional risk-taking, and/or

Aim to recover the capital level through the accumulationof profit● Control the risk level by reducing risk-taking activities●

De-risking
Consider capital increase● Review of the shareholder return policy●●

March 31, 2023
*2: Amount of risk calculated by a model using 99.95% VaR (AA-rated basis)

2
Strategy and Business Platform Supporting Our Purpose Story(7) Cyber risk

Response to economic impact● Appropriately assess risks, including risk aggregation,and develop products that meet customer needs,
while generating stable profits throughrisk-appropriate underwriting, risk diversification, andarranging reinsurance● With respect to (3), (4), and (6) shown at left, conduct
stress tests to confirm capital adequacy and funding
liquidity

In quantitative risk management, the Company measures risk
amounts and conducts stress tests using risk models basedon the latest knowledge available, verifying from multiple
perspectives that its capital is suﬃcient relative to the risks it
holds, with the aim of maintaining its credit ratings andpreventing bankruptcy.
Speciﬁcally, the Company quantiﬁes potential risks using astatistical metric called “Value at Risk (VaR)” on a 99.95%
conﬁdence level, which corresponds to an AA credit rating, andveriﬁes its capital adequacy based on the Economic Solvency
Ratio (ESR) arrived at by dividing net asset value*1 by risk
capital. A 99.95% VaR is equivalent to the damage caused byan occurrence of a risk that happens once in 2,000 years.
Although many insurance companies around the world use
99.5% VaR (once in 200 years), Tokio Marine Group uses amuch more stringent standard to evaluate risk capital.

(10) Continued mutation of the COVID-19 virus◯The continued mutation and sustained spread of COVID-19 may lead to disruptions inbusiness activities.

(11) Geopolitical risk
◯Escalation of tensions between nations into military conflicts could lead to extensive
human and material damages, leading to significant disruptions in social and economic
activities, including those of the Group.

(12) Conduct risk
◯Deviation between industry and corporate practices and societal norms could lead tothe perception that the initiatives of the Tokio Marine Group are inadequate by society,damaging our reputation.

(13) Violation of laws and regulations◯Non-compliance with regulations concerning personal data protection, anti-money
laundering, and the reinforcement of economic sanctions related to the U.S.-China
tensions and the Ukraine conflict may result in the imposition of fines and penalties andharm the Group s reputation.

052

Response to the impact on business continuity and reputation● Establish crisis management systems and business
continuity plans, and verify their effectivenessthrough emergency drills (Response to economic
impact is detailed in (1) shown at left)

Response to the impact on business continuity and reputation● Conduct surveys on employee awareness andbehavior, and enhance the efforts of the Group bycompiling and sharing best practices
Response to the impact on business continuity and reputation● Monitor domestic and international social
environments, trends in government agencies, andchanges in regulatory requirements, and takenecessary measures accordingly053

2 Strategy and Business Platform Supporting Our Purpose Story | Capital Policy and the Mid-Term Business Plan | Review of the Mid-Term Business Plan to Date

Review of the Mid-Term Business Plan to Date

Adjusted ROE (normalized basis)

12.0%

Tokio Marine Group has steadily and swiftly implemented the strategies set forth in the Mid-Term Business Plan.
By addressing the challenges carried over from each mid-term plan in the subsequent plan,

Adjusted
net income

we aim to achieve the world s top-class EPS growth and enhance ROE.

431.1billion yen

Cost of Capital 7%

2011

2012

2013

2014

2015

Mid-Term
Business Plan

Priority Strategies

Structural reform to businesses that generate proﬁt● Transformation into a well-balanced business portfolio

20192020 (FY)「To Be a Good Company 2020」

Unlock our potential● Pursue growth opportunities●

Capitalize on changes● Advance our business platform●

Further diversiﬁcation of the portfolio
Enhancement of the business structure● Strengthening of integrated group management
●
●

2

●
●

Main KPIs

Realized ROE exceeding the cost of capital(7%) through the following measures
Signiﬁcantly increased proﬁtability in the domestic non-life
insurance business, which was a major issue, led by auto insurance● Realized stable proﬁt growth in the domestic life insurance
business by focusing on the highly proﬁtable living protection ﬁeld
● Realized strong proﬁt growth and contributed to Group businessand geographic diversiﬁcation through the organic growth of the international
insurance business and the acquisition of the Delphi Financial Group● Continually reduced risk, for example, by selling business-related
equities in the amount of 336 billion yen over three years●

Review of thePriority Strategies

Review of
the Mid-TermBusiness Plan

2014 Results

Achievementof Main KPIs

［Issues remaining from the 2009‒2011 Mid-Term Business Plan］

ROE exceeding the cost of capital(A critical challenge is to realize proﬁtability
in the domestic non-life insurance business.)

9.3％

7% or higher

C/R (TMNF)

90.6％

95.0％

EV increase
357.5 billion yen(three-year total, TMNL)
Adjusted earnings(international insurance business) 145.5 billion yen

180 billion yen●

Realized sustainable proﬁt growth andhigher ROE primarily through the following measures
Enhanced the business model mainly by strengthening life andnon-life cross-selling initiatives, providing products and creating
a service system that is resilient to wide-area disasters● Reinforced R&D functions by providing products and services in
anticipation of changes (such as insurance designed to promotehealth improvement and auto insurance using drive recorders)and establishing the Digital Strategy Division● Advanced business through both organic growth and M&A, including the
expansion of specialty insurance in Japan and the acquisition of HCC● Enhanced the business platform by strengthening integrated groupmanagement, especially by establishing a Group Chief Oﬃcer system
and launching and bolstering our global committees●

2017 Results

Mid-Term Business
Plan (2017)10.0％*

1

Approximately 9%397 billion yen*1

350−400 billion yen

Mid-Term Business Achieved
Plan (2014)

Adjusted ROE

Adjusted ROE of 10% or more
● Adjusted net income of 400−450 billion yen● Payout ratio of 35% or higher

Adjusted ROE of approximately 9%● Adjusted net income of 350−400 billion yen● Steady growth of dividends in line with proﬁt growth●

Adjusted ROE
Adjusted net income

Annual dividend per share

160 yenSteadily strengthen the earnings base primarily
through the following measures
Make strategic changes to the portfolio that include the acquisitionof Pure, continued bolt-on M&A, and the sale of Tokio Millennium
Re Ag (TMR)● Enhance the business structure with the creation of claim
services using satellite images and AI, the launch of digital labs
in ﬁve locations worldwide, and a system to promote the useof technology● Strengthen integrated group management by promoting the useof talent and spreading the Group culture on a global basis.
As a result, we have expanded more Group synergies●

Achieved

Steady growth(95 yen in ﬁscal 2014)

Mid-Term Business
Plan (2020)

2020 Results
Adjusted ROE
Adjusted net income
Payout ratio*4

Achieved

2

10% or higher*

431.1 billion yen*2

400−450 billion yen*3

12.0％*

42%

Strategy and Business Platform Supporting Our Purpose Story

Adjusted ROE of 7% or higher
Improve the combined ratio (C/R) of the domestic non-life
insurance business to 95%● Increase the embedded value (EV) in the domestic life
insurance business by 180 billion yen (three-year total)● Adjusted earnings of 100 billion yen in the international insurance business2018

A global insurance group that delivers sustainable growth by providing safety and security to customers worldwide−Our timeless endeavor to be a Good Company−

A global insurance group that realizes sustainable growthby oﬀering quality that wins over customers

●

2017

「To Be a Good Company 2017」

Innovation and Execution 2014

Vision20163

35% or higher

100 billion yen［Remaining issue］

Build a foundation that enables sustainableproﬁt growth and higher ROE［Remaining issue］

Proﬁt growth by establishing an earnings base［Remaining issue］

Advancement of greater risk diversiﬁcation as well as further
improvement of proﬁtability in the insurance business, andthe ability to respond to an increasingly diverse range of issues*1 Figures based on the market environment as of March 31, 2015, excluding FX eﬀects and the one-time impact of U.S. tax reform after the impact of natural disasters normalized to an
average annual level.
*2 Figures based on the market environment as of March 31, 2018, after adjusting for normal years of natural disasters and excluding the impact of the COVID-19 pandemic.
*3 Figures based on the market environment as of March 31, 2018, after adjusting for normal years of natural disasters.
*4 The payout ratio is based on ﬁve-year average adjusted net income. Based on original projections.
054

055

2 Strategy and Business Platform Supporting Our Purpose Story | Capital Policy and the Mid-Term Business Plan | Current Mid-Term Business Plan 2023 -Adapt, Lead, Innovate-

Current Mid-Term Business Plan 2023 −Adapt, Lead, Innovate−
Through our “2 + 1 Growth Strategy” under the
Mid-Term Business Plan (MTP) 2021‒2025, we set themedium- to long-term goals of a win-win situation withstakeholders, the implementation of a “Glocal ×
Synergy” strategy, as well as growth and stable highproﬁt, represented by adjusted net income above 500
billion yen and adjusted ROE of around 12%.
In pursuit of these objectives, we set initial MTP
targets of adjusted net income with a CAGR of +3%‒7%(approximately 480 ‒540 billion yen) and adjusted ROEof around 12%. However, for ﬁscal 2023, the ﬁnal yearof the MTP, we anticipate surpassing these targets
signiﬁcantly, as well as exceeding our medium- tolong-term expectations with adjusted net income of
670.0 billion yen and ROE of 17.1%. These projections
are underpinned by enhanced revenue from domestic ﬁreinsurance and a rise in investment income acrossdeveloped nations, excluding Japan.

A global insurance group that delivers sustainable growthby providing safety and security to customers worldwide−Our timeless endeavor to be a Good Company−

Long-term vision▶Progress of the Current MTP
In fiscal 2022, we posted adjusted net income of 444.0 billion yen and adjusted ROE of 11.1%. On a normalized basis, excludingtransient factors, adjusted net income was 617.1 billion yen and adjusted ROE was 15.1%.
For fiscal 2023, we are projecting figures above our MTP with adjusted net income of 670.0 billion yen and adjusted ROE of 17.1%.

FY2023 Plan

FY2023 Projections

FY2022 Results

FY2020 Results

Adjusted
net income

CAGR*1 +3%‒7%

CAGR*2 +15%
670.0 billion yen

617.1 billion yen

446.0 billion yen*3

Adjusted ROE

Around 12%

17.1%

15.1%

11.5%*3

48.5%

40%

100.0 billion yen

50.0 billion yen(announced in May 2021)(normalized, with actualin parentheses)(444.0 billion yen)

(11.1%)(normalized, with actualin parentheses)(399.6 billion yen)

(11.3%)

Shareholder return▶Condition Realized in the Long-Term Vision

Win-Win situation with stakeholders

Payout ratio*4
Growth and stable high proﬁt

Glocal × Synergy

Medium- to long-term targets of more than
500 billion yen in adjusted net income
and around 12% in adjusted ROE●

Precisely respond to quickly changing
customer needs and implement
products/services and channel strategies
reflecting the market

Flexible execution

100.0 billion yen(set 50.0 billion yen
as first step in May 2023)

2▶Breakdown by Business

Enhance the proﬁtabilityof the insurance business

New Markets × New Approach

50%▼

50% (revised in Nov. 2021)

Optimize premium rates and increase rates
based on market hardening● Streamline operations while thoroughly utilizing
digitalization●

Business unit profits for the fiscal 2022 results and the fiscal 2023 projections have both been progressing well, centered on
domestic non-life insurance and our overseas businesses.
In the domestic non-life insurance segment, the challenges posed by the increase in automobile loss costs had an impact, yet
our disciplined underwriting practices, encompassing rate increases for fire insurance, led to improved revenue. In the international
insurance segment, our disciplined underwriting leveraging the hard market environment combined with expansion of investment
income serve as catalysts for profit growth (see pp. 133‒147) .

FY2023 Plan

FY2023
Projections

FY2022 Results(normalized, with actualin parentheses)(normalized*3, with actualin parentheses)

CAGR*1 +3%‒7%

CAGR*2 +15%
670.0 billion yen

617.1 billion yen

446.0 billion yen

Domestic Non-Life
Insurance*5

CAGR*2 +6% or higher(of which, underwriting profit +10%)

excl. FX 171.1 billion yen

Domestic Life
Insurance*6

Stably secure50.0 billion yen level

39.0 billion yen

excl. FX 46.0 billion yen

International
Insurance

CAGR*2 around +9%

CAGR*2 +28%
376.0 billion yen

355.2 billion yen

OtherBusinesses*7

About 70.0 billion yen

94.0 billion yen(announced in May 2021)

Business investment for the next growth stage

Technology

Business Platform−Mission Driven−

Human Resources
Expert talent development● Global talent/management development● Diversity & Inclusion●

ERM−Risk Culture−

Integrated Group Management
Sharing of best practices● Synergy-inducing system● Global management framework●

Adjusted net income

Corporate Culture
To Be a Good Company● Resolution of issues for society/customers● Robust and agile organization●

Business
Unit
Proﬁts,etc.

*1: Compared with FY2020. It was explained that OG was more than 5% at the IR
briefing in May 2021.
*2: Compared with FY2020*3: Launch figures to serve as starting points for the current MTP (setting impacts fromnatural catastrophes as the level for a normal year and excluding the impact of
COVID-19 and exchange fluctuations)*4: The payout ratio is on five-year average adjusted net income. Based on
projections at the beginning of the year. The payout ratio will be boosted to
50% in fiscal 2023. DPS will be boosted with growth in profits as a key
driver (dividends will not be cut, in principle).
056

CAGR*2 +5%161.0 billion yen(444.0 billion yen)

144.6 billion yen(109.4 billion yen)44.9 billion yen(36.4 billion)(218.6 billion yen)

72.4 billion yen(79.6 billion yen)

FY2020 Results(399.6 billion yen)

Strategy and Business Platform Supporting Our Purpose Story

2+1 Growth Strategy

Capital leveladjustment

40% or higher

138.5 billion yen(175.3 billion yen)

52.7 billion yen(52.7 billion yen)180.1 billion yen(91.6 billion yen)74.7 billion yen(80.0 billion yen)

*5: Domestic non-life insurance = TMNF
*6: Domestic life insurance = TMNL
*7: Other domestic non-life insurance, financial and other businesses, and gains on
the sale of business-related equities, etc., that are not included in business unit
profits057

2 Strategy and Business Platform Supporting Our Purpose Story | Capital Policy and the Mid-Term Business Plan | Beyond the Mid-Term Business Plan

Beyond the Mid-Term Business Plan
Having surpassed our medium- to long-term targets of adjusted net income above 500 billion yen and adjusted ROE ofaround 12%, we are now looking beyond these goals.
Specifically, we aim to continue achieving world-class EPS growth organically (currently at around +5‒7%) and raise
our ROE level slightly to be on par with our European and American peers, thus expanding our equity spread.

▶Adjusted Net Income/Adjusted ROE*1▶Improvement of the Equity Spread

20.0%

Improve adjusted ROE(Image)Expand adjusted net income

Tokio Marine(Image)15.0%

Peer 2Peer 1
Peer 4

Adjusted
ROE

Adjusted
net income(billions of JPY)

TSR for10 years*3(CAGR)BreakthroughPeer 3
Insurance companies
in the world*5
Average 10.81%

2

5.0%

500

Insurance companies
in the world*6
Average 2.33%

12%
0.0%
−6.0%

−4.0%

−2.0%

0.0%

2.0%

Ten-year average
equity spread*4

Organic growth
as a world-class property
and casualty (P&C) company*3: CAGR between April 1, 2013, and March 31, 2023. Source: Bloomberg*4: ROTE is calculated with capital costs. We use adjusted ROE for our ROTE. The
capital costs of the five listed companies are calculated with CAPM (= risk freerate + β × market risk premium), with 6% for the market risk premium.
Source: Bloomberg

Inorganic growth utilizing
our strong ability
to execute M&As

4.0%

6.0%

8.0%

10.0%

Peers: Allianz, AXA, Chubb, Zurich*5: MSCI World Insurance Index. TSR Source: Bloomberg*6: Average of 176 listed global insurance companies

Strategy and Business Platform Supporting Our Purpose Story

Medium- tolong-term targets
announced
in November 2017*2

10.0%

Prior and later
expansion of areas
100

0%
2011

2023
projections*1: Adjusted for natural disasters in normal years; excludes the impact of COVID-19 in 2020, North American capital gains, etc., and gains on the sale of business-related equities(on the portion of sales exceeding 100 billion yen) in 2021, and the war in Ukraine and South African floods in 2022
*2: Adjusted ROE of 12%, adjusted net income of 500 billion yen

058

059

2

initiatives based on our purpose. We also established theSustainability Committee, which includes executives from overseas
Group companies, to actively engage in discussion regarding ourglobal sustainability strategy and initiatives.
The Sustainability Committee goes beyond discussing overarchingpolicies; it also focuses on showcasing how social challenges aretackled through both domestic and international business operations.
This approach has led to increased communication between
Japanese and overseas branches and played a crucial role in
expediting strategic decision-making and implementation throughout
the Group. These initiatives have eﬀectively propelled the permeationof sustainability policies and strategies across the Group. Centered on
the eight key areas (materiality), eﬀorts to address social challenges
through business activities are gaining global momentum.

Strategy and Business Platform Supporting Our Purpose Story| Sustainability Management | CSUO Message

By contributing to building abetter society through constantly
seeking and oﬀering solutions toever-changing global issues as
only Tokio Marine can, we will
accelerate the upward spiral ofresolving social issues while
growing our business.

Managing Director
Group Chief Sustainability Oﬃce (CSUO)

Environmental Changes Surrounding Sustainability
In this rapidly changing and unpredictable era, the environment
surrounding sustainability is also undergoing constant shifts. The
scope of societal issues we need to address has expanded beyond
global warming and climate change and the increasing frequency andintensity of natural disasters to encompass such areas as humanrights and biodiversity preservation. Against this backdrop, my mission
as CSUO is to make sure we continue to embody thislong-established DNA of solving social problems and directly connectthat to growth for society and the Company. That is, “to continuebuilding a sustainable society by balancing our corporate activities
and the resolution of social issues.” Despite the changing times, thecore concept of our deeply rooted sustainability strategy has remained
unchanged since our inception. We must continue to step up
our eﬀorts and capacity to solve issues. As these challenges become
increasingly diverse and complex, it is important that we employ
our expertise and know-how globally and mobilize as “one team” tocombat them. It is imperative that we unite the individual contributionsof each Group company and carry out collective activities with agreater sense of urgency.
Establishment of Promotional Framework and Penetration of
Global Sustainability Strategy
To swiftly execute this strategy across the board, in ﬁscal 2021 weenacted the Group Sustainability Policy applicable to all Group
companies and identiﬁed eight key areas (materiality) for focused

Accelerated Integration with Business Activities and Response to
New Social Challenges
These initiatives have contributed to the incremental global adoptionof our sustainability strategy, and we will take steps to further reﬁne it▶Changes in Major Areas of Activity
FY2021 (Results)

FY2022 (Results)

Establishment of Global Sustainability
Promotion Structure
Establishment ofa promotion structure
Establishment ofsustainability-related
policies
Strengthening of
the connection
with business operations
Strengthening of
disclosuresand commitments

060

Established the Sustainability Committee
Reﬂected ESG performance in executive compensation● Revised the sustainability award system
●
●

●
●

●
●

Organized a basic policy structure for ESG
Established basic policies for the Group
Developed sustainability strategies
Established a PDCA cycle

Revised the sustainability report
Disclosed the KPIs and enhanced the TCFD disclosures(physical risks related to underwriting)● Revised our
Basic Approach to Climate Change●●

Enhancing Value by Circulating Corporate Activities and the
Resolution of Social Issues
Guided by our enduring purpose of protecting customers and society
in times of need, we will combine the collective capabilities of theGroup and take pride in our commitment to be a front-runner insolving social issues. At the same time, we will strive to increase bothsocial value and economic value (proﬁt growth) by circulating ourcorporate activities against the resolution of social issues.
We sincerely appreciate the ongoing understanding and support of
all our stakeholders.

FY2023 (Plans)

Global Penetration of Sustainability Strategy
Initiatives in Key Areas
Penetration ofsustainability strategy

Steady implementationof initiatives related toongoing issues
Response to current
issues givenchanges in the external
environment●

Embedded sustainability strategy and policy(released summaries and videos related toenvironmental and human rights policies)

Clariﬁed initiatives for future generations
and executed them globally● Enhanced engagement and ensured strict
compliance with our Climate Policy●

Contributed to the establishment of an internationalframework for addressing climate change● Enhanced the TCFD disclosures(physical risk, transition risk)●

2
Strategy and Business Platform Supporting Our Purpose Story

In addressing climate change, we are not only developing and oﬀering
products and services that contribute to the growth of renewableenergy, but also engaging with more than 250 companies on climatechange and environmental themes and operating a renewable energy
fund to promote green investments. Furthermore, we have establishedthe GX Round Table to foster collaboration across the Group in thegreen transformation (GX) ﬁeld, advancing support for the global
transition to a decarbonized society.
Within the domain of disaster resilience, we are actively
broadening our eﬀorts across pre-emptive and post-incident strategies,
with the goals of accident prevention, mitigating burdens during
incidents, and expediting recovery while averting future recurrences.
Harnessing digital technology, we have established streamlined
and automated insurance claim procedures, ensuring swift deliveryof beneﬁts to those impacted. In the United States, we provide
accident-detection sensors free of charge, integrating digital
innovation into product evolution and launch to forestall accidents
and curtail losses through data-driven insights. Our commitment
extends to collaborative eﬀorts in disaster prevention and mitigation
across diverse industries through CORE, a disaster prevention
consortium. This consortium has generated speciﬁc solutions such as
the Real Time Hazzard and resilient information delivery services,
garnering support from over 100 participating companies andmagnifying its societal impact.
We are also making consistent strides in other crucial domains,such as broadening Environmental, Social, and Governance (ESG)
investment and ﬁnancing, making contributions towards future
generations, improving disclosures in line with the recommendationsof the Task Force on Climate-related Financial Disclosures (TCFD),
and crafting a policy for human rights due diligence.

Kiyoshi Wada

Protecting customers and society in their times of need has been
Tokio Marine Groupʼs raison dʼetre since our founding, aiming to be a
global insurance group that delivers sustainable growth by providing
safety and security to customers worldwide. Based on this purpose,
we have confronted evolving social challenges head-on and oﬀered
solutions that only we can. Our historical contributions, fromsupporting Japanʼs modernization as a trading nation through maritime
insurance to aiding postwar motorization with automobile insurance
and promoting renewable energy through tailored insurance packages,
illustrate how our core business activities inherently address social
issues and embody sustainability. The spirit of sustainability ingrainedin our 40,000 employees worldwide is the very essence of our DNA,a legacy passed down through generations since our founding.

going forward. Speciﬁcally, we aim to create a state where
exceptional ideas arising from each workplace, which contribute tosolving social challenges, are transformed into unique businesses andservices distinctive to the Group through eﬀective communication
among diverse employees and persistent hypothesis testing. To
achieve this, we are enhancing the incorporation of our sustainability
strategy into business plans and establishing a mechanism to review
initiatives based on key performance indicators (KPIs). This initiative
takes center stage in 2023. Furthermore, we recognize theimportance of cultivating individuals who can drive the execution ofstrategies at each Group company. These individuals should embrace
the sustainability strategy as their own, integrate it into theirorganizational plans, and champion its implementation by involving
their peers. To this end, we are developing a systematic curriculum
for talent development in the theory and practice of sustainability
strategy, scheduled for implementation this ﬁscal year.
As new social issues related to human rights and biodiversity
conservation emerge, we remain attuned to changing perspectives
and societal expectations, responding promptly. Addressing humanrights concerns, we have already created a human rights risk map,
identifying priority areas for action among “business partners,” “value
chains,” and “employees.” In terms of biodiversity conservation, we
continue to advance activities emblematic of the Group, such as
mangrove planting and ocean conservation, while considering theforthcoming Taskforce on Nature-related Financial Disclosures(TNFD) framework for assessing impacts on ecosystems and natural
capital resulting from business activities.
These endeavors do not operate in isolation, however. By
proactively disclosing our various initiatives, such as our TCFD
Report and Human Capital Report, we seek to invigorate dialogue
with stakeholders, leveraging insights gained to further elevate oursustainability strategy.

Further integration of sustainability strategy and business operations
Strengthening of eﬀorts in key areas and strategic disclosures
●

●
●

●
●

Enhanced communication withoverseas sites(provided quarterly action plans)

Further integration ofsustainability strategy andbusiness operations

Expanded ESG investment and ﬁnancing
Boosted score from key ESG rating agencies

Started human rights due diligence initiatives
Launched Diversity & Inclusion (D&I)
communities in Japan, Asia, and Europe

Strengthening of efforts in
key areas
Response to current issues
given changes in theexternal environment

Integrate sustainability strategy into business plans
Develop a support program for sustainability promotion oﬃcers● Establish quarterly follow-up sessions for action plans●●

Take steps to realize a decarbonized society
Undertake initiatives for future generations globally● Respect human rights● Expand ESG investment and ﬁnancing● Make eﬀorts to conserve biodiversity● Invest in human capital and further promote D&I
●
●

061

2 Strategy and Business Platform Supporting Our Purpose Story | Sustainability Management | Sustainability Strategy Promotion Structure

Sustainability Strategy Promotion Structure

Structure for Promoting Eﬀective Sustainability
To further embed our sustainability strategy in these rapidly changing
times, every employee must understand and resonate with related
policies and strategies, while at the same time considering them as
their own and taking concrete actions accordingly.
To drive and support such a transformation of employee andorganizational behavior, we established the Sustainability Committee
led by the CSUO. Launched in 2021, this committee includes not
only the CEO, CFO, CSO, and CHRO but also non-Japanese chiefoﬃcers. By creating working groups and task force under thisframework, we have created a ﬂexible structure to address the very
essence of social challenges and facilitate coordinated eﬀorts on a
global and Group-wide level.
The Sustainability Committee convened four times in ﬁscal 2022,
setting plans and challenges, executing initiatives, and reviewing
outcomes. Deliberations were promptly reported to the Management
Meeting and Board of Directors, and the feedback obtained there
has been instrumental in enhancing subsequent discussions,assessments, and strategic advancements.

▶Organizational Structure for Promoting SustainabilityGroup

To further strengthen and accelerate the integrated management ofsustainability strategy and business operations, it is imperative toestablish a robust PDCA cycle anchored in our promotion framework,
which includes the establishment of the CSUO position and theSustainability Committee.
Both domestic and international Group companies are explicitly
incorporating eﬀorts to address social challenges through businessactivities into their business plans. We have also developed
mechanisms to ensure eﬀectiveness, such as creating a process
for reviewing these initiatives and building a system to recognize
outstanding ideas and initiatives into the TokioMarine Innovation

Management Meeting

Incorporate initiatives that contributeCEO

to addressing societal issues throughbusiness activities explicitly into

CSUO

business plans (promoting energy
eﬃciency in product development
and the oﬃce environment).

Secretarial Office
Products and services

Operations

Working Group
Social contributions Communications Business strategies

Task Force
TCFD

Departments in charge of corporate planning,international business, and financial planning

Diversity
Council*Group companies in the domestic
life insurance business(*: see p. 92)

Group companies in the domestic
financial and other businesses

Group companies in
the international insurance business(1) Role of the Sustainability Committee(2) Roles of Other Organizations

Deliberates on Tokio Marine Group s sustainability strategies● Oversees the overall management and execution of sustainability
strategies● Reports to and submits matters for discussions to the Board of
Directors and in relevant management meetings❶Secretarial Office:Handles administration for the committee (as well as the working
groups and task force) and promotes the sustainability strategies❷Working Groups:
Formulate and execute annual plans for each type of issue, with
input from the relevant departments of Tokio Marine Holdings andmembers of the Group companies❸Task force:
Organizes members of projects tasked with strengthening
short-term initiatives●

Matters discussed by the Sustainability Committee in ﬁscal 2022
April 2022

Review of ﬁscal 2021 initiatives and formulation of new plan forﬁscal 2022
Overview of new initiatives for contributions to future generations

August 2022

Contributions to future generations (identiﬁcation anddevelopment of initiatives)
Proposed revisions to strengthen the Climate Policy

November 2022

Penetration of sustainability strategy within the Group
Progress in response to key ESG rating agencies and futureareas of focus

1 2Incorporate intobusiness plans

Establishmechanism toensureeﬀectiveness2. Establish mechanism
to ensureeﬀectiveness(1) Set up follow-up sessions forquarterly action plans(2) Provide support through the
TokioMarine Innovation
Program

PDCA
cycle
Get feedback fromstakeholders

Group Companies
Group companies in the domestic
non-life insurance business* An initiative where ideas from employees of Group companies are solicited for
addressing social challenges through business activities, and applicants themselves
bring these ideas to fruition.

4. Get feedback fromstakeholders
Reﬁne initiatives based on
feedback and incorporate into
the following year s plan

Make strategic
disclosures

4 3

3. Make strategic
disclosures

2
Strategy and Business Platform Supporting Our Purpose Story

Sustainability Committee(comprising the CEO and C-suite)

Program*. Additionally, by externally disclosing speciﬁc initiatives
and processes that emerge from these eﬀorts, we aim to engage indialogue with our stakeholders, incorporating their feedback into thefollowing yearʼs initiatives.
By setting this PDCA cycle in a positive feedback loop throughout
the Group, we further embed our sustainability strategy and elevatethe content and insights of our initiatives, enabling us to accelerate
our sustainability strategy across the Group.

▶Accelerating the Sustainability Strategy through a PDCA Cycle

1. Incorporate intobusiness plans

Board of Directors

Four times annuallyStrengthening the Integration of Sustainability Strategy
and Business Operations through an Eﬀective Promotion System

Use sustainability reports andother means to disclose initiative
details and processes

Develop personnel capable of driving sustainability initiatives

Review of ﬁscal 2022 initiatives and formulation of new plan
February 2023 for ﬁscal 2023
Progress and development of human rights due diligence

062

063

2 Strategy and Business Platform Supporting Our Purpose Story | Sustainability Management | Eight Material Issues (Materiality) and Four Priority Issues Specified

Materiality

Eight Material Issues (Materiality) and
Four Priority Issues Speciﬁed
Taking into account discussions within our Sustainability Committee
and advice from external experts, we identiﬁed eight material issues(materiality) and four priority issues to be addressed (“What”),
beginning with our purpose (“Why”). The selection of these eightmaterial issues was guided by the value we seek to deliver tostakeholders, considering the changing environment, and referencing
key frameworks addressing social concerns. Further assessment wasundertaken based on the dual axes of “stakeholder expectations andWhat(four designated as priority issues)(1) Combat climate change(priority)interests” and “relevance to Tokio Marine Groupʼs business,” leading
us to pinpoint four priority issues that warrant focus. For each material
issue, we implement diverse measures depending on their impact on
the Groupʼs operations in terms of risk and opportunity (“How”). Our
strategy goes beyond risk mitigation and opportunity capture as weseek to transform risks into opportunities, thereby elevating both our“social value” and “economic value (proﬁt growth)” toward solvingsocial issues.

(2) Improve disaster resilience(priority)

What

How

Environmental changes

Important business matters

Risks and opportunities

PurposeMateriality

Value creation(4) Promote and support
diversity and inclusion(priority)

Amid major changes in the economic environment, social issues are becoming increasingly
complex and diverse. For Tokio Marine Group to grow sustainably by offering solutions
to such issues, it will be important for its more than 40,000 employees to maximize theirpotential and combine their individual skills into collective capabilities. Accordingly, promoting
and supporting diversity and inclusion is an important management strategy for the Group,
and it intends to step up the initiatives it has been carrying out for this purpose.

Deﬁning Value to Provide to Our Stakeholders(5) Facilitate andfoster innovation
through digitalization

Rapid progress in technological innovations is driving major societal and economic changes.
To realize sustainable economic growth under those circumstances, all corporations will needto create a basis for technological innovation. Tokio Marine Group is already providing
insurance coverage for new types of risks that have arisen from these changes, including
cyber risk. Furthermore, in addition to insurance payouts, the Group will apply digitaltechnologies and data to provide security to clients before and after any events that might
require insurance claims. In these ways, the Group will work to support corporate growth andeconomic development.

In light of recent changes in the environment, we identiﬁed the value that we provide on an individual stakeholder
basis. Providing these values is indeed our raison dʼetre and the ideal we hope to realize.

Stakeholders

Why(6) Protect the naturalenvironment

Tokio Marine Group understands that a sustainable society, in which everyone can live safely
and securely and pursue any aspiration, depends on the natural environment, the basis for all
life and people s livelihoods. Moreover, the Group recognizes its obligation to help ensurethat future generations inherit a sustainable natural environment, as it is irreplaceable. Basedon these principles, the Group intends to bolster the initiatives it has taken to combat climatechange and protect biodiversity and wetlands through environmental conservation activities,
including its Green Gift project and mangrove planting activities.

(7) Provide education
to children

Education can create a foundation for the future, as each generation faces the changing
challenges of the times. Having specified future generations of people as stakeholders,Tokio Marine Group has a duty to help equip children with the skills they will need in life.
Therefore, the Group plans to strengthen its educational programs, including its Disaster Risk
Prevention Lessons for children, which were initiated following the Great East Japan
Earthquake in 2011.

(8) Disclose highly transparent
and timely information

As an original participant in the Task Force on Climate-related Financial Disclosures (TCFD),
Tokio Marine Group is working to properly disclose information and facilitate widespreadclimate-related disclosure. As part of these efforts, the Group will continue placing importanceon disclosing highly transparent and timely information to earn even more trust fromshareholders and investors going forward.

Value Provided

For customers●

For society●

For employees●●

For shareholders and investors●●

For future generations●

STEP 2Contribute to making customers lives healthy and enriching through products that provide security
and assistance with future-oriented challenges
Contribute to building a sustainable society that can overcome any challenge and ensure the safety
and security of all its members
Help employees reach their highest potential through engagement and opportunities
for them to thrive
Continually increase shareholder returns
Enhance the Group s value and earn the trust of shareholders and investors through timely andproper disclosure along with constructive dialogue
Hand down a sustainable environment and society to future generations by engaging in climatechange countermeasures and the preservation of biodiversity
Support the challenges of future generations by providing education and enlightenment to children

Identifying Eight Material Issues (Materiality)

Tokio Marine Group has identiﬁed eight material issues on which the Group should focus as it works to provide value to each of
the aforementioned stakeholders while referencing the scope of principal frameworks on social issues in and outside Japan,
including the Sustainable Development Goals (SDGs), ISO 26000, and new industry visions.

What

064

STEP 3

2
Strategy and Business Platform Supporting Our Purpose Story

In an age in which many people live past 100, everyone hopes to lead a long and healthy life.
With the aging of the population and widespread advancements in medicine, however, thefinancial burden on individuals, families, and society is growing each year. Tokio Marine
Group intends to address this issue by fully utilizing its extensive expertise to offer
high-value-added products and services while covering disease and illness through its manylife and non-life insurance products.

Identiﬁcation Process of Materiality and Priority Issues【Why/What】
STEP 1

The adverse effects of climate change, including increasingly serious natural disasters,
threaten people s safety and security, and interfere with the sustainable development ofsociety. Tokio Marine Group recognizes the importance of addressing climate change andnatural disasters because it underwrites risks in Japan, a country especially prone to natural
disasters. Therefore, in its roles as an insurance provider, institutional investor, and global
enterprise, the Group intends to deal with these issues head on and contribute to solutions.

(3) Support people s healthy andenriching lives (priority)

Approach
Why

Reasons for selection

Selecting Four Priority Issues

Based on an assessment along the lines of the following two axes, we selected four priority issues on which to focus fromamong the eight material issues.
(1) Expectations and the interest of stakeholders
Assessment based on the content of a stakeholder survey while also taking into consideration such factors as social
perceptions toward each issue and status of incorporation into various ratings.
(2) Importance for Tokio Marine Group
Assessment based on the relationships with the degree of contribution to the Groupʼs purpose, business strategy,
sustainability strategy, and other factors.

065

2 Strategy and Business Platform Supporting Our Purpose Story | Sustainability Management | Eight Material Issues (Materiality) and Four Priority Issues Specified

Metrics and Targets
How

For customers

Stakeholders

How the Groupcan contribute

Materiality
Combat climatechange (priority)

Value creation

Value creation

What are the Group s goals(qualitative or quantitative)?

Achievements so far and future plans

Reduce CO2 emissions from the Groupʼs
operations and meet the RE100 criteria

Targets for ﬁscal 2030
1) Reduce the Groupʼs greenhouse gas emissions by 60%*1
compared with ﬁscal 2015
2) Have renewable energy account for 100% of electricity
consumption at main workplaces
3) Switch all company-owned vehicles to electric vehicles*2(Tokio Marine & Nichido Fire, Tokio Marine & Nichido Life)

1) Fiscal 2022 results: 34% reduction (compared with ﬁscal 2015)
2) Adopt renewable energy at workplaces in Japan, the United States, and Europe (Tokio Marine & Nichido Fire, Tokio Marine &Nichido Life, PHLY, TMK, etc.)
Fiscal 2022 result: 26% (compared with ﬁscal 2020)
3) Tokio Marine & Nichido Fire and Tokio Marine & Nichido Life are gradually making the shift.

Realize carbon neutrality throughengagement with investors and insurance
underwriters

Fiscal 2050 target
Net-zero greenhouse gas emissions (including insurance
customers and investment and ﬁnancing recipients)

Promote engagement on climate change and the environment (Tokio Marine & Nichido Fire, ﬁscal 2022 results: dialogue with morethan 250 companies)
Create decarbonization plans and strategies for underwriting and investment portfolios (ﬁscal 2022 initiative)

Develop and oﬀer products and services
that contribute to renewable energy
development

Fiscal 2022 result: Increased written premium in GX-related insurance products by 6.3 billion yen (compared with ﬁscal 2020)

Continue to facilitate green investing

Strengthened commitment to and involvement in renewable energy funds (62 billion yen committed and 45 development projects asof the end of ﬁscal 2022)

Combat global warming and mitigate
damage from environmental disasters
through mangrove plantations (CO2 ﬁxation)

Continue to maintain carbon neutrality

Achieved carbon neutrality in ﬁscal 2022 (10 consecutive year since ﬁscal 2013)

Enhance response to natural disasters

Develop products and services that provide swift insurance
payments in the event of a large-scale disaster

Reduce time for insurance payment by automating the payment process (from ﬁscal 2022)

Provide security for customers before andafter disasters in ways besides insurance
payments

Collaborate with various industries and companies on disasterprevention and mitigation projects

The number of member companies in the disaster prevention consortium CORE has increased to 100, and the number of working
groups has expanded to 10 (as of June 30, 2023)

Establish sustainable ﬁre insurance systems

Improve proﬁtability of ﬁre insurance by more than 45 billion yen
in ﬁscal 2023 (Tokio Marine & Nichido Fire; business unit proﬁt
compared with ﬁscal 2020)

Increased revenue in ﬁre insurance in ﬁscal 2022 (up by 36.6 billion yen compared with ﬁscal 2020); cumulative improvement ofapproximately 60 billion yen projected in ﬁscal 2023

Develop and provide products and services useful for disasterprevention/mitigation, early recovery, etc.

Conducted joint research into measures for addressing issues such as aging condominiums with the University of Hawaii

Surpass 300 billion yen in cumulative economic value frommangrove plantations by ﬁscal 2038

Plan to provide Real Time Hazzard, which captures ﬂood depth with AI analysis of CCTV footage and sends alert information (ﬁscal 2023)

Major initiatives forﬁscal 2023 (ongoing)

2
Strategy and Business Platform Supporting Our Purpose Story

Improve disaster
resilience (priority)

Increase written premium from green transformation (GX)-related
insurance products by around 7 billion yen in ﬁscal 2023*3(Tokio Marine & Nichido Fire; compared with ﬁscal 2020)

Progress andevaluation*4

For society

Launched an initiative in South Africa promoting adoption of ﬁre insurance and ﬁre alarms bundled together for low-income housing (ﬁscal
2022)

Supportpeople s healthy
and enriching
lives (priority)

Assist with business continuity planning(BCP) in partnership with government bodies
and businesses

Continue providing support to BCP

Cumulative number of agreements with governments (as of the end of February 2023)
・42 prefectures
・13 major cities
・76 municipalities

Respond to asset building and savings
needs in response to longevity risk
(Develop and provide new healthcare
services)

Increase revenue by 20-30 billion yen in the healthcare domain
in ﬁscal 2023*3 (Tokio Marine & Nichido Fire)
Increase the CAGR of new policy premiums by approximately 5%
in ﬁscal 2023 (Tokio Marine & Nichido Life)

Established a preparatory company to conduct validation experiments for new business in the healthcare domain (April 2023)
Expanded ancillary insurance services (including services for early detection of cancer, and direct payment of beneﬁts to aﬃliatedhospitals from February 2022)
Developed and provide new solutions contributing to disease precursor detection (validation experiments for early detection using
Apple Watch started in October 2021)
Achieved CAGR of 11% in new policy annualized premiums at Tokio Marine & Nichido Life in ﬁscal 2022 (compared with ﬁscal 2020)
Established a health promotion consortium in China and collaborating with Japanese and Chinese companies to develop products andservices that enhance healthcare

Widely promote services for facilitating Healthand Productivity Management

Continued selection in the Health & Productivity Stock Selection

Included in the Health & Productivity Stock Selection 2023 (for the eighth consecutive year)

Continue health management support (Tokio Marine & Nichido Fire)

Provided health management support to approximately 2,000 companies (in ﬁscal 2022)*1: Based on our business activities (Scope 1, 2, and 3 (Categories 1, 3, 5, and 6))066*2: EVs, PHVs, HVs, etc.

*3: Net premiums written*4: Generally progressing well067

2 Strategy and Business Platform Supporting Our Purpose Story | Sustainability Management | Eight Material Issues (Materiality) and Four Priority Issues Specified

How

Promote andsupport diversity
and inclusion(priority)

Facilitate andfoster innovation
through
digitalization

For shareholders
and investors

For future generations

Protect
the naturalenvironment

Provide education
to children

Disclose highly
transparent andtimely information*1 Totals for Tokio Marine Holdings and its Group companies worldwide

068

How the Groupcan contribute
Promote diversity and foster an inclusive
corporate culture

Value creation

Value creation

What are the Group s goals(qualitative or quantitative)?

Achievements so far and future plans

Promote and support diversity and inclusion through the Diversity
Council, etc.
Continue to conduct the Culture & Values Survey
KPIs1) Percentage of female directors and Audit & Supervisory Board
members: 30% (fiscal 2027 target)
2) Percentage of female managers at Tokio Marine & Nichido
Fire: 30% (fiscal 2030 target)
3) Percentage of female sub-leaders at Tokio Marine & Nichido
Fire: Maintain above 50%

Created the Diversity Council and the Group Diversity and Inclusion Officer (CDIO) position (fiscal 2021)
Established D&I communities in Japan, Asia, Europe, and the United States (fiscal 2022)
Scored 4.0 out of 5 in the Culture & Values Survey in fiscal 2022*1
Recent progress:
1) Percentage of female directors and Audit & Supervisory Board members: 20% (Tokio Marine Holdings, following the 2023
Ordinary General Meeting of Shareholders)
2) Percentage of female managers at Tokio Marine & Nichido Fire: 11.2% (realized 31.6% on a global basis; as of April 2023)
3) Percentage of female sub-leaders at Tokio Marine & Nichido Fire: 58.9% (as of the end of fiscal 2022)

Share best practices and activities for
improvement throughout the Group

Carry out human rights due diligence and improvement initiatives
based on the UN Guiding Principles on Business and Human
RightsCreated and published a human rights due diligence and improvement policy in line with the UN Guiding Principles on Businessand Human Rights, etc. (December 2021)
Further promote human rights due diligence among employees, our businesses (insurance underwriting, investment, and loans), andthe value chain

Apply advancements in digitalization and data
to increase security for customers in ways
besides insurance payments

Accelerate data strategies through initiatives started by core datacompany Tokio Marine dR Co., Ltd., in July 2021 (expand
provision of pre- and post-incident assurance)

Launch specific initiatives for the comprehensive disaster prevention and mitigation solutions business, such as Real Time Hazzard, withthe disaster prevention consortium CORE̶which began in April 2022 led by the Group̶as its engine (from August 2023)
Develop data-driven products in collaboration with Tokio Marine dRStarted accident prevention and loss reduction efforts in the United States through the distribution of telematics and temperature sensors

Address increasing cyber risks amid digitaladvancements

Increase written premium by around 5 billion yen through cyberrisk insurance by fiscal 2023*3 (Tokio Marine & Nichido Fire;
compared with fiscal 2020)

Achieve double-digit growth in cyber risk insurance each fiscal year (Tokio Marine & Nichido Fire)
Started offering incident response services (from April 2022, the first in the industry)
Expanded emergency hotline services and started responding to cyber-related issues 24/7 (from April 2022)

Use digitalization to support small andmedium-sized enterprises (SMEs)

Increase written premium by 15‒25 billion yen through insurance
for small and medium-sized enterprises by fiscal 2023 (Tokio
Marine & Nichido Fire; same as above)*3

Promote additional compensation based on specially packaged products for small and medium-sized enterprises
Launched a website (BUDDY+) that offers one-stop solutions from information provision to issue resolution, strengthening ourapproach to customers

Improve business eﬃciency with digitaltechnology

Enhance the efficiency of operations with a one-percentage-point
improvement in the combined ratio by fiscal 2023 (Tokio Marine& Nichido Fire; same as above)

Combined ratio of 92.5% as per the fiscal 2023 plan (Tokio Marine & Nichido Fire, 0.9-percentage-point improvement from fiscal
2020 on a normalized basis)

Conserve biodiversity and wetlands throughactivities such as mangrove reforestationand marine protection eﬀorts

Maintain carbon neutrality

Achieved carbon neutrality in fiscal 2022 (10th consecutive year since fiscal 2013)

Promote social programs such as the Green
Gift Global Vitality Program

Have 100% of employees participate in social contribution
activities

100% of employees participated in social contribution activities (fiscal 2022)

Provide various educational programsContinue providing green classes

Green classes were held approximately 900 times and attended by 59,000 people (cumulative total as of March 31, 2023)

Continue providing classes on disaster prevention

Disaster prevention classes were held approximately 1,195 times and attended by approximately 77,000 people (same as above)
Chinese version of disaster prevention classes held 25 times and attended by approximately 1,800 people (same as above)

Continue providing classes on risk and the future

Risk and the future classes held 59 times and attended by approximately 1,900 people (same as above)

Continue implementing StreetWise Finance, a ﬁnancial insurance
education program

Approximately 170,000 participants (cumulative total as of June 30, 2023)

Create pillars other than those above

Creation of new pillars to contribute to future generations (see p. 70)

Disclose information based on the TCFD recommendations
through comprehensive reports, sustainability reports, etc.

Held themed presentations, “Tokio Marine Groupʼs Contribution and Growth Strategy in the Renewable Energy Market (June2021)” and “Our Climate Strategy & the TCFD (January 2021)”

Properly disclose information bystrengthening compliance with the TCFD
and other guidelines

Major initiatives
for ﬁscal 2023
(ongoing)

2

Surpass 300 billion yen in cumulative economic value frommangrove plantations by fiscal 2038

Revised our “Basic Approach to Climate Change” on September 30, 2022
Released the Human Capital Report and TCFD Report 2023 (June 2023)
Looked into disclosing information related to natural capital in line with the TNFD framework*2 Generally progressing well

Progress andevaluation*2

Strategy and Business Platform Supporting Our Purpose Story

For society

For employees

Stakeholders

Materiality

Major initiatives
for ﬁscal 2023

*3 Net premiums written069

2 Strategy and Business Platform Supporting Our Purpose Story | Sustainability Management | Special Features on Future Generations and Human Rights

SpecialFeatureCommitment to Respecting Human Rights

Tokio Marine Group is dedicated to respecting human rights across all business endeavors. Guided by principles such as

Initiatives for Future Generations

the Universal Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises, the ILO International

Based on the strong belief that it is our duty to pass on a bright future to the next generation, we have positioned future

established the Human Rights Subcommittee as part of a promotion structure, conducting risk assessments and impact

generations as stakeholders and are dedicated to entrusting them with a sustainable environment through endeavors such

evaluations regarding human rights issues concerning our stakeholders to clearly identify high-priority challenges. In theas mitigating climate change and conserving biodiversity. In fiscal 2022, we established a cross-functional global task force

future, we will continue to engage in dialogue with our stakeholders, enhancing the sensitivity of our leadership and eachto discuss initiatives for contributing to future generations, which identified three key themes and five priority initiatives to

employee towards human rights to enable swift response to human rights issues.

SpecialFeatureLabor Standards, and the United Nations Guiding Principles on Business and Human Rights, we established the Tokio
Marine Group Basic Policy on Human Rights and are actively advancing initiatives based on this. We have also

focus on. In fiscal 2023, we will promote these efforts both domestically and internationally.
Areas of focus
Restoration of natural capitaland response to climate change

Nurturing the leadersof tomorrow
Supporting the transition toa circular economy

Outline of key initiatives
Disclosure of information on biodiversity conservation and natural capital (planting of mangrove trees and otherreforestation efforts, restoration of seagrass beds)
Investment in natural capital (ESG investment and financing) (impact investment targeting natural capital,
development of general business investment and financial products)
Educational support for children and students and industry-academia collaboration (conducting educationalclasses and fostering talent through collaboration with educational institutions)Support for participation in business activities (providing opportunities for high school students to intern andyoung employees to participate in management)
Support for waste reduction and recycling through insurance (promoting regeneration and reuse of damaged
goods through property insurance)

Summary of Key Initiatives

Promotion Structure

Policy formulationand establishment ofpromotion structure

Formulated the Basic Policy on Human Rights and established the Human Rights Subcommittee
Formulated the Policy to Address Environmental and Social Risks
Developed the Responsible Procurement Guidelines

Board of Directors

Risk assessments

Formulated a human rights risk map
Held human rights workshops

Impact evaluations

Conducted interviews and surveys with rights holders in the value chain
Performed self-assessments using a checklist of humans rights issues within the Group

Restoration of Natural Capital and Response to Climate Change
The preservation of biodiversity and the natural environment is a global priority. Tokio Marine Group started planting
mangroves in 1999, and since then we have been engaging in this distinctive endeavor as “insurance for the future of
the earth” to pass down a safe and secure environment to future generations (total of 12,261 hectares as of March
31, 2023). In ﬁscal 2022, we initiated eﬀorts to preserve seagrass beds, which possess a high capacity for absorbing
and sequestering atmospheric CO2, along with their water puriﬁcation capabilities. Across the Group, we arecommitted to advancing initiatives that safeguard the global environment. Also in 2022, we established a team at
TMNF dedicated to impact investments that harmonize both social and economic value, speciﬁcally targetinginvestments in natural capital. In addition to renewable energy funds and environmental funds, we also committed toinvesting in a new ﬁeld, forest funds, in ﬁscal 2023. Through these endeavors, we are exploring approaches fordisclosing information about natural capital and conducting assessments of the eﬀects (including economic value) on
ecosystems, such as mangrove reforestation. We are also looking into disclosures that align with the guidelines set
forth by the Taskforce on Nature-related Financial Disclosures (TNFD).

Stakeholder dialogue

Supporting the Transition to a Circular Economy
We are engaged in eﬀorts to reduce food waste and promote recycling through insurance. In Japan,
TMNF has formed a consortium to combat food loss with three private companies, collecting data
related to food waste and developing insurance policies to compensate for the costs of foodrecycling. In Southeast Asia, we oﬀer cargo insurance that provides compensation for food productsthat have lost commercial value due to damage to outer packaging in transit with the condition of
donating them. This supports the circular economy by contributing to the promotion of sustainable
practices for still-edible food items.

Guidance andoversight

Implemented employee education and training
Established a hotline (internal reporting channel)

Human Rights Working Group
Issued the Integrated Report and the Sustainability Report
Engaged in dialogue with external experts

Devise and implement initiatives

2
Strategy and Business Platform Supporting Our Purpose Story

Regardless of the era, it is our profound duty to educate and instill awareness in the young minds
destined to shape the future. We have been conducting disaster prevention classes in Japan since2012 to empower children with the essential skills for disaster readiness, with around 77,000
participants as of March 31, 2023. Moreover, we have recently extended comparable initiatives on
a global scale. For instance, in Vietnam, we introduced an educational program addressing theprevention of water-related accidents, a critical social concern. Additionally, at TMNF, we arecommitted to continuing our educational and awareness initiatives for children. This includes
organizing junior internships centered on addressing social challenges for high school students.

Report on
progress

Sustainability Committee
Mitigation measures

Nurturing the Leaders of Tomorrow

070

Steps for Initiatives

Establishment of Policies
In December 2021, we formulated the Tokio Marine Group Basic Policy on Human Rights aligned with
the United Nations Guiding Principles on Business and Human Rights, clarifying our commitment as aGroup to respect human rights across employers, businesses, and the value chain. Additionally, wedeveloped the Responsible Procurement Guidelines as a normative framework towards promoting
responsible procurement and procurement practices throughout the value chain.

Risk Assessment■Development of Human Rights Risk Map
We have identiﬁed the risks related to human rights
issues of key stakeholders relevant to our business.

▶Key Areas of Focus for Each Business Area
Identiﬁed in the Workshop
Business
Areas

Areas of Focus■Human Rights Workshop
In November 2022, a human rights workshop wasorganized and held by members of the Planningand Administrative Section. Taking into accountthe insights of external experts, we conducted anassessment of risks within our business areas(insurance underwriting and investment, value
chain, and Company employees).

Insurance
underwriting
and investment

Insured companies
and individuals as insurance customers
and financing recipients

Value chain

Insurance agents
Foreign technical trainees and workers engaged
in automotive maintenance
The Group s suppliers and service providers

Company
employees

Employees

Impact Evaluation
Based on the results of the workshops, we pinpoint key areas of focus considering the impact and potential risks to our stakeholders and conduct an impact
evaluation. In ﬁscal 2022, we focused on foreign technical trainees engaged in automotive repairs within our value chain. With guidance from external experts,
we conducted interviews to gain a better understanding of the actual situation. Based on the ﬁndings, we will work on addressing the challenges identiﬁed.
071

2 Strategy and Business Platform Supporting Our Purpose Story | Sustainability Management | Information Disclosure Following the TCFD Recommendations
As a founding member of the
Task Force on Climate-related
Financial Disclosures (TCFD),
we will disclose information thatfacilitates investment decisions
and contributes to the spread andpromotion of climate-related
information.

Masaaki Nagamura
Fellow (International Initiatives),
Tokio Marine Holdings TCFD Membership

The only Japanese national to be recognized as the Most Inﬂuential
on Climate Change in the Insurance Industry by Insurance ERM**: A magazine based in the United Kingdom focused on insurance ERM

Category

Page

Governance ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ p.73
Strategies・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ p.74
Risk Management ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ p.84
Metrics and Targets ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ p.85

Taking into account the increasing importance of climate change
mitigation in the international community, in June 2023, we issued
the comprehensive “TCFD Report 2023” outlining our eﬀorts
related to climate change in accordance with the recommendationsof the Task Force on Climate-related Financial Disclosures (TCFD).

Governance
Board of Directors
The Board of Directors recognizes responding to climate change
as a material management issue and assumes the role ofsupervising our sustainability strategy and initiatives. The Board
deliberates on the Groupʼs sustainability policies encompassing
climate action, as well as evaluates and determines mid-term andsingle-year plans. The Board also holds discussions on corporate
strategy on the themes of the management environment andmanagement issues, including climate change countermeasures,
and also fully leverages the insights of outside directors andoutside Audit & Supervisory Board members.

Group Chief Sustainability Oﬃcer (CSUO)
We established the new position of CSUO in April 2021 toaccelerate the promotion of sustainability strategy, including
climate action, across the entire Group. The CSUO, a Director,
oversees the promotion and permeation of the sustainability

strategy, presents related policies to the Board of Directors andthe Management Meeting for discussion, and takes on the role ofreporting the progress to these bodies.

2

Sustainability Committee
We established the Sustainability Committee in April 2021 toaccelerate our sustainability strategy, including climate action,across the entire Group. Chaired by the CSUO and comprisingsuch members as the CEO, chief oﬃcers, and management ofoverseas Group companies, the Sustainability Committee
deliberates on details of our sustainability initiatives and policies

on a global basis and monitors the progress of each initiative.
The committee met four times in ﬁscal 2022 to promote andexecute the sustainability strategy, formulate medium- tolong-term targets (KPIs) related to sustainability, formulate andreview annual plans, and deliberate on other items.

Division Dedicated to Promoting Sustainability
Tokio Marine Holdings has a division dedicated to the promotionof the Groupʼs sustainability including climate action(Sustainability Division, Corporate Planning Department), which

identiﬁes major challenges related to sustainability as well as
formulates and implements related Group-wide strategies, andconducts monitoring.

Strategy and Business Platform Supporting Our Purpose Story

Climate change is a global issue of human-historical proportions that threatens the safety and security of ourcustomers and society. The growing severity of natural disasters directly affects the insurance industry.
Therefore, the Group recognizes that climate change is an extremely important issue to address head on not
only in terms of our core insurance business, but also as a global company and an institutional investor. This
special feature section will convey the Group s initiatives using the categories of governance, strategy, risk
management, and metrics and targets based on the TCFD recommendations.

Climate-related Financial Disclosures
Based on the TCFD Recommendations

Compensation System for Directors and Executive Oﬃcers
In ﬁscal 2022, we started incorporating non-ﬁnancial indicatorsconcerning the tasks on climate action and other key issues
in our sustainability strategy into the performance-linked
compensation for Directors and Executive Oﬃcers. We use theprogress of each task toward our vision as an indicator, and after
performing the ﬁrst assessment of compensation amounts at the
Sustainability Committee, hold a deliberation and give a ﬁnal
decision at the Compensation Committee.

The report can be found on the Tokio Marine Holdings website.

072

073

2 Strategy and Business Platform Supporting Our Purpose Story | Sustainability Management | Information Disclosure Following the TCFD Recommendations▶Changes in Insurance Payments in 2050

Strategies

Intensity (wind speed)

NumberJapan (typhoons)+5％ to +53％

‑30％ to +28％

United States (hurricanes)

0％ to +37％

‑36％ to +30％

Recognition of Risks and Opportunities
risks). Moreover, as demand for insurance in the renewableenergy sector grows, it presents potential opportunities forour business. The following are some examples of risks andopportunities in the Groupʼs business activities.

Acute

Potential for growing frequency and scale oftyphoons, ﬂoods, and other weather events

Chronic

Rising temperatures
Other weather changes, such as droughts and heat waves
Rising sea levels
Impact on arthropod-borne infectious diseases

Policies andregulations

Increase in carbon prices
Strengthening of environment-related regulations and standards
Increase in climate-related legislation

Technology

Technological innovation toward the transition toa decarbonized society

Examples of risks to the Group s business activities●

Changes in the demand for and supply of products
and services

Reputation

Changing customer and societal awareness of initiatives
surrounding the transition to a decarbonized society

Impact on insurance payouts
Impact on business continuity caused by damage to buildings andother facilities at bases

Decreases in the corporate value of portfolio companies and in thevalue of the assets held by the Company due to higher carbon
prices● Inﬂuence in liability insurance payments●

Decreases in the corporate value of portfolio companies that havemissed the transition to a decarbonized society and in the value ofthe assets held by the Company● Decline in revenue due to technological innovation and inability toascertain changes in customer needs●●

Reputational damage due to the Company s eﬀorts being deemed
inadequate

Drastic increase in the need for insurance for renewable energy
projects● Increase in investment and ﬁnancing opportunities on the back ofcompanies increasing funding needs associated with response todecarbonization● Increase in disaster prevention and mitigation needs toward
increasing resilience against disasters

Opportunities●

Resource efficiency,
energy sources,
products and services,markets and resilience

Demand for products and services aligned withchanges in energy sources and designed toincrease resilience; changes in public awarenessAs is described in the “risk management” items below, we identify the “risk of major wind and ﬂood disasters” as a “material risk” that will
have an extremely large impact on our ﬁnancial soundness and business continuity. We believe such risks could increase in frequency andseverity, owing to the eﬀects of climate change.

Scenario Analysis
Scenario analysis is the process of identifying and evaluating thepotential impact of climate change based on certain scenarios.
The Group believes it can be ﬂexible and resilient to these

impacts, as most non-life insurance policies are relatively shortterm and the Groupʼs assets under management are highly liquid
ﬁnancial assets.

(1) Physical Risks
Physical risks are those related to physical impacts of climatechange. Climate change increases the frequency and intensity ofnatural disasters, which could impact claims payments andbusiness continuity. We conduct a scenario analysis of physicalrisks as part of our efforts to identify and assess their impact. The
Group takes part in the United Nations Environment Programme
Finance Initiative (UNEP FI). Using analysis and assessment

074

uncertainties, as described later (see p. 77). In assessing the impact
of climate change, it is also important to evaluate not only weather
phenomena but also the vulnerabilityof society to disasters as well as the extent to which real estateand personal properties will be concentrated in areas exposed tonatural disaster risk in the future and the extent to which their asset
values will increase (in other words, the extent to which asset
concentration will change). The basis for these projections andassessments is indicated in the following pages.

tools developed by UNEP FIʼs climate change impact
assessment project, we have created the following assessment of
the impact of changes in the intensity (wind speed) and numberof tropical cyclones on our insurance payments under the IPCCʼs
Representative Concentration Pathway (RCP) 8.5 scenario
forecast as of 2050.

a. Change in Weather Events
How a weather event will change due to the impact of climatechange and the degree of confidence of such an impact forecast
will vary depending on the type of weather event. Figure 1 shows
the confidence of climate change impact projections by weather
event type. Notably, the confidence in impact projections isgreater for extreme rainfall compared to tropical cyclones, suchas typhoons and hurricanes. However, the impact on extreme
rainfall entails more uncertainty compared to temperature
variations such as extreme heat or extreme cold.
For extreme rainfall and tropical cyclones (typhoons in Japan andhurricanes in the United States), which are two weather events
that considerably affect Tokio Marine Group, we consider the
impact of climate change as follows.

High conﬁdence

Extreamcold

Extreamheat

2Droughts
ExtreamExtremerainfallsnow
Extratropical & ice
cyclones
TropicalSeverecyclonesconvective Wildﬁres
stormsLow conﬁdenceHigh conﬁdence

How well we understand the likely inﬂuence on event types in general

Figure 1: Confidence of impact forecasts of climate change
Source: Created by Tokio Marine Holdings based on material prepared by the U.S. National Oceanic and Atmospheric Administration▶Impact of Climate Change on Heavy Rains
In Japan, the frequency of heavy rains has been on the rise since 1900 (Figure 2). The IPCC Sixth Assessment Report released in August2021 states that heavy rains will become more severe in the future in step with a temperature rise and that for every temperature rise of about
1ºC, the intensity (precipitation) of heavy rains will increase by approximately 7%.

Strategy and Business Platform Supporting Our Purpose Story

Markets●

The Tokio Marine Research Institute, a Group company, began
conducting research in 2007 to evaluate and calculate the impact
on insurance loss of changes in wind disaster risk associated withtyphoons under future climate conditions (impact under the IPCCʼs
RCP4.5 and RCP8.5 scenarios) and changes in flood risk due toincreased rainfall (impact resulting from temperature increases of2°
C and 4°C). Referring to the results of this scenario analysis, we
assess the impact on underwriting of natural disasters resulting
from increasingly severe climate change.
Future projections of climate change scenarios are subject toAbility to detect possible inﬂuenceof climate change on speciﬁc event

Transition risks

Physical risks

Examples of events* The figures above reflect economic losses, assuming the same impact on insurance payments.
* The figures above show the rate of change from current weather conditions (1980‒2000) to those in around 2050.

Days per year with precipitation of 100 mm or more

Tokio Marine Group anticipates an increase in climate-relatedrisks and is identifying and assessing their impact on ouroperations. Climate-related risks include risks related to thephysical impacts of climate change (physical risks) and risks
related to the transition to a decarbonized society (transition

2.5

2

1.5

1

0.5

0

1901 1904 1907 1910 1913 1916 1919 1922 1925 1928 1931 1934 1937 1940 1943 1946 1949 1952 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 2021 Year
Figure 2: Days per year with precipitation of 100 mm or more

Source: Tokio Marine Holdings based on materials from the Japan Meteorological Agency (website)075

2 Strategy and Business Platform Supporting Our Purpose Story | Sustainability Management | Information Disclosure Following the TCFD Recommendations
b. Changes in Vulnerabilities in Society and Asset Exposure

Atmospheric and oceanic large-scale circulations (e.g., El Niño
and monsoons) are closely related to the formation, development,
and movement of tropical cyclones. As climate change affects
each of these factors, the impact of climate change on tropical
cyclones consequently becomes more uncertain. Looking at pasttrends, the IPCC Sixth Assessment Report reported an increasein the number of strong typhoons in Japan. However, thecertainty level is not yet high, and longer-term, higher-quality
observations will be needed to monitor changes in long-term

8

trends (Japan Meteorological Agency).
As for hurricanes making landfall in the United States, eventhough the ratio of intense hurricanes has risen over the past
40 years, a longer-term survey covering the period from 1900
revealed that there is no discernible trend either in the number ofhurricanes or the intensity of those hurricanes (IPCC Sixth
Assessment Report).

All hurricanes

7
6

4
3
2
1
0
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Year4

3

2

100,000
80,00060,00040,00020,00001965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 Year
Figure 5: Areas inundated by floods (ha)Source: Tokio Marine Holdings based on materials from the Ministry of Land, Infrastructure, Transport and Tourism (flood statistics)

changes in weather events themselves, such as heavy rains andtyphoons, as well as societyʼs vulnerabilities to disasters andchanges in asset exposure are essential in predicting damage
due to natural disasters.

▶Change of Vulnerabilities in Society

101900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Year
Figure 3: Number of hurricanes in the United States

Source: Created by Tokio Marine based on Klotzbach et al. 2018**：Philip J. Klotzbach, Steven G. Bowen, Roger Pielke Jr., and Michael Bell, 2018: Continental U.S. hurricane landfall frequency and associated damage. Bull. Amer.
Meteor. Soc., 99, 1359‒1376, https://doi.org/10.1175/BAMS-D-17-0184.1 (© American Meteorological Society. Used with permission.)In the future, while the number of tropical cyclones is expected tolevel off or decrease overall, the ratio of intense tropical cyclones
is forecast to increase. As such, there are both decrease andWind speed(increase)

Change rate (%)

120,000

The amount of damage will vary significantly if there is achange in asset exposure, that is, a change in the degree ofconcentration of assets or in the value of assets in areas exposed
to natural disaster risk. In this way, we recognize that identifying

Major hurricanes

because Japanʼs disaster prevention infrastructure, including
embankments, has improved since the mid-19th century and iseffectively reducing the occurrence of floods during heavy rains.

increase projections for the number of intense tropical cyclones(IPCC Sixth Assessment Report).

Rain rate(increase)

Number of all tropical cyclones(both increase/decrease)

%

%

%

%

+30

+80

+80

+20

+20

+40

+40

+10

+10

0

0

0

0

-40

-40

GlobalTyphoons Hurricanes

GlobalFigure 4: Changes in tropical cyclones due to a temperature change of +2ºC

Typhoons Hurricanes

Globalfuture, making its recommendations for rivers in 2019 and forhigh tides in 2020.
Overseas, efforts to increase resilience throughout society
have also been under way. The United States, for example,
has improved its disaster prevention infrastructure and revisedbuilding codes following huge natural disasters, including
Hurricanes Katrina in 2005, Sandy in 2012, and Irma in 2017.
In keeping with the move toward strengthening resilience inand outside Japan, Tokio Marine Group has been contributing togreater resilience of the entire society by supporting customers
to cope with disasters through the dissemination of disaster
information.

Number of all major cyclones(both increase/decrease)+30

Typhoons Hurricanes

In Japan, revisions to the Building Standards Act have proved todirectly translate into the better resilience of society. In fact,
revisions made in 1981 to the seismic building codes and in2000 to the wind pressure resistance building codes have greatly
contributed to the improved resistance of buildings against
natural disasters. More recently, Typhoon Faxai, which madelandfall in 2019 and caused damage to the roofs of many
houses, has prompted revisions to the standards for roofing on
countermeasures against intense winds that were enacted in
January 2022. In addition, the Ministry of Land, Infrastructure,
Transport and Tourism has announced its policy that the
anticipated intensification of natural disasters should beconsidered in improving disaster prevention infrastructure in the2Strategy and Business Platform Supporting Our Purpose Story

Number of hurricanes on the U.S. mainland5

As shown in Figure 2 on p. 75, the frequency of heavy rains inJapan has been increasing since 1900. Figure 5 below, on theother hand, shows a declining trend for flooded areas. This is
Flooded areas (residential and other land) (ha)▶Impact of Climate Change on Tropical Cyclones

Typhoons Hurricanes

GlobalSource: Created by Tokio Marine Holdings based on Knutson et al. 2020**：Thomas Knutson, Suzana J. Camargo, Johnny C. L. Chan, Kerry Emanuel, Chang-Hoi Ho, James Kossin, Mrutyunjay Mohapatra, Masaki Satoh, Masato Sugi, Kevin Walsh,
and Liguang Wu, 2020: Tropical cyclones and climate change assessment part II: Projected response to anthropogenic warming. Bull. Amer. Meteor. Soc., 101, E303‒E322,
https://doi.org/10.1175/BAMS-D-18-0194.1 © American Meteorological Society.Used with permission.

076

077

2 Strategy and Business Platform Supporting Our Purpose Story | Sustainability Management | Information Disclosure Following the TCFD Recommendations▶Recognition of Changes in Asset Exposure
In Japan, an influx of people into urban areas is expected tocontinue in the future. Over the period from 2015 to 2040, eventhough the number of households in the country is projected to

decline 4.8% on a national average, an increase is expectedin some prefectures, including Tokyo. As such, the trend ofchanges in asset exposure varies from region to region.

The importance of changes in asset accumulation when
considering the damages caused by natural disasters is
a common factor, both domestically and internationally.
While it is known that the economic losses from pasthurricanes have been on the rise in the United States,
250

adjusting for the influence of asset accumulation reveals a
reduced trend of significant changes. This emphasizes thatthe increase in economic losses is largely attributed toasset accumulation.

Adjusted by inﬂation only

200

N

0

400km
National: -4.8%(%)
0 or higher-5 to less than 0-10 to less than -5
Less than -10

Figure 6: Changes in the number of households from 2015 to 2040
Source: National Institute of Population and Social Security Research, “Number of Household Projections for Japan (2017 Estimates)”

Area of extremely high risk
with land development andbuilding restrictions

low

risk

Transport and Tourism has stated that it is important to consider
flood risk reduction when determining the locations of housing
districts and city functions. Accordingly, Tokio Marine Group ismonitoring the policy trends of the national and local governments.

50
01900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015Year

250

Adjusted by inﬂation and exposure

200
150
100
50
0
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015Year
Figure 8: Economic loss due to hurricanes on the U.S. mainland

Source: Created by Tokio Marine based on Klotzbach et al. 2018**：Philip J. Klotzbach, Steven G. Bowen, Roger Pielke Jr., and Michael Bell, 2018: Continental U.S. hurricane landfall frequency and associated damage. Bull. Amer. Meteor.
Soc., 99, 1359‒1376, https://doi.org/10.1175/BAMS-D-17-0184.1 (©American Meteorological Society. Used with permission.)c. Impact on Business Continuity: Promoting Climate Change Adaptation Measures
highArea that currently has risk andwill continue to face residual
risk after measures in terms ofhardware, such as ﬂood
control, are implemented under
the ongoing plan, but is serving
as a base of civic life and isdesirable to remain so in the
future as well

Area that will continue to facesigniﬁcant residual risk after
measures in terms ofhardware, such as ﬂood
control, are implemented,
requiring consideration of
relocation to a safer area with
its population on the decline

Figure 7: Direction of urban development based on the risk of water-related disasters
Source: Tokio Marine Holdings based on materials from the Ministry of Land, Infrastructure, Transport and Tourism (website)

078

100

Area requiring measures tocounter the risk of ﬂood frominland waters in its central
district, where city functions
are to be located

Tokio Marine Group uses multiple scenarios*1 to perform analysis
and evaluation*2 on the impact of climate change risk on ouroperations using holistic and context-specific approaches. By

doing so, we are promoting climate action and initiatives toincrease resilience against disasters.

*1 Including IPCCʼs Shared Socioeconomic Pathway (SSP) 5-8.5, SSP3-7.0, SSP2-3.5, SSP1-2.6, SSP1-9, RCP8.5, RCP6.0, RCP4.5, and RCP2.6 scenarios*2 Climate change risk analysis and evaluation conducted in collaboration with Risilience Limited of the United Kingdom

Area that has high risk oflandslide near a cliﬀ, forwhich the need for relocation
will be examined asnecessary

Area that has relatively low
risk but needs to establish analert and evacuation system
to further increase safety

2Strategy and Business Platform Supporting Our Purpose Story

From the viewpoint of damage due to natural disasters, an
important factor is the exact location of assets (whether within ahazardous area). In response to the frequent occurrence of natural
disasters in recent years, Japanʼs Ministry of Land, Infrastructure,Continental U.S. economic loss from harricanes(USD billion)

150▶Holistic Approach
Based on a holistic approach, we use multiple scenarios toanalyze and evaluate, both quantitatively and qualitatively, theimpact of an increase in weather disasters (such as heavy rains
and floods) on our operations and have been implementing
related measures. On the whole, we have concluded that anincrease in weather disasters will not have a profound impact on
our operations as compared to the manufacturing and otherindustries for a number of reasons. For example, insurance
products represent an intangible service and do not necessarily
require physical sales bases, and their development andproduction involve minor supply chain risks in the procurement of
raw materials.

▶Context-Speciﬁc Approach
Based on a context-specific approach, we use multiple scenarios
to analyze and evaluate, both qualitatively and quantitatively, theimpact of an increase in weather disasters (such as heavy rains
and floods) on our operations and have been promoting
initiatives to protect our own assets from weather disasters,

which are expected to become more severe due to climatechange.
Specifically, we are implementing measures against flood
disasters, such as installing emergency power generators andmore water bars at our major bases.

079

2 Strategy and Business Platform Supporting Our Purpose Story | Sustainability Management | Information Disclosure Following the TCFD Recommendations
Implementation of Climate Change Strategy(2) Transition Risks
Transition risks are risks associated with the transition to a
decarbonized society. As the global momentum toward
decarbonization accelerates and the transition to a decarbonizedsociety progresses, we anticipate more stringent regulations,
technological innovation, asset value fluctuations and changes in
the investment environment as well as in customer needs, which
could affect the Groupʼs businesses.
Transition risks include impact on the corporate value ofinvestee companies and the value of assets held by the Company
due to increased costs associated with GHG emissions resulting
from climate change. To reduce the impact of these factors, weare decreasing total holdings of business-related equities andpromoting engagement with investee companies.
We have estimated the impact of transition risks on assets
under management by Tokio Marine Group (equities, corporate
bonds, commercial mortgage-backed securities (CMBS), andgovernment bonds) using “Aladdin Climate,” a model provided byBlackRock Solutions. With the model, we have quantified theimpact on corporate value due to changes in scenario variables(carbon prices, energy demand, fuel prices, emissions, etc.)
based on scenarios provided by The Network of Central Banksand Supervisors for Greening the Financial System (NGFS). Morespecifically, the quantification of the impact on corporate value
has been conducted by comparing the scenario where current
policies continue to 2050 (NGFSʼs Hot House World‒Current
Policies scenario, assuming limited policy changes and a 3.3°
C
temperature rise at the end of this century) with the following two
scenarios, also of NGFS.
(1) Orderly: Net Zero 2050 (assuming a temperature rise
suppressed to 1.5°
C and net zero CO2 emissions both by 2050)(2) Disorderly: Delayed Transition (assuming a 1.8°
C temperaturerise by 2050 due to delayed policy changes)

The following shows the results of the model-based estimates of transition risks of assets (equities, corporate bonds, CMBS, andgovernment bonds) (impact analysis on asset prices based on scenarios up to 2050) held by Tokio Marine Group as of March 31, 2023.

Transition risks
Orderly

Disorderly

-1.5%

-1.3%

Equities

-7.7%

-5.6%

Corporate bonds

-2.4%

-1.8%

CMBS

-0.0%

-0.2%

Government bonds

-0.0%

-0.4%

* The Aladdin Climate analytics of BlackRock Solutions contained in this report should not be construed as a characterization of the materiality or financial impact of thecorresponding information. The Aladdin Climate analytics include non-financial metrics and involve measurement uncertainties resulting from limitations inherent to the nature of thecorresponding data and the methods used for determining such data.
The Aladdin Climate analytics are not fixed and are likely to change and evolve over time. The Aladdin Climate analytics rely on relatively new analysis methods, and there arelimited peer reviews or comparable data available. BlackRock Solutions does not guarantee and shall not be responsible for the content, accuracy, timeliness, non-infringement, orcompleteness of the Aladdin Climate analytics contained herein or have any liability resulting from the use of the Aladdin Climate analytics in this report or any actions taken inreliance on any information herein.

It should be noted that the model results used by Tokio Marine
Group do not separately calculate the positive effects (market
superiority or business opportunities) generated by technically
implementing climate change mitigation and adaptation measures
as we transition to a low-carbon society. Moreover, we believethat this and other quantification models of climate change are080

Tokio Marine Group assumes the roles of an insurance company,
institutional investor, asset manager, global company, and good
corporate citizen. In every role, we are promoting the creation of asafe, secure, and sustainable future to protect our customers andlocal communities in times of need even 100 years from now. In
the following sections, we describe our initiatives in each role.

a. Initiatives as an Insurance Company (Insurance Products and Services)
Tokio Marine Group engages in the development and provisionof insurance products and services that support the transition toa decarbonized society. As one example, we provide insurance
related to renewable energy. There is momentum toward
decarbonization worldwide and a shift to renewable energy inmajor countries for a more efficient electricity supply. In building
and expanding the use of offshore wind power generation plants,
for example, insurance is indispensable as project financing
will not be extended without insurance. However, offshore
construction work is never easy, and there is also a need toreduce work errors and prepare for typhoons. It thus representsa challenging domain requiring high levels of underwriting andclaims services capabilities.
Tokio Marine Group has acquired GCube Insurance Services, Inc.,a leading company offering insurance to renewable energy
operators. Based on its advanced underwriting and claims
services capabilities, we are driving the more widespread useof renewable energy on a global basis through insurance
underwriting and insurance payments, seamlessly covering
everything from the construction phase to the operational phase
after the launch.
In February 2021, Tokio Marine & Nichido (TMNF), a Group
company, established the company-wide Green Transformation(GX) Task Force to support customersʼ efforts to become carbon
neutral and transition to a decarbonized society and contribute to
the growth and development of the industry.
The Task Force is engaging in the development and provisionof insurance products and solutions that will contribute to themore widespread use of renewable energy, including offshore
wind power and solar power, the spread of storage batteries, andthe promotion of the use of hydrogen. Specific efforts tocontribute to customersʼ transition to a decarbonized society are
multifaceted. They include developing defect warranty insurance
for the liability of contractors constructing offshore wind power
generation plants; undertaking an initiative to support local
communities in achieving decarbonization by utilizing a solar

power purchase agreement (PPA) model; developing insurance
products to help electricity retailers to stabilize their management
and secure a power supply capacity; and providing a service
to support information disclosures based on the TCFD
recommendations.
We believe that engagement on the theme of the environment
with business partners is essential to shift to a decarbonizedsociety and realize carbon neutrality. To date, TMNF has madeengagement and held dialogue with more than 250 companies.
Of these, the company has offered solutions to resolve various
issues to more than 120 companies while leveraging its
expertise.
As one engagement example, TMNF has been holding
dialogue with power plants for which the company has provided
insurance. The company encourages them to consider theenvironment through the adoption of innovative high-efficiency
power generation technologies and carbon dioxide capture,utilization, and storage technologies (CCUS/carbon recycling)that reduce GHG emissions and supports their transition by
providing relevant products and consulting services.
In November 2022, TMNF also launched, jointly with MUFG
Bank, Ltd., a service to support disclosures of climate changerisks and opportunities and other related information inaccordance with the TCFD recommendations as a service
solution to help companies promote GX.

2Strategy and Business Platform Supporting Our Purpose Story

Total(1) Initiatives of Tokio Marine Group

still in the development stage, undergoing upgrades based on thelatest research findings. We thus have no plan, at this point, touse the data in our management decision-making process, butwill continue to carry out research and investigations to explore
more appropriate ways to utilize such quantification modelingmethods.

081

2 Strategy and Business Platform Supporting Our Purpose Story | Sustainability Management | Information Disclosure Following the TCFD Recommendations
b. Initiatives as an Institutional Investor (Investment and Financing)
As a signatory to the United Nations Principles for Responsible
Investment (PRI) through Group companies TMNF and Tokio
Marine Asset Management, we have established a policy
concerning environmental, social, and governance (ESG)
investment and financing, considering not only financial
information but also ESG elements. By incorporatingclimate-related elements into the investment decision-making
process, we are supporting the transition to a decarbonizedsociety.
Specifically, we are undertaking ESG engagement to support
increased corporate value and the sustainable growth of investee
companies through constructive and purposeful dialogue thatconsiders non-financial factors including ESG elements inaddition to their financial data as well as ESG integration where
both financial data and non-financial data are used in theinvestment decision-making process.
In fiscal 2022, TMNF established a team to carry out impact
investment that generates both social and economic value andhas made investment commitments to renewable energy,
environmental, and other funds conducive to countering climatechange. In fiscal 2023, the company committed to investment in a
new field, specifically a forestry fund, to promote the passing downof valuable forest resources to future generations.
As for our ongoing themed investment and financing efforts,such as those related to green bonds and sustainability bonds,
we are also promoting the creation of social and economic value
in new fields. In fiscal 2022, we invested in Japanʼs first blue
bonds to support the investee companiesʼ efforts related toenvironmentally sustainable fishery and aquafarming businesses.
We have also invested in transition bonds issued by gas, iron andsteel, and other companies. In this way, we have been providing
a broad range of support for the realization of a decarbonizedsociety in the investment and financing field.
The total balance of ESG-themed investments and financing,including green bonds, sustainability bonds, and green loans, wasabout 109 billion yen as of March 31, 2023, for TMNF, TMNL,
and NF. In fiscal 2022, TMNF started making impact investments
in funds with measurable social returns, such as renewableenergy funds. Such commitments amounted to approximately
13 billion yen as of March 31, 2023.
We have also begun using data providers to conduct
quantitative analyses of the GHG emissions of our investee
companies.

c. Initiatives as an Asset Manager (Fund Formation)
Performance of renewable energy funds (total as of March 31, 2023)
Amount committed・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・Approx. 62 billion yen
Units installed・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・45
Power generation capacity (DC)・・・・・・・・・・・・・・・・・・・・・・Approx. 280 MW

d. Initiatives as a Global Company (Leading Discussions at International Climate Change Conferences)
As climate change is an important social issue that needs tobe addressed by the entire world, Tokio Marine Group actively
engages in dialogue with international organizations,
governments, industries, academic communities, NPOs, andNGOs.
We have led discussions at international conferences, which
includes co-chairing a climate change‒related working group for
the Geneva Association since 2008. We have also joined the
Associationʼs climate change task force and have been engaging
in the formulation of scenario analysis and stress test guidelines
to perform forward-looking impact assessment of climate change.
In July 2018, TMNF became a founding member of theinsurer pilot group, launched by the United Nations Environment
Programme Finance Initiative (UNEP FI) under the Principles for
Sustainable Insurance (PSI) framework to examine and develop
methodologies and analytical tools for the insurance industry to
make climate-related disclosures based on the TCFD
recommendations. The company has contributed to the
publication of the final report of the UNEP FI pilot project, titled“Insuring the climate transition,” in January 2021.
Tokio Marine Kiln(TMK) and Tokio Marine HCC Internationalfrom Tokio Marine Group have joined ClimateWise, a climatechange‒related international initiative in the insurance industry.
They have been carrying out studies and research on various
risks and opportunities related to climate change jointly with
about 30 leading insurers in the world.

082

TMK is also a member of the Sustainable Markets Initiative,
an insurance industry task force envisioned by the then PrinceCharles of England and established in June 2021.
In Japan, the then Chairman of the Board of Tokio Marine
Holdings worked as one of the founders and contributed to theestablishment of the TCFD Consortium in May 2019. Since theestablishment, Tokio Marine Holdings has been a member of the
Planning Committee to deliberate on the consortiumʼs course ofaction. We have contributed to the creation of the three versionsof the TCFD Guidance released in December 2018, July 2020,
and October 2022, respectively, and “A Guide to Flood Risk
Assessments for Enhanced TCFD Disclosures” released by the
Ministry of Land, Infrastructure, Transport and Tourism in March
2023. We also participate in discussion on effective ways forcompanies to disclose climate-related information and how
to link the disclosed information to appropriate investment
decision-making of financial and other organizations.

disseminate the ideas of an insurance mechanism and risk
management practices in developing countries and regions
particularly vulnerable to the impact of climate change andnatural disasters in accordance with the Sendai Framework for
Disaster Risk Reduction 2015‒2030, which provides new world
guidelines for disaster risk reduction.
Tokio Marine Group is contributing to the creation ofinternational rules and the progress in research on climatechange and natural disaster risks through these initiatives.

e. Initiatives as a Good Corporate Citizen (Social Contribution)
Mangrove forests have an effect on the prevention and mitigationof global warming by absorbing and fixing a significant volumeof CO2. Under the concept of “Insurance for the Future of the
Earth,” TMNF has engaged in the Mangrove Planting Projectsince 1999. As of March 31, 2023, approximately 12,261
hectares of mangrove forest have been planted through thisproject in nine countries, primarily in Asia. In addition to TMNF,
other Group companies are now planting mangroves. We
have also announced the Mangrove-Based Value Co-creation
100-Year Declaration, which aims to create value through theblessings of nature brought by mangroves in collaboration with
forestry NGOs. Under the declaration, we will continue toundertake this project in the future.
In 2022, we launched activities to protect eelgrass beds.
Eelgrass is a type of seagrass, which grows in sandy, shallow
waters with sunlight and gentle waves. It has a high ability toabsorb and fixate CO2 from the atmosphere as well as purify
water. Together with mangroves, we will promote this initiative as
an effort to protect the global environment.
At every age, educating and enlightening children who will leadthe future is a great responsibility adults must assume. Around theworld, Tokio Marine Group is visiting schools to provide Green
Lessons and Disaster Prevention Lessons to children to raise theirenvironmental awareness and disaster preparedness.
With our strong belief that “it is our responsibility to pass on abright future to future generations,” Tokio Marine Holdings has
positioned future generations as its stakeholders in addition tocustomers, society, employees, shareholders, and investors since2021. We will step up our tree planting, education, and otherefforts to pass on a sustainable environment and society to thesefuture generations.

2(2) Policies Concerning Insurance Underwriting as well as Investment and Financing
Our basic policy on climate change is to support the decarbonizationof customers and local communities through insurance products andservices as well as investments and financing through constructive
dialogue with stakeholders. We individually set up a policy on eachtransaction for the areas that could cause significant, negative
impacts on the environment or society.

At the end of September 2020, we published “Tokio Marine:
Our Climate Strategy,” which we revised at the end of September
2021 and the end of September 2022. The following sections
describe our policies concerning insurance underwriting as wellas investment and financing to achieve the goals of the Paris
Agreement.

a. Insurance Underwriting
Tokio Marine Group has not provided new insurance underwriting
capacities to coal-fired power generation projects since
September 2020 or thermal coal mining projects since
September 2021, regardless of whether they are newly
constructed. However, we might grant exceptions after carefulconsideration for projects with innovative technologies andapproaches, such as CCS/CCUS*1 and mixed combustion,
aiming to achieve the goals of the Paris Agreement.

Strategy and Business Platform Supporting Our Purpose Story

Tokio Marine Asset Management has been operating a renewableenergy fund targeting investments in solar power plants since2012, effectively backing initiatives aimed at the transition to a
decarbonized society.

Additionally, through industry-academia collaboration with The
University of Tokyo, Nagoya University, Kyoto University, andTohoku University, we engage in research on climate change
and natural disaster risks in an effort to gain deeper scientificinsight into disaster prevention and mitigation and to raise thesophistication of measuring methods through risk modeling toascertain risk volume in even greater detail. Our efforts in thisarea include development of a stochastic risk assessment
approach. We believe that in addition to providing products
and services in developed countries it is also important toSince September 2022, Tokio Marine Group has also
strengthened its commitment by protecting the environment andsupporting the transition to a decarbonized society by no longer
providing new insurance underwriting capacities to oil and gas
company extraction projects*2 in the Arctic Circle (all areas northof latitude 66°
33, including the Arctic National Wildlife Refuge,
ANWR) and oil sands mining.

*1 Carbon dioxide capture and storage/Carbon dioxide capture, utilization, and storage*2 Exemptions for projects/companies with decarbonization plans that are aligned with the Paris Agreementb. Investment and Financing
With respect to investment and financing, Tokio Marine Groupwill not provide new financing for coal-fired power generation
projects or thermal coal mining projects. However, as with our
insurance underwriting policy, we might grant exceptions after
careful consideration for projects with innovative technologies
and approaches, such as CCS/CCUS and mixed combustion,
aiming to achieve the goals of the Paris Agreement.

In aligning with our insurance underwriting policy, we also nolonger provide new financing for oil and gas extraction projects in
the Arctic Circle and oil sands mining and are stepping up ourefforts to support the protection of the natural environment andtransition to a decarbonized society.

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2 Strategy and Business Platform Supporting Our Purpose Story | Sustainability Management | Information Disclosure Following the TCFD Recommendations
Risk Management

Metrics and Targets

Managing Climate-Related Risk
Based on Enterprise Risk Management (ERM)
Tokio Marine Group conducts enterprise risk management (ERM),
which includes the management of climate risks. Through the
ERM cycle, we comprehensively identify and assess risks, using
both qualitative and quantitative approaches. In the insurance
business, which pursues proﬁt through risk-taking, risk

assessment is the foundation of our business. The Group has
been working for many years to assess material risks (including
those due to natural disasters) both quantitatively andqualitatively. Speciﬁc initiatives are as follows.

physical risks) in the “material risks” category, which we believe
could become more frequent and severe due to the effects ofclimate change. For these material risks, we also formulate
control measures prior to risk emergence and response measures
for after risks occur.

Group utilizes reinsurance to prepare for natural disasters (capital
events) that occur once every few centuries, and we determine
earnings coverage from the standpoint of economic rationality
and take necessary measures.

Acquisition of Knowledge (Industry-Academia Collaboration, etc.)
Tokio Marine Group is deepening collaboration with both insideand outside experts to acquire knowledge about risks. Tokio
Marine Research Institute collaborates with The University ofTokyo, Nagoya University, and Kyoto University, among others, tocarry out impact analysis based on the possibility for increased
insurance losses associated with natural disasters that are●Reduction of GHG emissions
Reducing GHG emissions (CO2) for operations from Tokio Marine Group by 60% (vs. 2015)*3●Renewable electricity use
Using 100% of renewable electricity at Tokio Marine Groupʼs major business facilities●Electrification of company-owned vehicles (TMNF, TMNL, and NF)
Switching all vehicles owned by TMNF, TMNL, and NF to electriﬁed vehicles (EV, PHV, HV, etc.)

becoming more severe in nature. Moreover, Tokio Marine dR anda team of experts in natural disasters working in Atlanta, theUnited States, are leading eﬀorts to upgrade natural disasterrisk management across the entire Group, including various
evaluations of natural disaster risk models.

●Increase in insurance products that will contribute to green transformation (GX)
Increasing income from insurance premiums on GX-related insurance products by around 7 billion yen (TMNF)●Improvement of profitability of fire insurance
Improving profitability of fire insurance by more than 45 billion yen*4 (TMNF)*1: Medium-term targets still under consideration*2: Scope 3, Category 15, based on the GHG Protocol standards*3: Associated with our own business activities (Scope 1 [direct emissions] + Scope 2 [indirect emissions] + Scope 3 [other indirect emissions; Categories 1, 3, 5, and 6] based on the
GHG Protocol standards)
Scope 3 includes categories of importance to the Group for which numerical values can be obtained.
*4: Supposing natural catastrophe claims in an average year

GHG Emission Reduction Record
Achieve Carbon Neutrality in Business Activities●Reduction of GHG (CO2) emissions from Tokio Marine Group operations*5: 80,201 tons (34% reduction vs. fiscal 2015)(Scope 1: 13,362 tons; Scope 2: 41,190 tons; Scope 3*6: 25,649 tons)●Amount of GHG (CO2) fixed and reduced: 93,000 tons
Tokio Marine Group is working to reduce the environmental impact(domestic and international) and become carbon neutral by(1) conserving energy and using energy more eﬃciently, (2)planting mangroves to absorb and ﬁx CO2, (3) using renewableenergy (such as by procuring green electricity), and (4) amortizing

carbon credits. As a result of these eﬀorts, in ﬁscal 2022 weachieved carbon neutrality for the tenth consecutive year (sinceﬁscal 2013) thanks to the absorption and ﬁxation eﬀects ofmangrove planting and the use of carbon credits outperforming theCO2 emissions generated by the Groupʼs overall business activities.

2
Strategy and Business Platform Supporting Our Purpose Story

to properly assess current weather phenomena. Furthermore,
within material risks, we conduct stress tests based on scenarios
in which extreme economic losses are expected and scenarios
where multiple material risks occur at the same time. As for risks
involving major wind and flood disasters, for example, we assume
these scenarios to be on a much larger scale than the major
typhoons that hit the Greater Tokyo Area in 2018 and 2019causing extensive damages. We update scenarios continuously
while taking into account stress tests released by regulatory
authorities of every country, the latest knowledge (including thatof climate change), and recent case studies.

Appropriately Control Risk through Risk Diversiﬁcation and Reinsurance, etc.
Natural disasters are inevitable in Japan, our home market. For
that reason, we have sought to control risk capital by geographic,
business, and product risk diversiﬁcation through M&A overseas.
In addition, reinsurance, as a hedge against risk, is also aneﬀective way to protect our capital and stabilize proﬁts. The●Reduction of GHG emissions
Aiming to reduce GHG (CO2) emissions from Tokio Marine Group to net zero by ﬁscal 2050 for our own operations (including
insurance customers and investment and ﬁnancing recipients)*1,2

Metrics and Targets for Fiscal 2023 (Increase or Improvement vs. Fiscal 2020)(2) Quantitative Risk Management
For material risks, through measuring risk amounts andimplementing stress tests, we are able to perform a multifaceted
review of the adequacy of capital relative to the risks held for the
purpose of maintaining ratings and preventing bankruptcy. We
calculate risk amounts posed by natural disasters using a risk
model (for Japan, a risk model we developed in-house based onengineering theory and the latest knowledge of natural disasters,
and for overseas, models provided by outside vendors). We
independently analyze past tropical cyclones (typhoons in Japanand hurricanes in the United States), torrential rains, and otherchanging trends and incorporate this data as necessary in order

Metrics and Targets for Fiscal 2050

Metrics and Targets for Fiscal 2030

(1) Qualitative Risk Management
We identify all forms of risks comprehensively, including those fornatural disasters such as major storms, and emerging risks due toenvironmental changes. Of these risks, we define risks that will
have an extremely large impact on our financial soundness andbusiness continuity as “material risks.” We include the risk ofmajor wind and flooding disasters (including climate change

While Tokio Marine withdrew from the international initiative, the Net-Zero Insurance Alliance (NZIA), in May 2023, our commitment tocontributing to the transition towards a decarbonized society based on the Paris Agreement remains unchanged.

GHG Emissions for Investment Portfolio
To assess the climate change‒related risks and opportunities of
its investee companies and financing recipients, TMNF has
performed analysis of total GHG emissions and weighted averagecarbon intensity (WACI) on its domestic listed equity and bondportfolios as of March 31, 2022, the disclosure of which isrecommended by the TCFD (see p. 26 of the TCFD Report). We
will continue to urge our investee companies to fully disclose
climate change‒related information and work toward adecarbonized society through engagement, while also making useof this analysis.

*5: Associated with our own business activities (Scope 1 [direct emissions] + Scope 2 [indirect emissions] + Scope 3 [other indirect emissions; Categories 1, 3, 5, and 6] based on the
GHG Protocol standards)*6: Amount of paper used, etc. (Categories 1, 3, 5, and 6)084085