Principles of the Next Mid-Term Management Plan

February 15, 2024

Index
New Leadership
Customer-Centric Initiatives (Main initiatives of Sompo Group in response to the 2024 Noto Earthquake)

Executive Summary
Root Causes of Problems
New Governance Structure and Recurrence Prevention Measures (Sompo Japan)

Actions toward “New Sompo Japan”
Ⅰ. Proven Track Record
On Track to Achieve Record High Profit and Capital Efficiency in Sight

Increasing Shareholder Return through Profit Growth
Sompo Group Grew SubstantiallyGroup‘s Resilience Has Improved Steadily
Steadily Increase Customers in the Wellbeing and Nursing Care Businesses for Mid- to Long-Term Growth

Progress in Risk Reduction
Progress in Capital Circulation
Overseas Insurance & Reinsurance Business (1) Overview
Overseas Insurance & Reinsurance Business (2) Measures to Deal with Inflation

Overseas Insurance & Reinsurance Business (3) Productivity Improvement
Overseas Insurance & Reinsurance Business (4) Improving Profitability and Stability

Overseas Insurance & Reinsurance Business (5) Investments
Domestic Business (1) Progress in Improving Underwriting Result in Fire Insurance (Domestic P&C Insurance Business)
Domestic Business (2) Progress in Improving Underwriting Result in Auto Insurance (Domestic P&C Insurance Business)

Domestic Business (3) Productivity Improvement (Domestic P&C and Domestic Life Insurance Businesses)

Domestic Business (4) Growth in Casualty (Domestic P&C Insurance Business)
Domestic Business (5) New Customer Value Creation (Domestic Life Insurance and Nursing Care & Seniors Businesses)

Achievements and Challenges under the Current Mid-Term Management Plan

3
4
5
6
7
8

II. Principles of the Next Mid-term Management Plan
Principles of the Next Mid-Term Management Plan
Major Initiatives in the Next Mid-Term Management Plan (1) New Sompo Japan (Background)
Major Initiatives in the Next Mid-Term Management Plan (1) New Sompo Japan (Overview of SJ-R)
Major Initiatives in the Next Mid-Term Management Plan (1) New Sompo Japan (Accelerated Sale of Strategic Holding Stocks)
Major Initiatives in the Next Mid-Term Management Plan (2) Growth of Overseas Insurance & Reinsurance Business (Overview)
Major Initiatives in the Next Mid-Term Management Plan (2) Growth of Overseas Insurance & Reinsurance Business (Progress in Geographical Expansion)

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

Major Initiatives in the Next Mid-Term Management Plan (3) Wellbeing Initiative (Social Challenges to be Addressed “Three Concerns”)

Major Initiatives in the Next Mid-Term Management Plan (3) Wellbeing Initiative (Overview)

Foundation of Growth (Capital Policy and Human Capital Investment)

Reference (Group-wide)
Stock Price and Valuation
Asset Portfolio – Group Consolidated
ESR
Evaluation by External Stakeholders
Management Indicators, etc.
Reference (Each Business)
Domestic P&C Insurance Business
Details of Root Causes of Problems (Sompo Japan)
Overseas Insurance/Reinsurance Business
Domestic Life Insurance BusinessNursing Care & Seniors Business
Digital Business

29
30
31
32
33
34
35
36
37
39
40
41
42
43

45
46
47
48
49
50

2

New Leadership
Koji Ishikawa

Mikio OkumuraGroup Chief Executive Officer, Director,
President and Representative Executive Officer of Sompo Holdings, Inc.*

We strive to serve
the ever-changing
needs of customers,
satisfy the expectationsof various stakeholders,
including customers,
business partners,
employees,
shareholders andsociety, andthereby enhanceenterprise value.

CEO of Domestic P&C Insurance Business,
Senior Vice President and Executive Officer of Sompo Holdings, Inc.
President and Chief Executive Officer of Sompo Japan Insurance, Inc.

We strive to swiftly rebuild
the business foundationand profit base of Sompo
Japan by adapting tochanges in the external
environment, and becomea “company that thinks
like the customers inevery aspect of business”
with unwavering
determination and all out,
hands-on management.

* As of April 1, 2024

3

Customer-Centric Initiatives (Main initiatives of Sompo Group in response to the 2024 Noto Earthquake)•

In response to the 2024 Noto Earthquake on January 1, Sompo Japan has implemented customer-centric initiatives, including swiftly setting up the disastermanagement headquarters and dispatching employees from other areas to provide support•

Sompo Care, Palantir Japan, and other group companies are doing all they can to support the communities and people affected by the disaster

Sompo Japan’s initiatives

Group-wide initiatives

Swift payment of claims by utilizing digital technologies

Swift response Set up the disastermanagement headquarters
on Jan. 1
 Substantially increased therelevant human resources.

Earthquake damage

Utilization of digitaltechnologies
Operational improvement
by using Palantir’s Foundry

Disaster management headquarters

Sompo Japan × SOMPO Care: Supporting thecommunities and people affected by the disasterFood supply
 Emergency food supply(20,000 units)
 Cooked meal (suitable forseniors) supply to nursing
care facilities in affectedareas (20,000 units)

Caregivers sent overSent caregivers of SOMPO Careto evacuation shelters to
support and care for seniors
affected by the disaster

SOMPO × Palantir: Contributing to keep track ofevacuee information

Contribution in system development
 Participated in efforts with the Digital Agency,
and Disaster Prevention DX Public-Private Co-Creation
Council, etc.
 Developed a system for integrating information on
evacuees and their whereabouts
4

Executive Summary Strengthen the governance structure of Sompo Holdings and Sompo Japan

Reborn In addition to recurrence prevention measures, including tightening of internal control,
implement “SJ-R” initiative during the next Mid-Term Management Plan period torebuild Sompo Japan and achieve sustainable growthProvenTrack
RecordSince the establishment of Sompo Holdings,
Adjusted consolidated profit is likely to grow at a CAGR of +20% and hit a record high in FY2023
Delivered attractive shareholder return (DPS increased by 5 times over the past 10 years) and executed high-quality
growth investment (Endurance, Palantir, etc.)
Sompo Group made progress in scale and diversification driven by high growth of the overseas insurance &reinsurance business
Expanded health support (Insurhealth) and nursing care business (“egaku”) for mid- to long-term growth and pursued
Sompo-ness

 “Increase resilience”, implement “strategies to connect with customers and deliverconnected services”, and fulfill customer needs beyond insurance to achieve capitalefficiency comparable with global peers and double digit level EPS growth
Principles of the
Next Mid-termManagement
Plan The three pillars of growth are (1) “New Sompo Japan”, (2) Overseas growth strategy,and (3) Wellbeing Initiative
 “New Sompo Japan” will correct industry practices, including strategic shareholding, tocontinue delivering “real value” and aim to become resilient and highly capital efficient5Root Causes of Problems•

The root of the recent problems lies in our inability to properly adapt to major changes in the market by overcoming the status quo bias•

Sompo Group will work as one to rebuild Sompo Japan through the implementation of drastic strategies, such as SJ-R, instead of revitalization throughpatchwork measures to prevent recurrence

Major market
changePast
Corporate culture

Population decline

Status quo bias

Low birth rate andpopulation aging

Industry structure
and practices

Increasing frequency ofnatural disasters due toclimate change
Changes in customer
valuesNow onRegain trust
Support the frontline to

Deregulation of
insurance

Adapt to changes

Advances in digitaltechnologies

Customer perspective
and quality

Recentproblems
The details of SJ-R
will be announced
in May 2024

Shift to SJ-R from recurrence
prevention measures
The key is to increase
expertise of employees
through bold humancapital investment

Sustainableenhancementof enterprise
value

6

New Governance Structure and Recurrence Prevention Measures (Sompo Japan)•

Fundamentally resolve the problems with Sompo Japan and industry which came to light as a result of the Bigmotor and price-fixing issues by revamping
governance structure•

Without blindly following conventional practices, develop solutions also by bringing in external insights

New governance structure(1 )Establishment of a structure to strengthen the external perspective(3) Clarify proposal guidelines to the Board or Directors, etc.
(2) Establishment of CxO and incorporate into internal rules to clarify authority and responsibilities (4) Double hatting in HD positions in key areas, etc.

Bigmotor issue

Key point“Regain trust”“Customer-centric”“Quality control”

Change the mindset of executives and develop talent toimprove customer focus
・Newly establish the Culture Change Dept.
・Review the Group code of conduct, etc.

Price-fixing issue

Create an environment for fair competition in commercial insurance
・Set rules that prohibit contact with peers, and underwriting rules, such as in coinsurance
・Review the pace of selling strategic holding stocks
・Review excessive support for the client’s core business that is unrelated to insurance,
etc.

Rebuild a structure focused on operational quality,
comprehensively review and improve the evaluation system
・Newly establish the Quality Management Dept.
・Review the evaluation system of the executives and employees
・Review secondment to agencies
・More focus on quality in agency commission point system, etc.

Establish an appropriate sales framework and underwriting management
framework

Comprehensively review and rebuild the claims service
departments

Establish robust compliance framework for the Antimonopoly Act, etc.

・Redefine mission, ensure independence, and increase headcount・Comprehensive review of the entire operation process, including DRS
and simplified inspection, etc.

・Review sales target/management to remove excessive focus on contracts led by own
company and protecting market share
・Establish a underwriting management framework to propose premiums that arecommensurate with risks, etc.
・Deepen the executives’ and employees’ understanding of the Antimonopoly Act
・Strengthen risk management by improving risk management and internal audit
functions・Clarify the roles of agencies, develop a system that hinders involvement in price setting
and adjustment, etc.

7Actions toward “New Sompo Japan”•

The details of the next Mid-Term Management Plan, including recurrence prevention measures, will be presented in the IR meeting in
May after submitting business improvement plans to FSA to resolve the two problems

Phase 1
Near-termrecurrence
prevention
measuresPhase 2

Permanent
initiative Comprehensive recurrence
prevention measures Business improvement plan

 Abolish simplified inspection
 Increase headcount in the claims
service departments
 Discontinue DRS (referral system ofdamaged and broken down cars to
repair garages)
 Newly establish rules that prohibit
contact with competitors
 Provide training on the
Antimonopoly Act

Phase 3Evolution

Mid- to long-term strategy
toward “New Sompo Japan”

Implement recurrence prevention measuresdescribed in the previous page
*Submission of business improvement plans
to the regulator (tentative schedule)
Feb. 2024: Price-fixing issue
Mar. 2024: Bigmotor issue

Deliver real value to various stakeholders
and develop a business segment that cancontinue to grow*To be published in the IR meetingin may 2024
*An overview is presented in the latter
half of this presentation
8

Ⅰ. Proven Track Record

Ⅰ. Proven Track Record

On Track to Achieve Record High Profit and Capital Efficiency in Sight•

Since the establishment of Sompo Holdings in 2010, adjusted consolidated profit is expected to grow at a CAGR of +20% and adjusted consolidated ROE is expected to improveby 8.4pt•

Continue to work on initiatives to achieve profit growth above peers and capital efficiency comparable to peers in the next Mid-Term Management Plan and beyond

Adjusted consolidated profit and adjusted consolidated ROE*

Adjusted
consolidated
ROE

Improvement by 8.4pt

10% or higher

8.0%

7.9%

8.1%

1.6%

280.0
202.1

Adjusted
Consolidated
profit220.0 225.0

CAGR of +20%

276(¥ bn.)(Fiscal year) 2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2026

2030

(Forecast)（Rough image)(Rough image)* Figures for FY2010-2015 are estimates based on the definition used for FY2016. Figures for FY2021 and FY2022 are normalized.

10

Ⅰ. Proven Track Record

Increasing Shareholder Return through Profit Growth•

Maintained a highly transparent shareholder return policy since FY2014, focusing on steady increase in DPS and share buyback•

As a result, EPS grew at a CAGR of around 30%, while DPS increased for the tenth consecutive year, reaching five times higher
than a decade ago

EPS and DPS growth(Reference) Historical shareholder return
2,000

EPS growth (CAGR)*1+29.3%
Profit growth: +26.7%
Capital policy: +2.6%

1,800
1,600

150.7

1,200

91.5

1,000

Total800
shareholder
600
return
34.7
200
(FY)

0

DPS (¥)

Ten consecutive year of growth,with a fivefold increase overthe past decade：Dividends

1,400

400
(¥ bn.)

DPS*2：Share buyback

Total payout
ratio
Adjusted
consolidated
profit*3 (¥ bn.)

10.0

81.3

65.8
45.6
17.0

56.1

39.1

81.9
33.5

90.0
35.3

101.1 78.0

112.1
25.0

40.4

33.5
35.4

42.2

48.4

54.7

60.7

72.7

87.1

(Plan)

2023

24.7

28.6

32.3

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

60

70

80

90

110

130

150

170

210

260

220%

50%

50%

50%

50%

72%

60%

50%

58%

74%

355

113.6

164.3

183.2

162.7

113.5

150.8

202.1

261.3

152.2

*1 Growth from FY2012 though FY2023 (forecast)*2 Includes FY2023 forecast*3 Figures for FY2013-2015 are estimates based on the definition used for FY2016

99.0

300
(Forecast)

280.0(Forecast)11

Ⅰ. Proven Track Record

Sompo Group Grew Substantially•

Since the launch of Sompo Holdings in FY2010, top-line has achieved +5.0% annual growth•

In particular, during the current mid-term management plan period, top-line growth accelerated to +8.0% per annum, driven by theoverseas insurance and reinsurance business, and the scale expanded significantly

Accelerated top-line growth*1 for the Group as a whole, driven by high growth inoverseas insurance and reinsurance businessIn addition to stable growth in domestic P&C insurance business,overseas insurance and reinsurance business expanded
significantly driven by rate increase

Achieved significant top-line growth in overseas insurance and reinsurance business*2

Scale and global market presence were meaningfully
improved in the current mid-term management plan

CAGR
+15%

（$ mn.）CAGR＋8.0％
CAGR +4.2%¥4.1 tn.

¥3.2 tn.

12,272¥2.8 tn.

13,484

14,3709,354

CAGR +5.0%

FY2010*1 Net written premiums + Life insurance premiums*2 Gross written premiums of SI Commercial

FY2020

FY2023(Forecast)

FY2020

FY2021

FY2022

FY2023(Preliminay
results)12

Ⅰ. Proven Track Record

Group‘s Resilience Has Improved Steadily•

Growth in the overseas insurance and reinsurance business has led to progress in diversifying the group’s business portfolio and improve resilience significantly•

Resilience of each businesses improved, while strengthening the balance sheet of Overseas insurance and reinsurance business for future years in 4th quarter 2023

Group-wide Progress in business and risk diversification

Overseas Decisive action taken in 4Q FY2023*1

Business portfolio concentrated in domestic business

Impact of social inflation,etc.

Decline in profitability due
to severe natural disasters and inflation, etc.

Breakdown of adjusted consolidated profit (FY2010)

PYD adverse impact on loss ratio

Trends of Core Underwriting Profit*2 (¥ bn.)
128.2

Domestic 93%

Domestic P&C 66%

Domestic P&C Rebuilding the profit baseDomestic life
27%

2.1%
FY20201.0%
FY20211.4%

1.6%

FY20223Q FY2023

Overseas 7%

Due to high growth in overseas
insurance/reinsurance business,
Overseas weight is expected to
expand to 60% for FY2023

Strengthened 2019 and prior accident
year reserves in 4Q FY2023(6.4 ppts. of loss ratio impact)*1 SI commercial

102.4 120.1

76.9

9.5

17.0

-12.8
FY2016FY2018-30.8
FY2020

FY2022Rate increase/Strict underwriting*2 Excluding CALI, household earthquakes. The figure of FY2023 is the forecast.

13

Ⅰ. Proven Track Record

Steady Increase of Customers in the Wellbeing and Nursing Care Businesses for Mid- to Long-Term Growth•

Expanded the wellbeing and nursing care businesses to realize “A Theme Park for Security, Health & Wellbeing”•

Launched the “egaku” business which helps improve sustainability and productivity of facilities operated by other companies tosupport as many seniors as possible

Next Mid-Term
Management Plan

FY2023

FY2018“egaku”
launchLaunch ofInsurhealthⓇ
Cumulative sales of 1.5 million
product
FY2017
Launch ofhealth support
1.4 million registered users of service
service
FY2015
Entry into thenursing care
Top ranked in the number of senior care home rooms
business

Wellbeing
Initiative
Full deploymentof “egaku”

Provide integrated
service in
wellbeing andnursing care

14

Ⅰ. Proven Track Record

Progress in Risk Reduction•

Strategic holding stocks was reduced by ¥1.5 trillion since FY2010•

Reduction of interest rate risk has been completed since ultra long bonds were purchased ahead of the schedule amid the uptrend inlong-term interest rates

Strategic holding stocks is likely to be reduced more than planned at the time
Domestic P&C of developing the current Mid-Term Management Plan

Reduction of strategic shareholding (¥ tn.)
(Cumulative total since the establishment of Sompo Holdings)

Cumulative sale of strategic shareholding based on the target set at the time ofdeveloping the current Mid-Term Management Plan (¥50.0 bn. p.a.)

Domestic Life

Reduction of interest rate risk has been completed earlier than planned

Purchase of ultra long bonds (¥ bn.)
(Cumulative total since FY2021)

Interest rate risk (Group total, ¥ bn.)
Duration gap (Year)

1.5

1,035.8
Purchasing target for ultra long bonds at the time of developing the current
Mid-Term Management Plan (Cumulative total of ¥900.0 bn.)

11

2

525.2

176.1

FY2010FY2012FY2014FY2016FY2018FY2020

FY2022End of Mar. 2021

End of Mar. 2022

End of Mar. 2023

End of Mar. 2024

15

Ⅰ. Proven Track Record

Progress in Capital Circulation•

Sompo Holdings allocates capital generated by each business in a balanced manner between shareholder return and growth investments, from the viewpoint of
maximizing capital efficiency and achieving sustainable growth•

The stock price and valuation have risen driven by high return on investment in overseas insurance and digital as well as total payout ratio exceeding the basic return

Capital policy and return on investment since FY2016(¥ bn.)

Overseas
Financing, etc.
400.0
Gains on sale of strategic
holding stocks
295.4

Growthinvestment
1,376.4

Return on investment in Endurance(current SI): 16%*2

Solid track record ofgrowth investment

DigitalInvestment multiple in Palantir stock: 4.1x*3
Adjusted
consolidated
profit1,226.2

Capital increase*

Shareholder
return709.1

Attractive
shareholder return

Total payout ratio at 58%, exceeding the basic
return level (50% of adjusted consolidated
profit)Capital utilization**1 Cumulative total since FY2016, gains on sale of strategic shareholding are on an after tax basis*2 FY2023 forecast*3 After tax basis

16

Ⅰ. Proven Track Record

Overseas Insurance and Reinsurance Business (1) Overview•

Adjusted profit and gross written premiums are expected to exceed the medium-term targets

Combined ratio signifcantly improved and was able to covers the unanticipated effects of inflation while funding the recently
approved overseas strategic initiatives
Adjusted profit
Combined ratio of SI Commercial
Gross written premiums of SI Commercial * 1•

Expect toachieve

Target¥100.0 bn. +TargetCAGR ＋9%

Expect toachieve

Target88％ level($ mn.)

(bn.)

CAGR
＋76%

CAGR
＋15%

(%)

93.3

Peers*3

99.5

163.1
12,272SI Commercial *2

13,484

14,370
94.9

95.1

92.8

92.4

96.4

9,354

61.8

*4

90.1

30.0

FY2020

FY2021

FY2022

FY2023

FY2020

FY2021

FY2022

FY2023

FY2020

FY2021

FY2022

FY2023(Preliminary(Preliminary(Preliminary

results)

results)

results)*1 For the FY2023 forecast, the commercial business within Sompo Sigorta, Sompo Seguros and Asia subsidiaries is included within SI Commercial and represented $889 million of gross premiums written*2 Excl. corporate expense*3 Data provided by S&P IQ Pro. Peer average includes Allianz SE, American International Group, Inc., Arch Capital Group Ltd., Agro Group International Holdings, Ltd., Assicurazioni Generali S.p.A., AXA SA,
AXIS Capital Holdings Limited, Chubb Limited, Everest Re Group, LTD., Markel Corporation, RenaissanceRe Holdings Ltd., SCOR SE, Swiss Re AG, The Hartford Financial Services Group, Inc., The Travelers Companies, Inc.,
W.R. Berkley Corporation, Zurich Insurance Group AG*4 Excludes one-time FY2023 reserve increase which has a related impact of 6.4 ppts. on the loss ratio

17

Ⅰ. Proven Track Record

Overseas Insurance and Reinsurance Business (2) Measures to Deal with Inflation•

Achieved rate increases in excess of loss costs while adjusting premiums retained based on profitability and risk appetite•

As a result, AY loss ratio of overseas insurance and reinsurance business improved steadily despite the inflationary environment

Pricing and Premiums Retained of SI Commercial*1
Price increase

Even in an inflationary environment, AY loss ratio*3 continues to improve

Current mid-term management plan period

Current mid-term management plan period

Premiums retained
Adjust premiums retained
based on profitability
and risk appetite

69%
71%
65%

60%

※2

61.3%
60.1%

67%

58.1%

Increase in premiums
retained as profitability
improved.

57.2%

56.9%

59%

Loss ratio
has steadily improved

54.2%

57%

53.8%

More than
twice theFY2017 level

FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023(Preliminay(Preliminary

results)

results)*1 Pricing : Insurance business excl. AgriSompo Retention : Excl. AgriSompo*2 Incl. the commercial business within SOMPO Sigorta, Sompo Seguros, and Asia subsidiaries which retain lower premium levels (69% if these businesses were not included)*3 AY loss ratio of SI commercial (excl. AgriSompo and Cats/COVID-19)

18

Ⅰ. Proven Track Record

Overseas Insurance and Reinsurance Business (3) Productivity Improvement•

Overseas insurance and reinsurance business maintains a superior expense ratio, even considering inflation impact
and funding global growth initiatives

Expense ratio has remained favorable compared to peer average*1
SI Commercial

31.6%

31.6%

Peers

Current mid-term management plan period

31.3%
30.3%

30.5%

29.6%

30.6%

29.2%

28.5%
26.4%

FY2017FY2018FY2019

24.8%

24.6%

FY2020

FY2021

22.2%

FY2022

Leveraging global scale
to invest in organic
growth in Canada,Continental Europe
and Asia Pacific

FY2023(Preliminary results)* Peer average includes AIG, Arch, AXA, Axis, Chubb, Everest, HannoverRe, Markel, QBE, RenaissanceRe, SCOR, Swiss Re, The Hartford, Travelers, W.R. Berkley, Zurich

19

Ⅰ. Proven Track Record

Overseas Insurance and Reinsurance Business (4) Improving Profitability and Stability•

In addition to improvement of AY loss ratio, natural disaster risk has been appropriately managed and overall exposures continued to be lowered driven by
diversified growth•

As a result, the impact of natural disasters on the combined ratio remained stable despite increased industry losses

A larger, globally diversified portfolio has stabilized the impact of catastrophe losses on the combined ratio($ mn.)Net incurred losses related to overseas natural disasters
Current mid-term management plan period

Loss ratio impact

570

553
464

22.7%
324

293

168
86
6.3%

5.5%

6.7%

6.6%
3.6%

2.4%
FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023(Preliminary
results)20

Ⅰ. Proven Track Record

Overseas Insurance and Reinsurance Business (5) Investments•

Net investment income increased significantly due to an increase in assets under management and higher book yields

Net investment income increased significantly

Assets under management and yields have grown($ mn.)

AuM($ bn.)

Market yield

Book yield *2

5.7%

6.4%

993*1
2.3%

1.4%

2.1%

5.6%
3.8%

1.8%
22.3
19.1

525
15.1

412

17.0

327

FY2020

FY2021

FY2022

FY2023(Preliminary results)*1 Incl. the impact of Conglomerate Premium*2 SI Commercial

FY2020

FY2021

FY2022

FY2023(Preliminary results)

21

Ⅰ. Proven Track Record
Domestic Business (1) Progress in Improving Underwriting Result in Fire Insurance (Domestic P&C Insurance Business)•

Profitability improved steadily following initiatives, including improved pricing through rate revision and high loss ratio countermeasures•

Expected to return to profitability in terms of core underwriting income by the end of next mid-term management plan by strengthening underwriting in
addition to the upcoming rate revision

Core underwriting income in fire insurance increased steadily(¥ bn.)

Return to profitabilityby the end of next mid-term management plan

Increase rates

New action inretail andcommercial

Profitability of personal fire portfolio to improve following a rate increase*

FY2023(Forecast)
FY2026(Roughimage)-6.7

Weight of policies whichstarted in Sep. 2019 or earlier

FY2020Weight of policies which started
in Oct. 2019 to Sep. 2022

Weight of policies which started in
Oct. 2022 or later

Main actions to improve profitability

Rate increase
Profitability improved steadily throughrate increases since FY2019 and high loss
ratio countermeasures, etc.

-95.8
FY2020

Revision based on therevision of the advisory
rate (June 2023)

Personal fire
Improve portfolio in lightof inflation
strict underwriting in oldproperties

Commercial
fire
Utilize Palantir’s
technologies
Restrict underwriting inhigh loss ratio
industries

FY2023(Forecast)*Based on the number of in-force policies (excluding JFHA fire)22

Ⅰ. Proven Track Record
Domestic Business (2) Progress in Improving Underwriting Result in Auto Insurance (Domestic P&C Insurance Business)•

Aim to improve profitability in auto insurance through initiatives, including a rate increase as soon as possible, in spite of the recent rise in the loss ratio•

The rate increase in January 2024 was postponed but mid-term underwriting profit level expects to remain unchanged

E/I loss ratio is expected to stabilize in the medium term through rate increase

Underwriting in FY2024 and beyond (rough image)*1(¥ bn.)

72.1%

Stable trend excluding the COVID-19 effect-11.0

Recent rise due to higher cost of repair

Mid-term underwriting
profit level expects toremain unchanged

Original estimate
Current estimate

-7.0

66.3%
FY2024

Grade system revision

Profitability
improvement

FY2025

FY2026*1 underwriting profit in auto insurance less the impact related to catastrophic loss reserve,(Reference) Outlook for cost of repair and accident rate*2*3

60.3%
Rate increase

54.9%
Temporary decline
due to COVID-19

Detailedrisk
classification(Mid-term outlook)

130
Cost of repair

120

Accident rate

Approx.
+3 to 5%
(YoY)

110
100

Approx.
-1 to 0%90

FY2010FY2015

FY2020

FY2023(Forecast)

80

(YoY)

FY2019FY2020

FY2021

FY2022

FY2023(Forecast)*2 Total for vehicle (excluding natural disasters) and property damage*3 Indexed with FY2019 =100 before the effects of COVID-19 became apparent

23

Ⅰ. Proven Track Record

Domestic Business (3) Productivity Improvement (Domestic P&C and Domestic Life Insurance Businesses)•

The core expense ratio in the domestic P&C insurance business is improving due to agency commission rate adjustment, headcount reduction by utilizing digital technologies, etc.

•

General expenses in the domestic life insurance business were reduced substantially through utilization of digital technologies, centralization of back office operations, HR system
reform, etc.

Domestic P&C

Core expense ratio* improved steadily

Domestic Life

General expenses decreased substantially

35.7%¥64.4 bn.
Business integration, etc.

34.4%

Reduction by 8.5%(including depreciation expenses)

34.4%

33.7%
Agency commission rate adjustment: -0.2pt
Headcount reduction by utilizing digitaltechnologies, etc.: -0.6pt

FY2010

FY2020Further productivity
improvement to absorb
new system depreciation
expensesComprehensive
product revision

Utilization ofdigitaltechnologies

Strengthenorganization
through branch
consolidation

FY2023(Forecast)* Sompo Japan (excluding CALI & household earthquake, new system depreciation expenses)

FY2016

Concentrationof back office
operations atthe HQ¥59.0 bn.

HR system
reform

FY2023(Forecast)24

Ⅰ. Proven Track Record

Domestic Business (4) Growth in Casualty (Domestic P&C Insurance Business)•

Net written premium growth in casualty accelerated driven by market expansion and new riders capturing client needs•

The loss ratio improved as a comparative advantage over peers, primarily due to strengthened underwriting by utilizing Palantir’s
technologies
Loss ratio has remained below those of peers*

NWP growth accelerated due to new riders(¥ bn.)

Sompo Japan

Peer average

Brisk sales of Business Master Plus
due to new Medical Master rider

CAGR
+3.3%

CAGR
+2.5%

64.3%

Steadygrowth

347.5

64.4%

314.8

62.7%
Marketexpansion

271.2

New risks

58.7%

59.3%

High loss ratio countermeasures byutilizing Palantir’s technologies

FY2014FY2014FY2020
FY2020

FY2023
FY2023(Forecast)(Forecast)

中長期
見通し

FY2019FY2020

FY2021

FY2022

Maintain competitive
advantage and improve

Utilize
Palantir’s
technologies

Strictunderwriting

FY2023(Forecast)* Sompo estimates based on the average E/I loss ratio of peers

25

Ⅰ. Proven Track Record

Domestic Business (5) New Customer Value Creation (Domestic Life Insurance and Nursing Care & Seniors Businesses)•

Performance of the domestic life insurance business compares favorably with peers, primarily due to Insurhealth® which helps extend health life expectancy•

In the nursing care & seniors business, started working to become a platformer by focusing on “egaku” in addition to growth as a care provider

Growth of Insurhealth®

Growth and transformation of the Nursing Care & Seniors BusinessBusiness size target by 2030

Insurhealth=Insurance＋Healthcare
Income protection
insurance
Variable insurance

Cancer insurance＋＋

Transform intoa platformer

Cumulative sales
exceeded 1.5 million*2

Get Healthy Challenge Program*1
Solutionsbusiness
Stop Smoking
Challenge Program*1

Total support

Cumulative total of about
13,000 people succeededin the Challenge Program
Hospitalization rate declined by 50%*3“egaku”
launchGrowth as a nursing
care provider

Early detection to postdisease care

10 products/services in total including others

ND
Softwareacquisition

Revenue ¥30.0 bn.
Operating income ¥10.0 bn.

Newfacilities

1.13

M&A

Increasesustainabilityof nursing carein Japan

Productivity
improvement

1.11
No. of policies in force(Indexed with FY2020 end = 1.0)

1.04

Strengthenfoundation

7.0

1.00
1.00
FY2020 end

1.02

1.02

1.01
Himawari LifeFY2021 end

Know-howconsolidation

Entire industry
FY2022 end

1H FY2023 end*1 The benefits of declines in BMI and blood pressure, and smoking cessation since participatingin the Challenge Program are returned to the participants.
*2 Actual at the end of December 2023 was 1.5 million, annual premium of in-force policies of¥107.7 bn (performance evaluation basis)*3 Comparison with participants who did not succeed in the Get Health Challenge Program

Adjusted
profit(¥ bn.)-2.8
FY2016FY2020

FY2023(Forecast)26

Ⅰ. Proven Track Record

Achievements and Challenges under the Current Mid-Term Management Plan•

While record high profit and capital efficiency have been achieved during the current plan period, challenges including the recent problems and changes inthe external environment, have come into light.

•

Sompo Holding will lead the Group in addressing the challenges as a single entity to grow larger under the next Mid-Term Management Plan

Future challenges

Achievements under the current plan*Groupmanagementtargets

Adjusted consolidated profit: ¥280.0 billion
Adjusted consolidated ROE: 10% or higher

Scale &
Diversification

Top line CAGR: +8.0%
Overseas business ratio rose from 15% to 60%

Newcustomervalue creation
Conglomeratepremium

Capitalcirculation

Sompo Japan

Response to changes
in the external

Insurhealth product CAGR: over +10%
ND Software acquisition, “egaku” launch
Impact: ¥18.0 billion (After tax)

Sale of strategic shareholding: About ¥190.0
billionReduction of interest rate risk (purchase of ultra
long bonds): About ¥1.0 trillion
Growth investment, SI capital increase: About¥400.0 billion* Includes FY2023 forecast

environment

Regain trust of customers
Investment in human capital
Rebuild the corporate culture
Rebuild the profit base in light of institutional
fatigue from conventional industry practices
Inflation, low birth rate and population aging,climate change, digital transformation (DX)

Profit growthand capitalefficiency

Increase to global peer level

Profit stability

Increase resilience at theGroup and individual businesslevelsIncrease inconglomeratepremiums

Strategies to connect with customers and deliverconnected services

Groupmanagement

Strengthen the governance structure
Increase sophistication of capital circulation

Push up theadjusted P/Bratio(1x ofhigher)27

II. Principles of the Next Mid-term Management Plan

II. Principles of Next Mid-term Management Plan

Principles of the Next Mid-Term Management Plan•

Aim to “increase resilience” and implement “strategies to connect with customers and deliver connected services” and fulfill customer needs beyond
insurance under the next Mid-Term Management Plan (MTMP)•

Push up the ROE to global peer level and increase sustainability and stability of EPS at double digit level by implementing various measures

Objectives

Scale &
Diversification

RDP
Conglomeratepremium

Connect with customers anddeliver connected services

ROE: Global peer level

EPS growth: Double digit level

Major initiatives

Current MTMP
(FY2021-2023)

Increase resilience

Challenges and changes inenvironment
Customer-centric

Regain trust

QualityMultistakeholder

Institutional fatigue
from industry practices

Rebuild profit
base

Inflation

Low birth rate andpopulation ageing

Climate change

Digitaltransformation

SOMPO P&C Initiative
Growth of Overseas
Insurance and Reinsurance
New Sompo Japan
Business(See pages 30-32)

Wellbeing Initiative(See pages 35-36)(See pages 33-34)

Utilize data and digital technologies

Business foundation
Investment in
human capital

Increase sophisticationof capital circulation

Changecorporate culture29

II. Principles of Next Mid-term Management Plan

Major Initiatives in the Next Mid-Term Management Plan (1) New Sompo Japan (Background)•

In addition to changes in the external environment, institutional fatigue in business management based on conventional industry practices came to light•

Transform into a resilient and highly capital efficient business that delivers real value by implementing “SJ-R” with two pillars of rebuilding the businessfoundation and profit base

Changes in the external environment
Increasing
frequency ofnaturaldisasters

Reinsurance
markethardening

Inflation

Rise in car
accident rateand cost of
repairRestartRevolution

RebornDifficult to grow the business and maintainstable and high profitability throughextension of the previous years’ initiatives
Deliver the right level of profit
by thinking about everythingfrom the customer's point of view

Conventional industry practices
Excessive focus on the top line and market share, excessive support
for the client’s core business and agency, strategic holding stocks, etc.

30II. Principles of Next Mid-term Management Plan

Major Initiatives in the Next Mid-Term Management Plan (1) New Sompo Japan (Overview of SJ-R)•

We will promote the SJ-R’s two pillars of SJ-R that are rebuilding the business foundation and rebuilding profit basewith cross-cutting initiatives of data-driven business management and increase in human capital investment
RestartRebuild business foundation
Corporate
cultureCreate a new vision
Change the core company values

Revolution

RebornRebuild profit basePortfolio

Strengthen financial management/control by segment
Improve quality and increase the number of underwriters

Quality and Strengthen the governance structure
governance Ensure customer-centric business management

Sales

Retail: Tighten pricing and underwriting rules, improve
productivity
Commercial: Clarify underwriting appetite, increase
expertise

Redefine the mission and quality
Claims service Review all operational processes by bringing inexternal insights

IT

Reduce IT costs
Increase profits by utilizing the “MIRAI” system

Cross-cutting initiatives supporting the above efforts
Data-driven
businessmanagement

Strengthen UW data infrastructure by utilizing
Foundry
Establish a monitoring system for detecting signs of
misconduct, operational quality data, etc.

Increase in
human capital
investment

Increase expertise in claims service, sales, IT, and UWStrengthen the ability to attract talent31

II. Principles of Next Mid-term Management Plan
Major Initiatives in the Next Mid-Term Management Plan (1) New Sompo Japan (Accelerated Sale of Strategic Holding Stocks)•

Strategic holding stocks are likely to decrease by 59% at the end of FY2023 (since the establishment of Sompo Holdings, book value
basis)•

Plan to accelerate the pace of sale of strategic holding stocks during the next Mid-Term Management Plan periodPlan to accelerate the sale of strategic holding stocks

Shift to consultative corporate sales through engagement

Reduction target
From FY2023¥50.0 bn. p.a.

FY2021

Increaseengagement(Reduce by ¥150.0 bn. over the
3-year period of the MTMP)

Achieved Actual: ¥50.1 billion



Exporuse target¥70.0 billion p.a.
FY2022 Achieved
FY2022: ¥70.3 billion-2023
FY2023: ¥70.0 billion (forecast)

Next
MTMP
and
beyondFurther
accelerate thepace of sale

20% or less in FY2030:(ratio to adjusted
consolidated net assets)

Ultimately bring
the balance
down to zero

Enhanceenterprisevaluethroughengagement

Improve the process of deciding whether toexercise proxy rights
Revise the agenda review guidelines

Next Mid-Term Management Plan and beyond
 Plan to establish an organization specializing
in engagement
 Increase opportunities of engagement withinvestee companies
 Increase return to Sompo Japan byenhancing enterprise value of investee
companies through communication

Develop high quality talent
Strengthen consultative corporate sales

32II. Principles of Next Mid-term Management Plan

Major Initiatives in the Next Mid-Term Management Plan (2) Growth of Overseas Insurance and Reinsurance Business(Overview)•

Continue to grow adjusted profits annually over next mid term plan at low double digits•

As market pricing moderates, maintain profitability-oriented underwriting discipline in addition to profitable growth throughgeographic expansion

Global expansion focused on growing adjusted profit(¥ bn.)

Adjusted profit

Gross written premiums

Focus on profitable
growth2,244.1

FY 2021 through FY2023

FY 2024 through FY 2026

Rate increases above
loss costs

Rate increases approximate
loss cost trends, maintainmarginIncrease in premiums
retained in line withimproved profitability

Premiums retained based on
profitability and risk appetite

Continued global
geographic expansion

Aim for low
double-digit earnings
growth (Dollar basis)

163.1

FY2023

FY2026(Preliminary results)(Plan)* Total overseas

Strategic Objectives

Significant top-line
growthTop-line growth

Improved profitability

Improve profitability

Increase in net investment income due to higher book value yields

M&A

33

II. Principles of Next Mid-term Management Plan

Major Initiatives in the Next Mid-Term Management Plan (2) Growth of Overseas Insurance andReinsurance Business (Progress in Geographical Expansion)•

Progress in geographical expansion initiatives such as opening branches and hiring underwriting teams in the U.S. (Midwest and West Coast), Canada,Continental Europe, and Singapore•

Aim to expand underwriting income by increasing profitability while taking into account the cost of growth initiatives in the next Mid-Term Management Plan

Established a base in each region and started hiring underwriters (significant progress achieved in 2023)
CanadaOpened a branch forinsurance andreinsurance products

EuropeAdded
senior leadersandhiringunderwriting teams

United States(Midwest and West Coast)

Singapore

Adding teams andopening offices tosupport geographic
expansion

Expandingcommercial operation
by addingwholesale distribution34

II. Principles of Next Mid-term Management Plan
Major Initiatives in the Next Mid-Term Management Plan (3) Wellbeing Initiative (Social Challenges to be Addressed “Three Concerns”)•

Nursing care demand has kept growing with population aging. Japan will enter the “age of nursing care for/by all people” where involvement in nursing careis unavoidable, including potential care recipients/givers•

Social challenges arising from the three concerns related to health, nursing care, and retirement finances are grave and also have a huge negative impact
on the economy“Age of nursing care for/by all people”

Nursing care is inevitable part of the lives of many
people, including care recipients and potential carerecipients/givers

Health concern
Gap between average life expectancy and healthy life
expectancy: About 10 years

Nursing care concern
People requiring
LTC/support

Near 7 million people(Nearly 2.7x the level in 2000)

Caregivers +Potential carerecipients/givers(Aged 50 or over)

32 million people(56% of age group)

Widening labor supply and demand gap in nursing care:
Family carers are decreasing

Retirement finance concern
Households involved in nursing care will
increase substantiallyFund amount required for retirement continues to increase:
Only 10% can support themselves without relying on their children
35II. Principles of Next Mid-term Management Plan

Major Initiatives in the Next Mid-Term Management Plan (3) Wellbeing Initiative (Overview)•

Challenge to solve “Three concerns" in a one-stop solution to realize a society in which customers have a positive view of aging•

Develop services that fulfill customer needs in depth over a long period of time and boost profits by increasing LTV (Life Time Value) of a customer
Path of earnings growth through the Wellbeing Initiative (Profit image)

Increase customer LTV by delivering products/services that connect existing businesses

40 years old

Annualusage
amount50 years old

Expandservices

60 years old

70 years old

80 years old

90 years old

Profitscale

Boost profit byincreasing LTV
Healthcare services

New services

In
depth

Healthcare services

Over a long
periodExtension ofusage period

Nursing
care
services,“egaku”

Nursing care services, “egaku”

Insurhealth

InsurhealthTerm of Use

Insurhealth

Platform (Customer × Action × AI)
Current
MTMP
Grow by expanding new services and strengthening the platform(Expand market place function)

Next MTMP

After the next MTMP

Increase earnings inexisting and related
businesses

Monetize through autonomous
growth of connected ecosystems

36

II. Principles of Next Mid-term Management Plan

Foundation of Growth (Capital Policy and Human Capital Investment)•

Improve capital circulation led by Sompo Holdings, such as by setting the remittance ratio at 100%, continuing to allocate capital to highly capital efficientareas and investing for growth, and actively investing in human capital•

Review the ESR target range in light of the ROE target, and manage capital for investment and shareholder return in a balanced manner

Remittance ratio of
100% in principle

Concentration ofexcess capital to
Sompo Holdings

Capitalallocation by
Sompo
Holdings

Strategic capital
allocation to highly
capital efficient areas

Review the ESR
target range

Disciplined growthinvestment

Stable and attractive
shareholder return

Active investment
in human capital

Profitgeneration

Risk-taking

37

Reference (Group-wide)
Stock Price and Valuation
Asset Portfolio – Group Consolidated
ESR
Evaluation by External Stakeholders
Management Indicators, etc.

Reference

Stock Price and Valuation
Total shareholder return*1
SOMPO

PBR*1 and adjusted consolidated ROE*2
TOPIX

Peer average（Indexed with end-Mar. 2020 = 1）

＋167%

Return from Sompo
outperformed the TOPIX
and peer average

PBR（J-GAAP）

Adj. consolidated ROE

＋14pt

＋153%

Adjusted PBRPBR（J-GAAP）recovered above 1x
Adjusted PBR is prospected to be above 1x
as well by improving ROE, etc.
PBR
（J-GAAP）

1.1x

PBR 1x level＋98%

Adjusted PBR

0.8x

Adj. Consolidated ROE

10% or more
（FY2023 forecast）

9.1%
8.0%

7.6%
6.4%

8.1%

6.4%

4.5%

End of Mar.
2020

End of Mar.
2021

End of Mar.
2022

*1 Calculated by using Bloomberg data, etc.

End of Mar.
2023

End of mar.
2016

End of mar.
2017

End of mar.
2018

*2 Normalized basis

End of mar.
2019

End of mar.
2020

End of mar.
2021

End of mar.
2022

End of mar.
2023

39

Reference

Asset Portfolio – Group Consolidated
Amount of investment assets

Group fixed income assets by rating(as of the end of Dec. 2023, group consolidated basis)(¥ tn.)

6.3%

AAA

5.9%

74.1%

AA

73.7%

10.8%

A

10.2%

3.8%
5.0%

BBB
BB or below

4.1%
6.1%

Others*0.6
Loans

Deposits,

0.5

etc.

Domestic

1.5

Stocks

1.5

Total¥12.8 tn.

Government
bonds
3.2

Domestic
bonds

Investment grade（BBB or above）
95.0％

Investment grade（BBB or above）
93.9％

4.2

Corporate andForeign
Securities

municipal bonds
1.0

4.6

* Others include lands, buildings and stocks of non-consolidated subsidiaries, etc.

End of Mar. 2023

End of Dec. 2023
40

Reference

ESR
Sensitivity analysis of ESR (99.5%VaR)

Trend of ESR (99.5%VaR)*1(as of the end of Dec. 2023)

200% level

270%

Targetrange

Market factors
+5pt

223%

Others＋13pt

242%• Stock price+3pt• Exchange rate
+0pt
• Interest rate, etc. +2pt

200%

• Accumulation of profit+12pt• Risk reduction+5pt• Sale of stocks held at HD+5pt• Reduction of hedged foreign bonds -1pt
• Overseas underwriting risk
-1pt
• Shareholder return, etc.
-5pt

End of Mar. 2023

End of Dec. 2023

Risk reduction initiative (progress against the FY2023 target)

Stock price risk

Reduction of strategic holding stocks¥63.5 bn.／¥70.0 bn.

Interest rate risk

Investment in super long-term bonds¥217.0 bn.／¥300.0 bn.

*1 In accordance with Solvency II

242%

Domestic
30% upstock
price
30% down+3pt

Domestic
50bp upinterest
rate
50bp down-1pt

USinterest
rate

50bp up-2pt

50bp down+2pt

10% JPY
Exchange depreciation
rate
10% JPY
appreciation+2pt(Reference) Market indicators

-5pt

-0pt

-2pt
End of Dec. 2023

(Variance*3)

2,366.39(+18.1%)

Domestic interest rate (30y JGB)

1.66%(+36bp)

US interest rate (10y Treasury)*2

4.57%(+70bp)¥141.83(+6.2%)

Domestic stock price (TOPIX)

Exchange rate (JPY/USD)*2 End of the Sep. 2023, variance is against end of Dec. 2022
*3 Against end of Mar. 2023

41

Reference

Evaluation by External Stakeholders
Major ESG Indices covering Sompo* As of February 1, 2024

Dow Jones Sustainability Indices(Asia Pacific)

FTSE4Good Index series**

FTSE Blossom Japan Index

S&P/JPX Carbon Efficient Index* The inclusion of Sompo Holdings in MSCI indices and the use of MSCI logos, trademarks, service marks, or index names does not mean that MSCI or its affiliates
sponsors, recommends, or promotes Sompo Holdings. MSCI indices are the exclusive property of MSCI and the names and logos are trademarks or service marks of
MSCI or its affiliates.

42ReferenceManagement Indicators, etc.
Management indicators

Definition of adjusted profit*1(¥ bn.)

3Q FY2023
ActualDomestic P&C insurance

FY2023
Variance

75.0

Domestic P&C insurance（Forecast）

+54.2

58.0

Net income+ Provisions for catastrophic loss reserve, etc. (after tax)
+ Provisions for reserve for price fluctuation (after tax)
‒ Gains/losses on sales of securities and impairment
losses on securities (after tax)

Overseas insurance

Overseas insurance

128.6

+80.9

168.0

Domestic life insurance

29.9

+21.0

40.0

Nursing care & seniors

5.6

+1.3

7.0

Digital, etc.

3.3

+1.5

3.0

242.6

+159.1

280.0

-

-

10％+

Total (Adjusted consolidated profit)

Adjusted consolidated ROE*3

Operating Income*2
Equity-method affiliates are in principle included as net
incomeDomestic life insurance
Net income+ Provision of contingency reserve (after tax)
+ Provision of reserve for price fluctuation (after tax)
+ Adjustment of underwriting reserve (after tax)
+ Deferral of acquisition costs (after tax)
‒ Depreciation of acquisition costs (after tax)
- Gains/losses on sales of securities and impairment
losses on securities (after tax)

Nursing care & seniors

Others

Net income
Digital

ROE（J-GAAP）

-

-

14.6%

Net income- Gains/losses and impairment losses on investment(after tax)

*1 Adjusted profit for each business excludes one-time factors and special factors such as subsidiary dividends, etc.
*2 Operating income excluding one-time factors（= Net income - Net foreign exchange gains/losses - Net realized and unrealized gains/losses - Net impairment losses recognized in earnings, etc.）*3 Adjusted consolidated ROE = Adjusted consolidated profit / Adjusted consolidated net assets (The denominator is the average balance at the end/start of each fiscal year.)
Adjusted consolidated net assets = Consolidated net assets (excluding life insurance subsidiary’s net assets) + Catastrophic loss reserve, etc., in domestic P&C insurance (after tax) + Reserve for price fluctuation in domestic P&C insurance (after tax) + Domestic life
insurance adjusted net assets
Domestic life insurance adjusted net assets = Net assets (J-GAAP) + Contingency reserve (after tax) + Reserve for price fluctuation (after tax) + Adjustment of underwriting reserve (after tax) + Non-depreciated acquisition cost (after tax)

43

Reference (Each Business)Reference

Domestic P&C Insurance Business••

Adjusted profit for FY2023 is expected to be ¥58 billion, taking into account deterioration in business environment, including an increase in claims paid
due to inflation and an increase in the frequency of servere natural catastrophes
NWP which contributes to future earnings improvement is expected to exceed the Mid-Term Management Plan target, primarily due to improved pricing infire insurance and sales espansion in casualty insurance

Adjusted profit
Target

Net written premium*¥150.0 bn. +TargetExpect toachieve

CAGR approx. ＋1.5%(¥ bn.)(¥ bn.)

E/I combined ratio*
Target

91.7％

(%)

CAGR
+1.8%
100.9
2,014.7

157.4
130.1

99.7

2,008.1

1,941.7
1,903.4

94.3

58.0

93.5

32.0

FY2020

FY2021

FY2022

FY2023(Forecast)

FY2020

FY2021

FY2022

FY2023(Forecast)

FY2020

FY2021

FY2022

FY2023(Forecast)* Sompo Japan (excluding CALI & household earthquake)45

Reference

Details of Root Causes of Problems (Sompo Japan)•

The root causes of the recent problems are corporate culture of Sompo Holdings and Sompo Japan, and industry structure and practices•

Proactively implement measures to prevent recurrence as soon as possible, and also work with the industry and relevant ministries/agencies to eliminate
harmful practices

Corporate culture
The following corporate culture existed within Sompo Japan

A corporate culture of prioritizing to the company’s own interest,
company sales and profits, and disrespecting customer
protection and compliance

A top-down corporate culture, where no one challenged thePresident’s decisions



A corporate culture where negative information, in particular, is
not escalated to the executives, etc. in a timely and appropriatemannerIndustry structure/practices
The levels of strategic holding stocks and support for the client’s corebusiness are major determinants of commercial insurance
transaction share
Conflicts of interest at auto insurance agents as an insurance agent
and an auto repair shop

Conflicts of interest at commercial insurance agents as insurance
agents and affiliates of the policyholder

This corporate culture had an adverse effect on the perception,
mindset, and values of the executives and employees, resulting in a
deficient governance and internal control structure

Conflicts of interest and structural issues were left unresolved
due to lack of adequate rules and training, etc.

Rebuild the company's corporate culture by returning to the view ofconsidering everything from the customer's perspective

Re-examine industry practices and conventional wisdom, andreform the structure that causes problems
46

Reference

Overseas Insurance/Reinsurance Business•

Adjusted profit and gross written premiums are expected to exceed the medium-term targets

Combined ratio signifcantly improved and was able to covers the unanticipated effects of inflation while funding the recently
approved overseas strategic initiatives
Adjusted profit
Combined ratio of SI Commercial
Gross written premiums of SI Commercial * 1•

Expect toachieve

Target¥100.0 bn. +TargetCAGR ＋9%

Expect toachieve

Target88％ level($ mn.)

(bn.)

CAGR
＋76%

CAGR
＋15%

(%)

93.3

Peers*3

99.5

163.1
12,272SI Commercial *2

13,484

14,370
94.9

95.1

92.8

92.4

96.4

9,354

61.8

*4

90.1

30.0

FY2020

FY2021

FY2022

FY2023

FY2020

FY2021

FY2022

FY2023

FY2020

FY2021

FY2022

FY2023(Preliminary(Preliminary(Preliminary

results)

results)

results)*1 For the FY2023 forecast, the commercial business within Sompo Sigorta, Sompo Seguros and Asia subsidiaries is included within SI Commercial and represented $889 million of gross premiums written*2 Excl. corporate expense*3 Data provided by S&P IQ Pro. Peer average includes Allianz SE, American International Group, Inc., Arch Capital Group Ltd., Agro Group International Holdings, Ltd., Assicurazioni Generali S.p.A., AXA SA,
AXIS Capital Holdings Limited, Chubb Limited, Everest Re Group, LTD., Markel Corporation, RenaissanceRe Holdings Ltd., SCOR SE, Swiss Re AG, The Hartford Financial Services Group, Inc., The Travelers Companies, Inc.,
W.R. Berkley Corporation, Zurich Insurance Group AG*4 Excludes one-time FY2023 reserve increase which has a related impact of 6.4 ppts. on the loss ratio

47

Reference

Domestic Life Insurance Business
Adjusted profit for FY2023 is expected to be ¥40.0 billion, in line with the Mid-Term Management Plan (MTMP) target, primarily due
to the elimination of adverse impact of COVID-19
Annual premium of new policies(performance evaluation basis)
Adjusted profit
General expenses•

Target¥40.0 bn. +Expect toachieve(¥ bn.)

Target¥50.0 billion
CAGR+15.5%(¥ bn.)
Decline due to one-off factor(COVID-19 effect: - ¥22.0 bn.)¥59.0 billion or less(¥ bn.)

46.0

40.0
32.5

TargetExpect toachieve

33.6

35.6

57.9

36.1

60.2

60.9

59.0

29.8
3Q actual
29.9

3Q actual
28.3

3Q actual
41.0

17.8

FY2020

FY2021

FY2022

FY2023

61%

68%

74%

78%

FY2020

FY2021

FY2022

FY2023(Forecast)(Forecast)

FY2020

FY2021

FY2022

FY2023(Forecast)

Ratio of Insurhealth48

Reference

Nursing Care & Seniors Business•

Sales for FY2023 is likely to exceed the Mid-Term Management Plan target partly due to the acquisition of ND
Software.

Adjusted profit
TargetSales

Occupancy rate

Target¥8.0 bn. +¥162.0 billion

Expect toachieve

Target93.8%

Expect toachieve(¥ bn.)(¥ bn.)CAGR+11%
Includes the effect of ND Software
acquisition (+ ¥1.6 bn.)

7.3

Includes the effect of ND Software
acquisition (+ ¥20.6 bn)

1,772

7.0

5.9

5.9

93.8%

131.8

136.1

149.8

3Q actual
92.3%

93.2%

91.1%
3Q actual

3Q actual

5.6

130.7

89.4%
FY2020

FY2021

FY2022

FY2023(Forecast)

FY2020

FY2021

FY2022

FY2023(Forecast)

FY2020 end

FY2021 end

FY2022 end

FY2023 end(Forecast)49

Reference

Digital Business•

Both sales and profit are expected to increase sharply and outperform the forecast in FY2023, following a turn to profitability in terms of ordinary income
in FY2022.

•

Work to further expand the digital business and contribute to the Group's profit and social value

Sales*

Ordinary profit*(¥ bn.)(¥ bn.)

Main initiatives in FY2023
Palantir Technologies Japan
Strengthen sales• Developed distribution network through business
partners (Fujitsu Limited) in addition to directchannel and strengthened sales and support

Expect to exceed
the forecast

18.4

Increase customers

16.5
Expect to exceed
the forecast

10.2• The number of customers increased by approx.
50% YoY by introducing pay-per-use software
licensing and expanding sales

SOMPO AUX

2.3
1.5

Strengthen distributors
•
•

-0.0
FY2021

FY2022

FY2023(Forecast)

FY2021* the total for SOMPO Light Vortex, SOMPO AUX, Palantir Technologies Japan, and ABEJA

FY2022

FY2023(Forecast)

The total number of vehicles handled annually, including sales anddismantling, is approx. 50,000 in total
As an auctioneer handling unrepairable vehicles, grew to become
one of the largest operators in Japan with more than 200,000
buyers.

Expansion of suppliers• Began sourcing unrepairable vehicles fromdealers, lessors, etc. and outside the Groupin addition to SJ and SAFIC

50

Note Regarding Forward-looking Statements
Forecasts included in this document are based on currently available information and certain
assumptions that we consider reasonable at this point in time. Actual results may differ
materially from those projected herein depending on various factors.

Contacts

Investor Relations Department
Telephone :E-Mail:URL:+81-3-3349-3913
ir@sompo-hd.com
https://www.sompo-hd.com/en/