JCCU CO-OP Insurance Business Center

Japanese Consumers' Co-operative UnionANNUAL REPORT Contents

2007

Year Ended March 20,2007

Financial Highlights

1

Message from the Executive Director

2

Topics in fiscal 2006

3

Co-op, JCCU and CO-OP Insurance

5

Payment of Claims and Policy on solicitation

7

Compliance

8International activities and LPA

9Health and Welfare

10

Fiscal 2006 CO-OP Insurance Business Overview

11

Balance sheet

13

Income statement

14

Solvency Margin Ratio and others

15

Structure of CO-OP Insurance Business Center

16

JCCU at a Glance17

The official name of our organization is the Japanese Consumers'
Co-operative Union, commonly abbreviated as JCCU.

Financial Highlights
Millions of
U.S.dollars*2

Millions of yen*1

For the years ended March 20,

2005

2006

2007

Ordinary income¥ 60,409¥ 69,228¥ 77,890(+12.5%)$ 660

Ordinary expenses

25,69029,983

34,830(+16.2%)295

Ordinary surplus

17,51820,36922,008(+8.0%)

186

Net surplus

12,462

14,54915,265(+4.9%)

129

Total assets

57,99773,35787,405(+19.2%)741

Total liabilities

21,61329,07437,087(+38.8%)314

Total capital

36,38344,28250,317(+21.1%)426

Number of policies (total)

5,286,587

5,777,941

6,263,379(+8.4%)―

Number of policies (direct insurance total)

4,896,110

5,381,453

5,861,815(+8.8%)―¥ 6,987¥ 7,690¥ 8,472(+10.2%)

$ 71

808.0

863.9

951.7

(+87.8pt.)―

Changes2007

As of March 20,

Amount insured (direct insurance total)(¥billions/$millions)
Solvency margin (%)

1. Yen Amounts are rounded down to the nearest ¥1 million.
2. U.S. dollar amounts are translated, for convenience only, at ¥117.88 = US$1.00, the rate prevailing on March 20, 2007, and rounded down to thenearest $1 million.

Total Assets

Number of policies

Amount insured(all total)(direct insurance)(¥ millions)(thousand)

90,00087,405(¥ billions)

90,000

7,000

8,472
6,263

80,00080,0005,000
57,99770,000
6,335

4,792

60,000

4,384

4,000

50,00040,000

6,987

5,286

70,00060,0005,843

50,00045,61140,0003,000

34,737

7,690

5,777

6,000

73,35730,00030,0002,000

20,00020,0001,000

10,0000

10,000

03

04

05

06

07

0

03

04

05

06

07

0

03

04

05

06

07

01
Japanese Consumers' Co-operative Union

Message from the Executive Director

Fiscal 2006 was the final year of the 2004-2006 Medium Term Management Plan. During the three years
starting in fiscal 2004, we focused on activities to expand the circle of mutual aid by improving insurance coverage and increasing the number of members the target
being an insurance company chosen as the best within
the sector of life/medical insurance for women and chil-

Meanwhile, the Consumers' Livelihood Co-operative so-dren. As a result, the membership in CO-OP Insurance

ciety Law, which is the law governing CO-OP Insurance,

surpassed 6.26 million at the end of fiscal 2006.

was revised in May 2007 after consideration last year. A

Against the background where society values consum-

variety of revisions was made for the insurance businesser protection, we focused on using the Declaration of Im-

to protect policyholders and ensure health management.

portant Information for consumers to better understandThe environment surrounding the insurance business isimportant matters and precautions before joining. As forexperiencing a time of change. Fiscal 2007 is the firstthe payment of claims, we established the Insurance Pay-

year in the new medium term plan, and we will make all-ment Evaluation Committee to ensure swift, accurate

out efforts to meet the expectations of CO-OP Insurance

payments from the perspective of third parties. In addi-

policyholders, Co-op associate members, and society as

tion, we established a consultation center dedicated toa whole as well.

handling complaints and inquiries regarding CO-OP Insurance, which will improve our products and services as insurance personnel share customer feedback. We also for-We sincerely ask all of you for your continued understanding and support of CO-OP Insurance.

mulated the Insurance Business Tasks and Objectives
for 2015, as well as the 2007-2009 Medium Term Management Plan, in order to set the objectives and plans
for CO-OP Insurance.

Yoshihiko Ito
Executive Director

Visions of CO-OP Insurance
Through CO-OP Insurance and the mutual assistance of CO-OP members, we are aiming toenrich society, promote cooperative activities, develop CO-OP and improve the lifestyles ofmembers based on covering economic loss caused by the various risks in members' lives.
1. We will offer insurance products that suit members' needs with more reasonable premiums
and better coverage.
2. We will promote communication between members and CO-OP employees, and encouragea spirit of mutual aid among members.
3. We will offer members the opportunity to learn about insurance and acquire the ability toselect the insurance that suits them most.
4. We will increase the social credibility of cooperative business by the stable managementof the insurance and the expansion of the insured.
5. We will positively face the problems of aging, health and welfare, and conduct activities tocontribute to society, such as social welfare activities.
02
Japanese Consumers' Co-operative Union

Topics in fiscal 2006

CO-OP Insurance improves products based on member feedback
CO-OP Insurance is developing and improving products based on member feedback. In fiscal 2006, we worked on
product improvement, which was a request from the majority of members. We will continue improving our products
in order to let as many people as possible join the insurance cooperative and to meet member requests.
■ Tasukeai J 18 Course: Hospitalization coverage from the first day!
■ Tasukeai J 18 (J 1,000-yen Course) : Conditional purchase is now available!
■ i.-Plus : Insurance premium is decreased! Coverage for one-day hospitalization is achieved!

CO-OP Insurance reflects policyholder feedback in the business
CO-OP Insurance established the consultation center, which is dedicated to handling complaints and requests regarding participation and claims payments, in March 2006. We had 1,116 complaints and requests from March
2006 to March 2007. Viewing the opinions we received as valuable information for CO-OP Insurance, we use thefeedback to improve our products and business operations.

Collaboration project with "Co-op Welcome! Baby Campaign"
has a good reputation!
JCCU, considering that we play a social role in the recent falling birthrate problem and in the support of raising children through its business and activities, conducted the "Co-op Welcome! Baby Campaign" as the first step startingin the second half of 2006. As an activity in the insurance field, we created a handout tool with an insurance product brochure and booklet titled "What you should know for a happy life for your children" which is a tool for protecting children from accidents.
■ Handout tool "Co-op Welcome! Baby Campaign (envelop package)"■ "What you should know for a happy life for your children"(guidebook for preventing accidents of babies)

We are making every effort to make claims payments topolicyholders as soon as possible.
We continued to make accurate, swift, and sincere payment of claims in fiscal 2006 as well. We made payments
to more than 90% of recipients within two days after we received the claims documents. In addition, we established the Insurance Payment Evaluation Committee to analyze complaints and eliminate incomplete claims requests.
03
Japanese Consumers' Co-operative Union

Topics in fiscal 2006

We visited policyholders in areas having suffered from flood
damage or other disasters to express sympathy and invite
requests for claims payment.
At the time of Heavy Rain of July 2006,
in order to deal with especially big damages in Nagano and Kagoshima, we visited policyholders belonging to Co-op
Nagano, Seikatsu Club Nagano, Co-op
Kagoshima, etc. The number of households we visited amounted to about
850.
We had words of gratitude from manymembers.

Life-planning activities are being conducted nationwide!
■ Our life-planning activities of training sessions on revising lifestyles,
life-planning lectures, and individual consulting are well received.
Among them, the life-planning lectures had 3,354 participants, which is
1.5 times as many as those in fiscal 2005 and individual consulting
had 12,296 visitors.
■ We created the "Things to know before making an insurance contract."
We created the study materials so that consumers can learn about insurance contracts and gain the ability to make sound judgments. The
booklet was advertised through the CO-OP Insurance website to general consumers and is being used at life-planning activities as well.

04
Japanese Consumers' Co-operative UnionCo-op , JCCU and CO-OP Insurance

Co-op is the Largest Consumer Organization in Japan
Co-op was established based on the Consumers' Livelihood Co-operative Society Law, which came into effect in1948. Co-op is an organization wherein Co-op members are free to join or cancel their membership. The organization aims to enhance the everyday lifestyles of members through co-operation. Members paying into the organization make up the organization's principle operations.
Co-ops are comprised of retail Co-ops (regional Co-ops, institutional Co-ops, school teachers' Co-ops and university Co-ops), health Co-ops, insurance Co-ops and housing Co-ops.
These organizations base their operations on close ties to the lifestyle of members and make up Japan's largest
consumer organization.

JCCU is the Association for Co-ops in Japan
JCCU (Japanese Consumers' Co-operative Union) was established when Co-ops united in March 20, 1951 in orderto realize a better lifestyle for its members.
JCCU positions its product supply business and CO-OP Insurance business as its cornerstone operations. For
the product supply business JCCU works to improve and develop CO-OP brand products in order to supply the nationwide network of Member Co-ops with better products. While aligning itself with Member Co-ops, JCCU works toensure the safety of food products from the perspective of consumers.
Furthermore JCCU ensures the rights of consumers and is undertaking environmental and social welfare activities.

Member Co-ops and JCCU are Independent Entities
Member Co-ops and JCCU are both independent entities and conduct operations and management accordingly. While
there are personnel exchanges between Member Co-ops and JCCU, this is by no means an indication of a head-branch
office relationship.

Member Co-ops' Structure of JCCU
Prefectural Unions of Consumer
Co-op Associations

Retail Co-ops

Nationwide Co-op Associations
Health Co-ops
Co-op Associations Conducting
Operations Covering More Than
Two Prefectures
Insurance Co-ops,
Housing Co-ops
Agricultural and Fishery Co-ops

Owning hospitals
and clinics, conducting medical,
health and elderly
welfare activities
Insurance Co-ops:
Offering insurance
business
Housing Co-ops:
Selling of subdivisions and rental
housing business

Regional
Co-opsRegional Co-ops formedby consumers from a
specified area

Institutional
Co-opsCo-ops formed by employees at the same
workplace

School Teachers' Co-ops

Co-ops formed by teachers and school employees at elementary, junior high schools andhigh schools

University
Co-opsCo-ops formed by teachers and students of universities

05
Japanese Consumers' Co-operative UnionCo-op , JCCU and CO-OP Insurance

Insurance Products Uniform throughout Japan
CO-OP Insurance is mainly sold by retail Co-ops. JCCU and Member Co-ops form the CO-OP Insurance Group forjoint operations. CO-OP Insurance offers the same cover across Japan. As of March 20, 2007, 147 Member Co-ops
offered CO-OP Insurance Tasukeai.

Direct and Indirect Insurance Products Offered
CO-OP Insurance offers direct and indirect insurance products. Direct insurance products are offered by JCCU andMember Co-ops approved by the Ministry of Health, Labour and Welfare or local government bodies. CO-OP Insurance direct insurance products are Tasukeai and i.-Plus.
For insurance not covered by direct insurance products, CO-OP Insurance forms alliances with Zenrosai * andproperty and casualty insurance firms to offer indirect insurance products.
CO-OP Fire Insurance and CO-OP Life Insurance i.i. are offered as indirect insurance products.
*ZENROSAI is Japan's largest workers and consumers insurance cooperative organization recognized by the Consumers' Livelihood Co-operative
Society Law. ZENROSAI is a member organization of JCCU. ZENROSAI and JCCU work together to provide a full line-up of CO-OP Insurance.

Types of CO-OP Insurance
CO-OP Insurance Tasukeai― Medical Insurance

CO-OP Insurance i.-Plus― Term Life InsuranceThis insurance provides comprehensive coverage for outpatientcare due to accident, hospitalization, surgery, death, disability,
family members' death of the insured, and damage to residences caused by fire or otherperils. It is designed to meet the Co-op members' demands
for coverage that is essential to their daily lives at a reasonable premium.
There are four plans for women, for children, mainly tocover medical, and uniform medical and death cover. For amonthly premium of ¥100 (about US$1.00), members can
add a special third party liability clause for coverage of up
to ¥100 million.

This insurance simply provides
cover for death, which can be added cancer, hospitalization, andsurgery of the insured. The maximum sum insured is ¥20 million in death benefits for a reasonable premium. Added coverage is available by combining i.-Plus with Tasukeai. The contract term is 10 years andthe premium varies according to the age and sex of the insured. Coverage may be extended until the member
reaches the age of 85 with the ¥20 million plan extendable
up to age 70.

CO-OP Fire Insurance

CO-OP Insurance i.i.
― Life InsuranceThis insurance provides coverageagainst damage to residences
caused by a wide range of perils including fire, lightning, explosion, aircraft or vehicle crashes into residences, windstorm and flood, flooding from a third party residence, unexpected damage from a third party and earthquakes etc.

06
Japanese Consumers' Co-operative Union

Basic plans that mainly cover hospitalization can be matched up withlife cover, women's health cover,child cover and the rebate plan. The
contract term is renewable after five
years with the option of a rebate after the five years. Coverage may be
extended until the member reaches
the age of 80.

Payment of Claims and Policy on solicitation

Payment of Claims
Payment of claims, excluding that for CO-OP Fire Insurance, is made by JCCU via
Member Co-ops or the CO-OP Insurance Center. (Payment of claims for CO-OP
Fire Insurance is made by Zenrosai.) Upon receiving a claim request, we checkthe contract details and ask the policyholder for details about the request andthen send the necessary materials. CO-OP Insurance values swift and efficient payment procedures from the viewpoint of policyholders. For example, basic information is printed on payment claims documents in advance, andsome procedures are simplified depending on the claim details and amount.
CO-OP Insurance shortens the time from the reception of a claims request to payment in order to enhance policyholder satisfaction.
We also established the Insurance Payment Evaluation Committee in June 2006.

Relief Money to Victims of Devastating Disasters
In the CO-OP Insurance plans, Tasukeai, i.-Plus and i.i. policyholders receive Relief Money in accordance with the COOP Insurance Regulations on Devastating Disaster Relief Money. These regulations were made with the aim of providing a token of our sympathy to victims of devastating disasters. JCCU annually allocates money from CO-OP Insurance surpluses to the Devastating Disaster Relief Money Fund in order to make payments in time of a massive
disaster. CO-OP Insurance offers special assistance in accordance with the magnitude of a natural disaster. In theevent of a devastating disaster occurring wherein policyholder are eligible for claim payment and Relief Money,
Member Co-ops across the country cooperate in order to ensure swift and certain payment so that the burden on
policyholder may be alleviated even slightly.

Policy on solicitation
Based on the Law on Sales of Financial Products, JCCU has established the following CO-OP Insurance Solicitation Policy. These guidelines are posted visibly at the JCCU CO-OP Insurance Business Center and at Member Coops handling CO-OP Insurance. CO-OP Insurance sales personnel carry the guidelines in an all out effort to bolster
compliance.

CO-OP Insurance Solicitation Policy
Notification to all members
Based on the Law on Sales of Financial Products, we have established the following CO-OP Insurance Solicitation Policy.
1. When offering CO-OP Insurance, every effort will be made to comply with the Consumers' Livelihood CO-OP Society Law,
the Law on Sales of Financial Products and the Consumer Contract Act to provide services in an appropriate method.
2. When offering CO-OP Insurance, every effort will be made to ensure members fully understand product content and otherimportant information.
3. When offering CO-OP Insurance, every effort will be made to respect the wishes of members, not take up excessive
amounts of members' time or space.
4. When a claim is made, every effort will be made to ensure swift settlement.
5. Recognizing the importance of protection of privacy, contract information will be managed stringently and appropriately.
6. Every effort will be made to gather member opinions and reflect these on future CO-OP Insurance development and in offering CO-OP Insurance.

07
Japanese Consumers' Co-operative Union

Compliance

Risk Management
Risks associated with insurance businesses include asset management risks, office work risks, and system risks.
■ Asset Management Risks
As for asset management risks, in compliance with the Co-op financial regulations and other rules, we have established the Insurance Business Asset Management Committee, and formed the insurance business asset
management regulations and the policy for managing the asset management risks in order to ensure proper
management.
■ Insurance Risks
We manage insurance risks with due consideration of business stability; for example, we pay attention to achieve the proper insurance payment rate when developing and revising products.
■ Office Work Risks and System Risks
We are striving to prevent accidents in clerical tasks as well as in the development and management of systems
by establishing the Behavior Rules to Prevent Serious Accidents and the Information Security Policy.
■ Establishment of Risk Management Department
From January 2007, we have been working on the establishment of the comprehensive risk management system by creating the Risk Management Department.

Compliance■ Payment of Claims and Policy on solicitation
The JCCU CO-OP Insurance Business Center has the CO-OP Insurance Solicitation Policy based on the Law on
Sales of Financial Products.
■ Enhancement of important information declaration● Declaration of Important Information
We have the easy-to-understand Declaration of Important Information,
which is placed on advertisements and other materials so that consumers can correctly understand the contract outline before joining.
● Protection of Personal Information
As for the protection of personal information, we have the Regulations on
Personal Information and analyze risks concerning personal information
protection and prevent accidents. For the details about the Regulations
on Personal Information of the JCCU CO-OP Insurance Business Center,please visit the website of CO-OP Insurance (http://jccu.coop/kyosai).

Business operations based on policyholder feedback■ Opening of the consultation center for handling complaints
CO-OP Insurance, when developing products and paying claims, is making improvements based on policyholder
feedback. In order to receive more feedback and reflect the opinions in our business, we established the consultation center, which is dedicated to handling complaints, opinions, and requests in 2006.
● Complaints we received at the consultation center in 2006
We had 1,116 complaints and requests in fiscal 2006. Viewing the opinions we received as representing thevoice of our policyholders, we are striving to improve the problems.
■ Improvement efforts resulting from complaints and opinions we receive
We have introduced the management system to unify the management of complaints and opinions we receive sothat related departments can share and swiftly resolve any issues. In addition, we report all complaints and opinions to all departments once a week.

08
Japanese Consumers' Co-operative Union

International activities and L P A

International Cooperative and Mutual Insurance Federation (ICMIF)
Throughout the world there are many types of Cooperative Societies (Coops) and mutual insurance institutions. As of July, 2007, 184 organizations from 70 countries were members of the International Cooperativeand Mutual Insurance Federation (ICMIF) of the International Cooperative
Alliance (ICA). In 1922 an insurance committee of the ICA was established paving the way for today's ICMIF. The ICMIF undertakes a range ofactivities for the development of cooperative insurance organizations.
Such activities include surveys, research and development. JCCU became a member of the ICMIF in 1993.
In 1993 JCCU joined the ICMIF, and since 2004 JCCU has had a staff
member working there to provide support. Furthermore, in and after June
2006, Yoshihiko Ito, JCCU Executive Director, has been actively participating in ICMIF management as a member of its Intelligence Committee.
For further information refer to the ICMIF: http://www.icmif.org/

Life-Planning Activities
Life-Planning activities enable Co-op members to learn about money matters intheir lives. In the principle topic of Revising Coverage, members gain the capability to independently select insurance that is really necessary.
As an integral part of Life-Planning activities, JCCU is training members andCo-op staff to be Life-Plan-Advisor (LPA). Participants of LPA courses learn
about life planning, insurance, taxation and finance in comprehensive lectures
held by JCCU in order to become LPA. As of March 20, 2007 there are 1,841
advisors active at Member Co-ops across Japan.
Co-op carries out the following Life-Planning activities:● Lectures on Revising Coverage● Training sessions on revising lifestyles● Life-planning lectures● Individual consulting● Activities for revising lifestyles at home

Developments in Life-Planning Activities
Life-Planning activities have now become firmly established as Co-op activities. In fiscal 2006, more than 39,000
people in total participated in the activities, principally in revision of coverage.

Participants in Life-planning Activities
Number of participants
20,000Fiscal 2006
16,853 16,447

Fiscal 2005

15,00012,296
9,354

10,000
5,891

6,714

5,000

2,290

3,354
1,158

554

0

Lectures

Training
sessions

Life-planning
lectures

Individual
consulting

Workshop
09
Japanese Consumers' Co-operative UnionHealth and Welfare

Health Improvement Activities
A fundamental issue for JCCU activities is the improvement of the healthand welfare of people. From the position of assisting members and policy
holders to improve their health, JCCU has installed automatic blood pressure measuring devices at Co-op stores and offers free health consultations by phone.
Automatic Blood Pressure Measuring Devices Installed
JCCU has installed automatic blood pressure measuring devices atabout 400 Co-op stores throughout Japan. Since managing blood pressure is paramount for preventing all lifestyle-related illness, it is essential
to consistently measure blood pressure from day to day. Members arewelcome to test their blood pressure level while shopping, making the devices very useful for managing their day to day health.
CO-OP Insurance Health Call Center
JCCU offers a free phone consultation service made available to Tasukeai, i.-Plus, and i.i. policyholders.
JCCU contracts specialist counselors including doctors and nurses
from governmental corporation to give advice on health, treatment andcare-giving as well as instruction on which medical facility to use. During
fiscal 2006 the call center fielded 61,709 calls for advice.

Welfare Activities
Since 1996, CO-OP Insurance has been assisting Co-ops all over Japanto carry out their welfare activities through the Co-op Welfare Activity Organization. A variety of activities are carried out including Child-rearing
support, Communication center activities, activities to foster communication through dinners and meal deliveries and activities for helping lifestyles. These activities have led to alliances being formed with other organizations and local government bodies to create regional networks.
In fiscal 2006, JCCU contributed a total of ¥21 million in assistancefor 41 welfare activities of 29 Member Co-ops.

Application by activities

Activities

Amount application

Child-rearing support

18¥10,660,000

Communication center activities

9

2,540,000

Activities to foster communication through dinners and meal deliveries

94,883,000

Other welfare and volunteer activities

5

3,498,230

10Japanese Consumers' Co-operative UnionFiscal 2006 CO-OP Insurance Business Overview
Overview of the financial results of the CO-OP Insurance business is as follows:

End of year policyholders totaled 6,263,379
When broken down by product, Tasukeai policyholders increased 6.8% from the previous year to 5,276,661, i.-Plus policyholders increased 31.8% to 585,154, CO-OP Fire Insurance policyholders increased 2.6% to 343,962 and i.i. policyholders decreased 6.1% to 57,602.

Insurance in force totaled ¥8,472 billion
CO-OP Insurance Group has total policies of ¥8,472 billion of direct insurance in force, an increase of 10.2% on theprevious year. Of this amount, JCCU directly insured policies increased 9.0% to ¥5,657 billion.

Premiums totaled ¥113,746 million
CO-OP Insurance Group has total premiums of ¥113,746 million, an increase of 10.7% on the previous year. Of thisamount, JCCU direct insurance premiums increased 13.1% to ¥73,355 million.

887,317 payments made
CO-OP Insurance Group made a total of 887,317 payments, an increase of 14.3% on the previous year.

¥44,839 million in payments made
CO-OP Insurance Group has made a total of ¥44,839 million in payments for insurance claims, an increase of 12.8%
on the previous year. Of this amount, JCCU claim payments increased 14.3% to ¥28,172 million.
* CO-OP Insurance Group denotes JCCU and 37 Member Co-ops that directly insure CO-OP Insurance. Refer to Page 5, about direct
and indirect insurance.

Asset Management
Fundamental Policy for Asset Management■ JCCU maintains its fundamental policy of safe and efficient management of funds, in accordance with the special characteristics of the funds policy holders left in keeping.
■ Based on the Regulations on Co-op Financial Administration and enforced internal rules corresponding to theRegulations, JCCU places great importance on security when managing assets.
■ JCCU regularly ascertains and manages price fluctuation risk and credit risk concerning asset management. Every effort is made to prevent the unpredicted losses from asset management.
■ JCCU acknowledges the special characteristics of insurance funds and mainly invests in Japanese Government
Bonds and deposits for short-term funds, and mostly bonds with a mixture of stocks and foreign securities in order to improve profitability for long-term funds.
■ In fiscal 2006, based on this fundamental policy, JCCU makes much of safety, and JCCU has created an asset
management structure aiming to secure stable profitability over the medium and long term.

11
Japanese Consumers' Co-operative UnionFiscal 2006 CO-OP Insurance Business Overview
CO-OP Insurance Tasukeai
97
98
99
00
01
02
03
04
05
06
07

CO-OP Insurance i.-Plus

1,751,868
2,055,036
2,354,938
2,770,392
3,271,680
3,576,487
3,869,225
4,166,463
4,567,642
4,937,630
5,276,661

Year ended March 20,
Number of Policies

01
02
03
04
05
06
07

2006

2007

2,474
50,419146,537
244,600
328,468
443,823585,154

Year ended March 20,

2006

2007

4,937,630

5,276,661

Number of Policies

443,823585,154

Amount Insured (¥ billions)¥ 5,941¥ 6,220

Amount Insured (¥ billions)¥ 1,719¥ 2,224

Premium Income (¥ millions)¥ 87,431¥ 940,826

Premium Income (¥ millions)¥ 15,042¥ 19,663

Claims Paid (¥ millions)¥ 36,171¥ 39,660

Claims Paid (¥ millions)¥ 3,514¥ 5,098

2006

2007

CO-OP Fire Insurance
97
98
99
00
01
02
03
04
05
06
07

CO-OP Insurance i.i.
97
98
99
00
01
02
03
04
05
06
07

182,506
205,714
231,811257,248
274,892
292,230
304,699
316,338
326,733
335,092
343,962

Year ended March 20,

43,662
46,392
49,67154,04957,50361,65764,27465,197
63,744
61,39657,602

Year ended March 20,

2006

2007

Number of Policies

335,092

343,962

Number of Policies

61,39657,602Premium Income (¥ millions)¥ 4,924¥ 5,231

Premium Income (¥ millions)¥ 8,841¥ 8,315

Claims Paid (¥ millions)¥ 1,523¥ 1,398

Claims Paid (¥ millions)¥ 8,447¥ 8,194

Investment Assets
Thousands of
U.S.dollars※2

Millions of yen※1

As of March 20,
Cash and deposits
Long-term deposits
Money held in trust※3
Bonds
Equities
Foreign bonds※4
Foreign equities
Other securities※5
OthersTotal

2005¥ 20,776
1,500
5,500
13,156
1,880
1,921
722
6,356
558
¥ 52,369

2006¥ 25,488
1,500
8,000
18,273
2,445
2,421
1,103
7,183
0
¥ 66,4142007¥ 25,512
1,500
9,500
27,140
3,077
2,179
1,158
9,079
0
¥ 79,147

Changes(+ 0.1%)(+ 0.0%)(+18.8%)(+48.5%)(+25.8%)(−10.0%)(+ 4.9%)(+26.3%)―(+19.2%)2007$ 216,423
12,72480,590230,234
26,102
18,484
9,823
77,019―$ 671,420

1. Yen Amounts are rounded down to the nearest ¥1 million.
2. U.S. dollar amounts are translated, for convenience only, at ¥117.88 = US$1.00, the rate prevailing on March 20, 2007, and rounded down to the nearest $1 thousand
3. Money held in trust are transferable warranty deposits.
4. A portion of foreign securities in foreign currencies are hedged.
5. Other securities are consist of investment trusts in which volatilities are suppressed.
12Japanese Consumers' Co-operative Union

Balance sheet
As of March 20,
Thousands of
U.S.dollars*2

Millions of yen*1

Assets

2006

2007

2007

Current assets:
Cash and deposits¥ 24,696¥ 25,266$ 214,336

Securities

30,23535,851

304,131

Account receivables

4,066

3,982

33,780

Advanced payables

921

1,324

11,231Other current assets

86

67

568

Total current assets

60,00566,493564,073

Fixed assets:
Acquisition of assets

95

105

890

Intangible assets

985

1,990

16,881Long-term deposits

1,500

1,500

12,724Long-term securities

10,482

17,029144,460

287

286

2,426

12,271

18,816

159,619

13,352

20,912

177,400¥ 73,357¥ 87,405$ 741,474

Other fixed assets:

Other
Total fixed assets
Total assets

Liabilities and capitals
Liabilities:
Current liabilities:
Reserves for policy contract:
Reserves for claims paid

¥ 4,057¥ 4,639$39,353

Premium receivables

3,353

3,828

32,473

Reserve for premium income

5,773

8,264

70,105945

1,995

16,923

Reserve for risks
Reserve for rebate payment

7,750

11,05393,764

21,87929,781

252,638

Accounts payable

2,748

2,645

22,438

Accrued income taxes

2,694

2,855

24,219Other current liabilities

1,094

1,099

9,323

Total current liabilities

28,41736,382308,635

656

705

5,980

29,07437,087

314,616

Voluntary reserves

29,11334,068289,005

Unappropriated surplus for the period

15,16916,249137,843

Total capitals

44,28250,317426,849¥ 73,357¥ 87,405$ 741,474

Fixed liabilities:
Reserve for employee retirement benefits
Total liabilities
Capitals:

Total liabilities and capitals

1. Yen Amounts are rounded down to the nearest ¥1 million.
2. U.S. dollar amounts are translated, for convenience only, at ¥117.88 = US$1.00, the rate prevailing on March 20, 2007, and rounded down to thenearest $1 thousand.
13
Japanese Consumers' Co-operative Union

Income statement
For the years ended March 20,
Thousands of
U.S.dollars*2

Millions of yen*1

2006

2007

2007

¥ 64,837¥ 73,355$ 622,285

642

668

5,666

Fees and commissions receivables

2,014

2,395

20,317

Reversal of reserves for claim rebate

355

760

6,447

1,380

710

6,023

69,22877,890660,756

209

170

1,442

Claims paid

24,64628,172238,988

Premium paid

674

825

6,998

Insurance paid back

659

1,218

10,332

Transfer to reserve for claim paid

941

581

4,928

3,003

4,016

34,068

60

15

127

29,983

34,830295,469

Other ordinary expenses

19,085

21,222

180,030

Ordinary surplus

20,36922,008

186,698

Other income

187

204

1,730

Other expenses

9

22

186

Extraordinary income (expenses)

0

-16

-135

Transfer to resreve for claim rebate

3,385

4,063

34,467

Surplus before taxes

17,161

18,111

153,639

Corporate and other taxes

2,612

2,846

24,143

Net surplus

14,54915,265

129,496

Net surplus for the year

613

752

6,379

Extraordinary withdraw

6

231

1,959

¥ 15,169¥ 16,249$ 137,843

Ordinary income:Premium income
Insurance receivables

Investment income

Other ordinary income

Ordinary expenses:

Transfer to policy reserve
Investment expenses

Unappropriated surplus for the year

1. Yen Amounts are rounded down to the nearest ¥1 million.
2. U.S. dollar amounts are translated, for convenience only, at ¥117.88 = US$1.00, the rate prevailing on March 20, 2007, and rounded down to thenearest $1 thousand.

14
Japanese Consumers' Co-operative Union

Solvency Margin Ratio and others
Thousands of
U.S.dollars*2

Millions of yen*1

Solvency Margin Ratio

2006

2007

Total solvency margin ①¥ 41,103¥ 48,350

Total risks ②
Solvency margin ratio=①÷(1/2x②)x100

Changes2007¥ 7,247$ 410,162
86,197

9,516

10,161645

863.9%

951.7%+87.8pt

1. Yen Amounts are rounded down to the nearest ¥1 million.
2. U.S. dollar amounts are translated, for convenience only, at ¥117.88 = US$1.00, the rate prevailing on March 20, 2007, and rounded down to thenearest $1 thousand.
3. The above ratio is calculated on the basis of the solvency margin ratio described in the Countermeasures for Individual Issues related to the Protectionof cooperative insurance contractors, which was put together at Consumer's cooperative insurance round-table conference composed of members
from Japan Cooperative Insurance Association Incorporated.
4. The total solvency margin is limited to what can be divided in the CO-OP Insurance enterprise.

Thousands of
U.S.dollars*2

Millions of yen*1

Breakdown of Basic Profit

2006

2007

Basic profit¥ 20,098¥ 22,971

Changes¥ 2,8732007$ 194,867

Investment profit

163

16

-147

135

Mortality profit

19,79922,233

2,427

188,607

Expense profit

135

721

598

6,116

1. Yen Amounts are rounded down to the nearest ¥1 million.
2. U.S. dollar amounts are translated, for convenience only, at ¥117.88 = US$1.00, the rate prevailing on March 20, 2007, and rounded down to thenearest $1 thousand.
3. Definitions are as follows:
Investment profit：Differential between the projected investment return (expected yield) and the actual investment return.
Mortality profit：Differential between the projected insurance payment (expected mortality rate) and actual claims for payment.
Expense profit：Differential between the projected operational expenses (projected operational expense ratio) and actual operational expenses.
4. Basic profit is calculated by excluding capital gain/loss, such as sales gain or loss on marketable securities, and extraordinary gain/loss, such as provision for contingency reserves, from recurring surplus. It is the index that shows the basic period income generated from the mutual aid enterprise.

Thousands of
U.S.dollars*2

Millions of yen*1

Equity Capital Ratio

2006

2007

2007

① Equity capital¥ 44,282¥ 50,317$ 426,849

945

1,995

16,923② Contingency reserves
Revised equity capital【=①＋②】③ Total assets

45,22752,313443,781¥ 73,357¥ 87,405$ 741,474

Equity capital ratio【=①/③】

60.3%

57.5%

Revised equity capital ratio【=(①＋②/③)】

61.6%

59.8%

1. Yen Amounts are rounded down to the nearest ¥1 million.
2. U.S. dollar amounts are translated, for convenience only, at ¥117.88 = US$1.00, the rate prevailing on March 20, 2007, and rounded down to thenearest $1 thousand.
3. Equity capital ratio = Equity capital ÷ Total assets
4. Revised equity capital ratio = Revise equity capital ÷ Total assets

15
Japanese Consumers' Co-operative Union

Structure of CO-OP Insurance Business Center（as of March 20,2007）

Compliancemanagement office

CO-OP Insurance
planning division

Management planningdepartment
CO-OP Insurance
developing department

Business planningdepartment(

Corporate Officer
Planning andbusiness promotion)
CO-OP Insurance
promotion division

East-Japanbusiness promotion
department
West-Japanbusiness promotion
department
LPA promotion
department

Exeecutive Directorof CO-OP Insurance
Business

Accounting
department
CO-OP Insurance
management division

CO-OP Insurance
Business Center

General affairs
department
Management planningdepartment
Claim payment
department １

Corporate Officer
Managementof Insurance(

Claim payment
department 2)

CO-OP Insurance
administrative division

Business operating
department
Contract management
department
Call center

Complaint consulation

Directors' and employees' insurance department
Business administrative group
Directors and employees
Welfare management office

16
Japanese Consumers' Co-operative UnionJCCU at a Glance
Japanese Consumers' Co-operative Union (JCCU)
President : Toshifumi Yamashita
Established : March 20,1951
Member Co-ops : 499 as of March 20,2007
Capital : ￥8.9billion as of March 20,2007
Amount of supply : ￥373.8 billion for fiscal 2006

Details of operations
1．Improvement and development of CO-OP brand products, supplying Member Co-ops with products
2．CO-OP Insurance business, direct sales business, welfare business, travel business etc.
3．Planning and promoting of foodstuff safety, environmental policies, consumer policies etc.
4．Product inspections and quality assurance
5．Business activities for Member Co-ops and support, liaison and organization of member activities
6．Support activities and communication with foreign Co-ops, participation in international meetings
7．Administration of health Co-ops
Fiscal Year : March 21 through March 20 of the following year
Branches : 10 branches nationwide (Hokkaido, Tohoku, Central1,2, Tokai, Kansai1,2, Chugoku andShikoku, Kyushu and Gakkyou), Laboratory, CO･OP Insurance Business center
Subsidiaries：
CO-OP Trade Japan Inc.
CX Inc.
CO-OP Publications Ltd.
I & I Service Inc.
CO-OP Trade America Inc.
CO-OP Clean lnc.
CX Cargo Inc.
CX Infonet Inc.
World Club Inc.
JCCU Corporate Pension Fund
CO-OP Health Insurance Society

Affiliate Company:
National School Supplies Inc.
Research Institution:
Consumers' Co-operative Institute of Japan (CCIJ)

17
Japanese Consumers' Co-operative Union

Japanese Consumers' Co-operative Union
CO-OP Insurance Business Center:
1-5-2 Irifune Urayasu Chiba 279-8588 JAPAN
TEL:+81-47-351-3356
FAX:+81-47-351-5298
http://jccu.coop/kyosai

This annual report uses 100% recycled paper andis printed with soy bean ink.

Printed in japan