CHAPTER 02

Top Message

TOP
MESSAGE

Try & Discover for
Creation of Shared Value

We will steadily advancethe Group Long-Term Vision
toward improving capitalefficiency, which is the mostsignificant issue of the GroupWe will achieve creation of shared value by pursuing both
expansion of Group revenue through improved capital efficiency(financial value) and resolution of social issues throughour business (social value).

Hirohisa Uehara
Representative Director and President

Business activities
Creation ofshared value

CapitalQ1 Assessment of the first year of the Group Long-Term Vision
Q2 Stock priceQ3 Group capital management going forward

Corporate governanceQ4 Group-wide business portfolio management in practiceQ5 Initiatives to expand human capital
Q6 Strategic policy of the Group Long-Term Vision

T&D Holdings |16| Integrated Report 2022

T&D Holdings |17| Integrated Report 2022

Working toward the T&D
Insurance Group’s Vision
for Society

Try & Discover for
Creation of
Shared Value

Further Advancementof Capital and Risk
Management

Corporate
Governance

T&D Insurance Group’s
Business

Supplementary Materials
and Corporate Data

Top Message

Q1	How do you assess the previous fiscal year, which was the first year of
the Group Long-Term Vision?
The Group Long-Term Vision identifies the improvementof capital efficiency as the most significant issue. The
basis of the Group’s capital improvement strategy is toimprove capital efficiency by allocating stable profits generated from the Group’s core domestic life insurance business to growth sectors. On the other hand, for businesses
with low capital efficiency, it’s necessary to either shore up
the business or withdraw the capital allocated to it.
Looking back on fiscal 2021, first of all, in our core
domestic life insurance business, we were able to achieve
better sales results than before the COVID-19 pandemic by promoting and establishing sales activities thatcombined face-to-face and non-face-to-face sales amid
major changes in the business environment due to thepandemic. I have a renewed sense of the strength of thebusiness models of our life insurance companies and feelthat we’re responding appropriately to changes in thebusiness environment.
The Group considers the closed book business to be
our growing sector, and in March 2022, we decided tomake an additional growth-focused investment in Fortitude, a company we’re investing in. This additional investment utilizes internal funds from the Group’s life insurancecompanies, Taiyo Life and Daido Life, thereby making
effective use of Group capital.
In addition, we conducted a reinsurance transaction of

Taiyo Life’s negative-spread annuities (“Taiyo Life’s reinsurance*”), which had been a drag on earnings for many
years. In terms of financial accounting, there was a wide
range of opinion within the Company about the fact wewould incur a large loss in the first year due to that reinsurance. However, we in top management decided to proceed with the transaction based on the judgment that theconditions were favorable from an economic value-based
perspective, and that recovering the capital allocated to
the negative-spread annuities was essential from the viewpoint of improving capital efficiency.
In other areas where capital efficiency is low, such as interest rate risk and strategic shareholdings, we’re steadily
reducing risks as planned.
On top of the main examples raised above, in the firstyear of the Group Long-Term Vision, I believe we wereable to steadily implement measures to improve capitalefficiency, including the re-establishment of Group-widemeasures to improve the profitability of T&D Financial
Life, which has been a matter of concern.
In addition, to show that our current stock price isundervalued and that management is serious about
improving capital efficiency, we have implemented sharebuybacks of ¥40 billion, our largest ever.

our future financial accounting-based profits, but in thefirst year of the policy the financial accounting is actuallynegative due to the payment of sales commissions and soforth. Life insurance policies are for very long periods oftime, so there’s no immediate benefit to the bottom line,
but the accumulation of the value of new business will
steadily contribute to financial accounting-based profits.
I would like to use our investor relations (IR) materials
and other channels to better explain how the acquisitionof the value of new business will contribute to financial

accounting-based profits and facilitate a better understanding by the market.
The second point is our Group capital management.
We have not always been able to communicate effectively
enough with the market about our capital strategy, andour approach is said to be “hard to understand” fromthe market’s point of view, which was also mentioned byanalysts at our IR meeting in May this year. This is a point
we need to reflect on and improve as soon as possible.

Trend of TSR
150
140

TOPIX
(insurance
sector)
137

130
120
110

T&D
109

100

TOPIX
102

90
*An insurance policy that a life insurance company enters into with a reinsurance underwriter tospread the risk of insurance policies it has underwritten.

March 31, 2021

June 30, 2021

September 30, 2021

December 31, 2021

March 31, 2022

Q2	While the Group Long-Term Vision is making steady progress, this does not appear to be
fully reflected in the stock price. What’s your view on this point?
There is a sense of uncertainty about earnings, whichcomes from the factors such as the COVID-19 pandemic
and rising currency hedging costs caused by changes in
the financial environment and monetary policy changes
in Europe and the United States in particular. Comparedto the solidity of our business portfolio to date, I am far
from satisfied with the current level of our stock price. For
that I apologize to all of our shareholders and investors. I
feel that the measures to improve capital efficiency that I
explained earlier have been well received by the market toa certain extent, but there are two major points that I think
are still insufficiently explained to the market and where
we have been unable to demonstrate our results.
The first point is that our financial accounting-based

T&D Holdings |profit growth is small compared to economic value-based
indicators such as Market Consistent EV (MCEV) andvalue of new business. On this point, I believe that ultimately, we have no choice but to earn recognition fromthe market by accumulating a track record of financial
accounting-based profit growth. However, we do notintend to pursue short-term profit just because financial
accounting-based profit is important. As in the case of the
Taiyo Life’s reinsurance, which I mentioned earlier, even if
it’s negative in terms of immediate profit, if we can expect
a positive result from a medium- to long-term perspective, then we plan to continue to implement it going forward. We place particular importance on the value of new
business. The acquisition of new policies is the source of18| Integrated Report 2022

June 30, 2022
Source: Bloomberg* As of July 31, 2022
* Total Shareholder Return (TSR): Profitability after reinvestment of dividends before tax* Indexed with March 31, 2021 as 100

Q3 How will the Company strengthen Group capital management?
	Some in the market are suggesting that the Company should consider more aggressive
shareholder returns.
The nature of the life insurance business, which promisescustomers protection over the very long term, means thatsoundness is critical. For this reason, from the outside ourcapital strategy may appear to be conservative. However,
now that the Group Long-Term Vision calls for improving
capital efficiency, the Group’s attitude toward capitalefficiency is undergoing major changes. This is evidenced
by the ¥40 billion share buybacks that the Company
conducted last year, which is at a scale that we previously
would not have been able to carry out.
The two points that, at present, we have not adequately

T&D Holdings |explained to the market are: (1) our approach to required
capital and internal reserves in life insurance subsidiaries,and (2) our approach mainly to handling hybrid capital in
our internal models. First, with regard to (1), we’re goingto take a look at the situation in the next two or three
years, with an eye on developments in the introductionof economic value-based solvency regulations scheduled
for 2025, but we would like to strengthen our quantitative explanation. Meanwhile, with regard to (2), we plan
to reach a decision ahead of schedule and provide a full
explanation at IR meetings and other forums.

19| Integrated Report 2022

Working toward the T&D
Insurance Group’s Vision
for Society

Try & Discover for
Creation of
Shared Value

Further Advancementof Capital and Risk
Management

Corporate
Governance

T&D Insurance Group’s
Business

Supplementary Materials
and Corporate Data

Top Message

we believe that share buybacks are an effective meansof demonstrating management’s intentions with respect
to the stock price. However, I want to be clear that ourcapital strategy is not based on shareholder returns. Depending on the situation, growth investments and internal reserves may be prioritized over dividend increases
and share buybacks, and we ask for your understanding
in this regard.

With respect to shareholder returns, our policy is tostrengthen them. We plan to increase cash dividends forthe eighth consecutive fiscal year, and we will continue toaim for consistent and sustainable dividend increases in
the future. With respect to share buybacks, we will implement them strategically while keeping an eye on our
financial position and other factors. We understand that
our current stock price is significantly undervalued, andWe need to be more responsive to outside opinions
and conscious of what we want to convey
and what we want others to understandQ4	In concrete terms, how does the Group-wide business portfolio management workin practice?
We will also promote drastic reforms in our businesses
with low ROE. In the Group Long-Term Vision, we haveindicated the level of ROE for each operating company inorder to ensure that each company is fully accountable tothe market while making clear the circumstances it faces.
As for TDF in particular, competition in the independent insurance agent market is fierce, and profits havecontinued to be low for a long time. Although TDF does
not currently have sufficient in-force policies to cover its
costs, sales of TDF’s insurance products have been strong
over the past two to three years. In addition to increasing
the number of in-force policies by expanding the top line,
we will improve profitability by promoting cost containment measures through the sharing of Group functions.
Through these efforts, we will raise the ROE to around 5%
by fiscal 2025.
As for T&D Asset Management, profitability has been
declining since the financial crisis. However, starting withthe transfer of the Group’s alternative asset management
functions to TDAM in the previous fiscal year, we are
sophisticating the Group’s asset management functions
thereby contributing to the Group’s asset management.
Regarding Pet & Family, we will establish new productsales and promote web channels to expand policies inforce and improve profitability while expanding alliances with other industries with the pet insurance businessas a hub in order to contribute to the expansion of theGroup’s customer base.
For these businesses with low ROE, the path for improving capital efficiency has become clearer compared
to last May, when the Group Long-Term Vision wasannounced, and we have raised the assumed level ofadjusted ROE for fiscal 2025, the final year of the Group
Long-Term Vision. However, further reforms are neededto achieve this goal.

Broadly speaking, there are two perspectives: existing businesses and new businesses. We consider the appropriateness of the Group’s current business portfolio as a whole,taking a comprehensive view of how to enhance existing
businesses and what new businesses should be explored.
As for our existing businesses, firstly we should consider how to make the domestic life insurance businessrobust. In the COVID-19 pandemic, by establishing sales
methods that combined face-to-face and non-face-toface sales, we were able to strengthen our sales capabilities and achieve efficiency. From this point on, we willcontinue to further expand our contact with customers
through the use of DX and other means. Although it’s
inevitable that the Japanese life insurance market as awhole will shrink due to population decline, we’re working
to increase the number of policies in force by providing
products that meet new insurance needs and developing
new sales channels. In fact, we’re currently seeing strong
growth in insurance policies through Taiyo Life’s directchannel and Daido Life’s financial institutions channel, so I
feel that this is working.
The closed book business continues to be a growtharea, and although the competitive environment when
acquiring closed books is challenging, we’re confident
about future growth. In Japan, with the introduction of
economic value-based solvency regulations in fiscal 2025,
in terms of business and financial strategies, we expect
to see an increase in transactions that utilize reinsurance
and similar methods, as has been the case in Europe andthe United States. At that point, we plan to capitalize on
the economic benefits of the growth of Fortitude, thecompany we’re currently investing in, as well as the strategic benefits of taking a leading position in the Japaneseclosed book market by leveraging the know-how accumulated through our investments.

T&D Holdings |20| Integrated Report 2022

as we move forward

We are currently discussing the Group’s business portfolio at the Board of Directors. For the businesses with
low ROE, we receive harsh opinions from investors asking
for more strict measures such as restructuring and sellingthem. If there’s no improvement in the ROE, it will ultimately be necessary to consider all options with nothing
off the table. In doing so, we will judge not only capitalefficiency, but also synergies within the Group and thereason why the business needs to be in the Group.
New businesses are not necessarily profitable in the
short term, and we will continue to sow seeds in new
fields through repeated trial and error with a view to

T&D Holdings |future growth. In our Corporate Venture Capital (CVC)
initiative launched this fiscal year, we will co-create businesses with startups that have advanced technologies
and business models in areas such as healthcare. We will
also push ahead with the building of our digital customer
platform by utilizing digital tools such as social networks
and apps to establish contacts with customer segmentsthat have not been fully accessible through the Group’s
existing channels and by establishing a new company (AllRight) to provide new products and services.

21| Integrated Report 2022

Working toward the T&D
Insurance Group’s Vision
for Society

Try & Discover for
Creation of
Shared Value

Further Advancementof Capital and Risk
Management

Corporate
Governance

T&D Insurance Group’s
Business

Supplementary Materials
and Corporate Data

Top Message

Q5	The market is increasingly interested in human capital. What plans does the Company havefor expanding human capital going forward?
Employees are the most important and powerful driving
force for a company to create sustainable value. In orderto sustainably increase corporate value amidst a rapidlychanging business environment, it’s essential to create
value through the growth of human resources. In termsof management direction as well, employees should beviewed in terms of human capital, not human resources.
Unlike manufacturers, our Group does not make products; it’s all about people, and human capital is a very
important factor. Therefore, this fiscal year, we will work toenhance and raise the level of our human capital.
In fiscal 2021, we promoted individual specific measures
under the banner of “integrated Group management.”
However, although each of these measures is good individually, when it comes to the development and growthof our people, which are our foundation, and increasing
the depth of our human capital, we have fallen short.
To address this, we will first develop and get an overview of the human resources portfolio necessary to realize
the Group Long-Term Vision, and then work to identify
and close the gap with the current situation.
One is to secure and develop specialized human re-sources. As we continue to advance the diversificationand optimization of business portfolio, we need people
with advanced expertise, knowledge, and skills in businessareas that are not traditionally associated with the life
insurance business. For this reason, T&D Holdings is taking
the lead in strengthening reskilling and recurrent educationin the Group. In addition, we will continue to develop ourhuman resource systems in order to bring in specialized
human resources from outside the Company.
The second is to expand the range of human resources that contribute to Group management. As a publicly
listed company, we’re promoting “integrated Groupmanagement” with the markets in mind, but securing
the human resources for this is an urgent task. First andforemost, we’re considering the dynamic allocation ofhuman resources within the Group in order to increase
the opportunities for employees with a strong sense ofGroup management to play an active role. In addition,
we hope that each of them will acquire the ability to think
about the management of the Group from a broad perspective through the reskilling and recurrent education I
mentioned earlier.

Q6	How will the Company instill the strategic policy of the Group Long-Term Vision
within the Group?
Starting this fiscal year, to communicate the Group’s direction and initiatives to employees within the Group, weare strengthening our IR activities within the Group under an initiative we decided to call “Group IR” to reflect
the fact that the term “IR” sounds like the phrase “there
is love” in Japanese. The impetus for strengthening IR
activities within the Group came from the feeling that the20th anniversary of our founding in 2024 would be a good
opportunity to take a fresh look at our origins as a publicly listed corporate Group.
As an example of a specific activity, starting in April
we set up opportunities to interact with Group company
managers in a small meeting format of about 6 to 10 people at a time, with HD executives, including myself, taking
turns as speakers.
At the meetings, we explain the purpose of the GroupT&D Holdings |Furthermore, along with each quarter’s financial results, we summarize market opinions obtained through IR
activities and other Group issues and distribute them ina newsletter format, thereby ensuring the timely deliveryof market opinions within the Group. These measures are

not one-offs; by continuing to implement them every year,
we hope to foster group awareness and instill market
discipline at a deeper level.

In conclusion
Following the COVID-19 pandemic, changes in the current environment have come at a dizzying pace, including
the Russia-Ukraine crisis, rising interest rates, and inflation, making it extremely difficult to predict the future. As
previously unthinkable events become reality, we musttake a holistic view of how they will affect our Group andsociety, and brace ourselves for “accelerating history.”
In doing so, what we will rely on is the Group Long-Term
Vision. In the era of VUCA, where the future is uncertain,
so long as we have a clear vision of our goals as a Group,
we can move forward without getting lost, even if thepath is steep.
For our part, we will make fiscal 2022 a year to further
solidify the Group Long-Term Vision, and we will stubbornly
proceed with a series of measures to realize the vision, recognizing that this will be in the best interest of all stakeholders,
including customers, shareholders, and employees.
Last but not least, we recognize the importance of communication with the market, and we will utilize the feedback we receive from the market more effectively in ourmanagement. Thank you for your continued support.

management integration and our vision as outlined in theGroup Long-Term Vision, with particular emphasis on how
the market views our Group. I focus on some of the toughopinions received from investors and analysts in an effort
to share market opinions within the Group in the interestsof strengthening market discipline. We are also holding
small meetings with a mix of Group companies with theaim of strengthening communication among them.
In addition, we distribute a video of the “Group IR”
briefing session to all Group employees to convey the
direction of the Group to every corner of the Group.
In the briefing we also introduce the employee stock
ownership plan and encourage employees to use it as ameans to build assets. I also hope that revitalization of theemployee stock ownership plan will increase employees’
awareness of our stock price.

22| Integrated Report 2022

T&D Holdings |23| Integrated Report 2022

Working toward the T&D
Insurance Group’s Vision
for SocietyGroup Long-Term Vision “Try & Discover 2025”

Corporate
GovernanceGroup adjusted profit was 39.2 billion yen, a significant
decrease from fiscal 2020. However, this was due to atemporary loss that accompanied Taiyo Life’s reinsurance,as part of efforts to improve capital efficiency. Excluding
this impact, Group adjusted profit for fiscal 2021 was 116.0
billion yen, a significant increase from fiscal 2020. There
was also steady progress in the Group KPIs in fiscal 2021.

Sow happiness,make changewith boldness.

Financial KPIs

Group Growth Strategy

Financial KPIs

Primary Theme I

Financial Value

Strengthening ofcore business

Expand Group revenue
by improving capitalefficiency

Primary Theme II

FY2023Plan

Non-financial KPIs

Social Value
Address social issues
through our business

Diversification andoptimization ofbusiness portfolio

Primary Theme III

Further advancement of ERM(Upgrading capital management)

Primary Theme IV

Promotingintegrated Groupmanagement

Primary Theme V

Financial Value
Expand Group revenue
by improving capitalefficiency

Group adjusted profit*1¥77.9 billion

Value of new business*2(¥38.7 billion)[+ ¥38.0 billion]*4¥106.0 billion¥130.0 billion

7.6%

8.0%

(3.1%)[+2.0%]*4¥143.4 billion¥166.9 billion+ ¥23.5 billion¥168.0 billion¥200.0 billion

25.4%

7.0%

(18.4%)

6.5%

7.5%

ROEV*3*1 Group adjusted profit = net income +/- valuation gains/losses caused by discrepancy of accounting treatment of assets and liabilities + additional internal
reserves in excess of the legal standard requirements.
*2 Value of new business does not include value of new policies expected to be obtained in the future. Additionally, for converted policies, only the net increase
portion from conversion is included.
*3 ROEV is based on figure excluding temporary valuation gains/losses, etc. related to Fortitude.
*4 Figures indicated in square brackets are excluding the impact related to Taiyo Life's reinsurance (news release dated March 31, 2022).

Initial targets and recent estimates for adjusted ROE
Targets for FY2025 (at the time of announcement in May 2021)

May 2022 estimates (FY2022-FY2025)

Business content

Adjusted ROE
0.0%

8.0%

Group consolidation
Household insurance business (Taiyo Life)
SME insurance business (Daido Life)
Independent insurance agent insurance
business (T&D Financial Life)
New business investment (TDUC)
Asset management business (TDAM)
Pet insurance business (P&F Insurance)

7.0%

Category

Evaluation topic

Target levelNon-financial KPIs

Social Value

Customer
Customersatisfaction

Address social issues
through our business

Employee
Employeesatisfaction

CO2 emission| Integrated Report 2022

¥39.2 billion(¥116.0 billion)*4

FY2025 target(Announced in
May 2021)

Forecast for
FY2022

2.7%

Society24

Year-on-yearchange(7.8%)*4

5.8%

Adjusted ROE

SDGs management
and creationof value

FY2022Plan

T&D Holdings |G ro up L o ng - Ter m V i s i o n ( V i s i o n f o r 20 2 5 )Group KPIs

Supplementary Materials
and Corporate Data

By steadily implementing the measures in the Group
Long-Term Vision, each company’s estimated adjusted
ROE for fiscal 2025 has improved from the time of the formulation of the Group Long-Term Vision, and the Groupaims to achieve its consolidated adjusted ROE target of
8.0% or higher for fiscal 2025 ahead of schedule.

Fiscal year ended Fiscal year ended
March 31, 2021
March 31, 2022

FY2024
Plan

T&D Insurance Group’s
Business

Progress of Group KPIs

Group’s
Management Vision

With our “Try & Discover” motto for creating value, we aim
to be a group that contributes to all people and societies.

Further Advancementof Capital and Risk
Management

Progress in fiscal 2021

— In Pursuit of the Happiness of All Stakeholders —Group’s Corporate Philosophy

Try & Discover for
Creation of
Shared Value

T&D Holdings |25

Minimum FY2020 level(Improvement from the current level is set as a target,
as a relative assessment)

Minimum FY2020 level(Improvement from the current level is set as a target,
as a relative assessment)

Reduction of 40% from FY2013 levels by FY2025(A 5-year upfront target from The Life Insurance
Association of Japan’s target)| Integrated Report 2022

8.0%

< Cost of shareholder’scapital >Fiscal year
ended March
31, 2022

Over target
level
P.119
Over target
level
P.118

Compared to
FY2013
31.0% reduction

Working toward the T&D
Insurance Group’s Vision
for Society

Try & Discover for
Creation of
Shared Value

Further Advancementof Capital and Risk
Management

Corporate
Governance

T&D Insurance Group’s
Business

Supplementary Materials
and Corporate Data

█ Improving Capital Efficiency Aimed at in the Group Growth Strategy
The Group is actively managing its business portfolio in
an integrated manner to improve capital efficiency. We
aim to achieve stable growth by strengthening our core
domestic life insurance business, and to improve the capital efficiency of our overall portfolio by allocating stable
capital generated from our core business to our growing
closed book business, our new corporate venture capital(CVC) business, and other such business. In particular,in fiscal 2021, we implemented initiatives to accelerate

the improvement of capital efficiency, such as Taiyo Life’s
reinsurance and the decision to invest an additional ¥64
billion in Fortitude Group Holdings, LLC through internalfinancing from Group companies.
In fiscal 2022 and beyond, we will continue to improve
capital efficiency by strengthening our core businesses,
investing in growth sectors, and implementing measures
to improve the profitability of reinforcing sectors, thereby
improving our stock price valuation.

Adjusted ROE: Minimum 8.0%
Growth potential

Try & Discover

Value upHigh growth

New business

Reinforcing sectors

Growing sectors[New sector][Asset management / non-life][Closed book, etc.]

Digital customer platform
CVC• Launching new business

Pet & Family

Distribution of resources

Restructuring / integration /withdrawal

Pursuing synergy• Enlarging size and scale• Reinforcing profitability• Improving revenue•Cross-selling•Efficient use of data
•Cost synergy, etc.

The Group has three domestic life insurance companies
under its umbrella: Taiyo Life, which specializes in thehousehold market; Daido Life, which specializes in the
SME market; and T&D Financial Life, which specializes in
the independent insurance agent market. The Group’sbusiness model excels in that each of the three domestic
life insurance companies specializes in a different market
and brings its own uniqueness and expertise to the table.
In recent years, the companies have been advancing
sales activities that integrate non-digital and digitaltechnologies. Taiyo Life is expanding opportunities toSpecialized
marketFoundation for group management [household market/ SME market]
Householdmarket• Further development of current life insurance business (new product/ service)• Improvement of investment returns (strategic share-holding, allocation)• Increasing customer contact by acquiring the young generation, etc.

• To turn the business around and toclear cumulative losses
Rebuilding

Taiyo Life

About

0.5X

Being a company that
supports the healthy long
lives of many customers•P roduct development based onsocial issues•P rovision of integrated products
and services

0.6

Target levelby 2025:

0.5
0.4

0.2

Company A

T&D

Company B

0.1① Improve capital efficiency by boosting profit

0
5.0%

6.0%

* At the time of the announcement of the Group LongTerm Vision in May 2021

8.0%

26

| Integrated Report 2022

Posting activities(approval base)Sma-Hoken, infomercials

Utilization of digital infrastructure and various types of data

Creation and expansion ofcustomer contact points

Satisfying customer experience•R obust relationship with tie-up
organizations• Specialized channels for SME market•S upport for promoting health-oriented management and resolution ofsocial issues

In-house sales representatives, tax accountants, financial institutions
In-person(face-to-face)In-person (personal)

DigitalEstablishment and maintenance of approach utilizing digital technology and data
Enabling all policy procedures
to be completed without
face-to-face contact

Web services for SMEs

Integrated customer database
construction

Company D

Face-to-face consulting

Independent
insurance agent
market

9.0%

10.0%

Adjusted ROE = Group adjusted profit / Average net asset balance *2019 Results

T&D Holdings |Non-face-to-face approach

Company E

Profit increases in existing businesses + Earnings
contribution from growing businesses

7.0%

Face-to-face approach

Hybrid-style sales

0.7

0.3

About 0.2X*

Daido Life

Company C

Share pricesoaring

Price EV Ratio

P/EV
0.9
*2019 Results
0.8

②

8.0%

Transformation of sales activities

Trusted partner for SMEs

SME market

5.8%*

Basic policy

Stable growth

Contribution of revenue

Adjusted ROE

approach customers by promoting a hybrid-style sales
approach that utilizes information acquired through
Sma-Hoken and other means. Daido Life is developing remote environments, expanding proposals and procedures
without face-to-face contact, and providing centralized
solutions through web services for SMEs.
Going forward, we will strengthen our business modeland continue to build the top brand in each specialized
market through the transformation of our sales activities
and by providing optimal products and services that meetcustomer needs.

Core business (life insurance)[Independent insurance agents]

Target level

Strengthening of Core Business█	The three life insurance companies are aiming to build the top brand in eachmarket by implementing their own specialization and differentiation strategies.

Company

Distribution of resourcesGroup-wide value up

Primary Theme I

T&D
Financial Life

Expansion of presencein the independent
insurance agent market• Banking agent network• Mobility of product development

T&D Holdings |Independent
insurance
agents27

Banks, securities
firms, etc.
Agents closely linked tofinancial institutions| Integrated Report 2022

Online businessmeetings and otherdigital tools

Insurance shops, etc.
Door-to-door sales agencies

Working toward the T&D
Insurance Group’s Vision
for Society

Primary Theme I

Strengthening of Core BusinessTaiyo Life

Try & Discover for
Creation of
Shared Value

Further Advancementof Capital and Risk
Management

Corporate
Governance

T&D Insurance Group’s
Business

Providing new industry-leading coverage

Changing the Business Modelto Promote “Hybrid-style Sales”

Changing the business model
In response to major changes in the social environment,
Taiyo Life has been reviewing its business model andmaking significant changes in its sales approach.
In addition to the conventional home visits by in-housesales representatives working in pairs, the company isdeveloping “hybrid-style sales” that integrates face-toface and non-face-to-face sales activities, utilizing data
via TV commercials, Internet advertisements, and otherpromotional activities.
Although the company has traditionally used a face-toface approach in its in-house sales representative channel, diversification of its channels, such as infomercials

and Sma-Hoken, has increased the geographic area andtime available for customer service and helped expand
the market. This has allowed the company to approachareas where it does not have sales offices and enabledapplication procedures to be made outside of daytime
hours when its in-house sales representatives are active,
greatly expanding its points of contact with customers.
In addition, there has been an increase in the number ofpolicies closed as well as productivity by linking in-housesales representatives with new data obtained throughmarket expansion, in addition to the prevailing data suchas maturity and benefit information.

Market expansion

Promotion of hybrid-style sales

Taiyo Life supports the health and longevity of its customers
by developing products and services based on social issues.
In terms of products, the company sells Himawari
Dementia Prevention Insurance, which helps people deal
with dementia positively and live out their golden years
with peace of mind; Infectious disease plus hospitalization insurance (Lump-sum payment type), which covers
specific infectious diseases including COVID-19; Cancer/
critical illness prevention insurance, which covers cancer
and serious illnesses; and more. In terms of services, thecompany provides Kaketsuke-Tai Service, in which its
internal staff with specialized knowledge directly support
customers’ benefit claim procedures; MCI Screening Plus,
which offers services for dementia and disease prevention; AminoIndex® Risk Screening; and other services.
The company provides new industry-leading coveragethrough offerings with integrated products and services
for customers.

New data

Expansion ofamount of
new data

Time available for customer service

Sma-Hoken
Infomercials

Increase in thenumber of policies
by expanding theamount of data
Policies signed[1st Phase] Improving
efficiency of operations/administration

Shifting to paperless operations,mechanization and automation ofadministration

Prevailing data
2001

Benefit data
Absence*

2018Himawari Dementia Prevention Insurance

COVID-19

2020Infectious disease plus hospitalization insurance(Lump-sum payment type)

Cancer and critical illness prevention

2021-

productivity through the development of next-generation
sales devices, and promoting the use of the Taiyo Life My
Page online account service exclusively for customers by
reinforcing its functionality.

[Going forward] Further promotion of mobilizing “digital platforms” and “various data”[2nd Phase] Improving
efficiency of sales[3rd Phase]
Promotion of hybrid-style sales

Entrance to new markets
through shifting tofully-paperlessadministrations(Sales activities that utilize data collected through
Sma-Hoken, etc.)

Hybrid-style sales

Data collection

Centralized
managementof customer
data

2019

2001
2021

Shifting office staff tosales visit staff

Achievingfully-paperlessadministration

New customer
database

Obtaining more data
through advertisingstrategy

New customer data

Developing
next-generation
sales device

Existing customer
data
Potential customerdata

My Page

Establishment of marketentrance platforms other thanface-to-face/establishment of Sma-Hoken

Sales activities leveraging on customer data

Sustainable investment

Revision tocompensation system

Kaketsuke-Tai
Infomercials

Improvement of productivity

Geographic areas available for customer service* Data of customers of whom sales representative are non-existent due toresignation, etc.

| Integrated Report 2022

Reinforcing
functionality of
My Pagefrom product explanation to
payment of premiums

Visiting service for the elderly

28[Initiatives planned in FY2022]
Investment that accelerates
the 3rd Phase

DX Investment

Launch of Concierge

Infomercials

Number of staff: (82)%Labor costs: ¥(5.4) billion

Policies signed basedon prevailing data

Dementia prevention

Sma-Hoken

Branch office administrative staff

Maturity

Hoken Kumikyoku Best

Taiyo Life will continue to make DX investments to further
solidify its business model through the promotion of hybrid-style sales. Specifically, in fiscal 2022, the company isincreasing its customer contact points through the obtainment of more data via advertising strategies, improving

based on newdata

In-house sales
representative channel(premised on aface-to-face approach)2008-

Promotion of digital transformation (DX)

Efficient utilization ofmanagement resources
e.g. paperless operations

Infomercials and Sma-Hoken(enable non-face-to-face approach)

Customizable insurance

Cancer/critical illness prevention Insurance[Until now] Efficient utilization of management
resources by improving operational efficiency

T&D Holdings |Supplementary Materials
and Corporate Data

T&D Holdings |29| Integrated Report 2022

Working toward the T&D
Insurance Group’s Vision
for Society

Primary Theme I

Daido Life

Try & Discover for
Creation of
Shared Value

Further Advancementof Capital and Risk
Management

Corporate
Governance

T&D Insurance Group’s
Business

Supplementary Materials
and Corporate Data

Strengthening of Core Business“A Trusted Partner for SMEs” that
Delivers More than What is Expected

Pillars of the sales strategy
In addition to the decrease in the number of SMEs andthe aging of their managers, the environment surrounding SMEs is becoming increasingly severe due to the prolonged period of COVID-19 and the growing uncertainty
caused by fluctuations in economic and financial conditions. In this context, Daido Life will focus on three pillars
in its medium-term management plan starting from fiscal
2022: “Advancing the coverage provided,” “Supporting
solution of management issues,” and “Reinforcing the‘power to connect’.”First, as “Advancing the coverage provided,” thecompany will work on product development and updates
centered on total coverage, which provides both deathand disability benefit insurance.
Next, for “Supporting solution of management issues,”

the company will further contribute to the sustainable
development and growth of SMEs by providing solutions
that go beyond insurance, focusing on promotion of Kenkokeiei® (health-oriented management) and resolution ofmanagement issues among the increasingly diverse andcomplex social issues faced by SMEs.
Lastly, for “Reinforcing the ‘power to connect’.” thecompany will evolve its sales structure and build a system
to connect with more customers by innovating customer
contact points and reforming the roles of its sales channels through a fusion of physical and digital.
Through these three pillars, the company aims to be a“trusted partner of SMEs” that provides full coverage for
all SME employees and helps SMEs solve social issues.

1. Advancing the coverage provided (further reinforcing of total coverage)
Although there has been continued significant growth of
total coverage, which is Daido Life’s strength, there are still
many companies that have not yet purchased it. Daido Life
will further reinforce its total coverage by both expanding
its lineup through the development of new disability benefit insurance products, and upgrading its lineup so that
more people can apply to its products. Through this, thecompany aims to steadily increase the number of companies subscribing to total coverage.

Upgrading done to have morecustomers apply

FY2021 total coverage

2. Supporting solution ofmanagement issues

Further reinforcing of total coverage

3. Reinforcing the “power to connect”

Supporting SMEs in solving social issues(health-oriented management /management issues)

Evolving customer contact points
Evolving the roles of sales channels

New policy amount¥1,295.8 billion

Share of new policy

34%

Expansion of ourlineup with newdisability benefit

its new product for health promotion. In addition, thecompany will further contribute to the sustainable development and growth of SMEs by expanding solutions
that support the resolution of management issues such assustainable management, and providing them centrally
through “Dodai?”, a web service for SMEs.

Health-oriented management is one of the most important themes among the social issues of SMEs because of
its high affinity with insurance. Daido Life aims to support
the health of SME employees through the expansion of
KENCO SUPPORT PROGRAM (KSP), its unique programthat supports health-oriented management implementation, and the promotion of Kaisha Minnade KENCO+,

To contribute to SMEs solving social issues/developing sustainably
Web service for SMEs “Dodai?”Supporting promotion of health-oriented management

1. Advancing the coverage provided

94 thousands companies

2. Supporting solution of management issues* Kenkokeiei® is a registered trademark of the Kenkokeiei Nonprofit Organization.

Pillar of our strategy

Enrolled companies

Supporting SMEs solving management issues

Expandinghealth management program “KSP”
Consolidated provision of ”prevention” and “preparation” through the new
product Kaisha Minnade KENCO+.
KaishaMinnadeKENCO+

Supporting sustainable management
Expansion of various management support services

KENCO SUPPORTPROGRAMEnlarging various health related services

Sustainability
management support program

Safety check-up system

Supporting M&A

Assessment service ofcorporate value

Reports on businesses

T&D Club Off• Cancer specific phone-call consultations • Second opinion • Stress checks• Referral to Full medical check-up
etc.

To continue to strengthen / expand the lineup, thereby expanding the areas in which we can fulfill our role

Expansion of customer (receiver of values provided)

Companies withtotal set of policies
Purchase of full-range protection
with death and disability benefits

Companies with partial policies

Companies to which Daido Life
will newly contribute

SMEs

Subscribe to the company’s
insurance

Provision of value beyond
insurance

Higher presencein the SMEs market

T&D Holdings |30| Integrated Report 2022

etc.

3. Reinforcing the “power to connect”
The company will provide highly satisfying customer
experiences and expand its points of contact with customers by strengthening its system for utilizing customer
information and other data and by integrating in-person
and remote points of contact as well as digital points ofcontact at its branches and headquarters.

In addition to the stable growth of existing in-house sales
representative and agent channels, Daido Life will achieveeven stronger growth through new initiatives such as“channel mixing,” which combines the strengths of inhouse sales representatives and tax accountants, in addition to financial institution agents and FP and inheritanceconsultants.
T&D Holdings |31| Integrated Report 2022

Working toward the T&D
Insurance Group’s Vision
for Society

Primary Theme I

Try & Discover for
Creation of
Shared Value

Further Advancementof Capital and Risk
Management

Corporate
Governance

T&D Insurance Group’s
Business

Supplementary Materials
and Corporate Data

Strengthening of Core Businessa Group company that supports independent insurance
agents like financial institutions and insurance shops. We
have offices in the four cities of Tokyo, Nagoya, Osaka,and Fukuoka, but I work in the Tokyo sales department.
My job involves selling our products through the branchesof banks and securities firms, as well as insurance shops.

Life Insurance Sales
Discussion
Three employees that work in sales in the Group’s
mainstay domestic life insurance business shared theirthoughts about company strengths, how COVID-19
changed the way they work, and the challenges thatlay ahead. We also asked them about their own job
satisfaction and how they are putting the Group’s
management vision into practice.

—— In what ways do you find your job rewarding?
For me, delivering outcomes that tax accountants can be happy about is the most rewarding thing.
We use standard coverage to calculate roughly how
much insurance a customer will require in times of need.
Based on that and other data, I’ll prepare materials andthen together with a tax accountant, present them to thecustomer that is being advised by the tax accountant. As
a result, it’s fulfilling to see the customer satisfied with myproposal and hearing the tax accountant compliment me
about the way I approached the customer and their situation. Even though we usually get transferred after threeor four years, because I work hard to build relationships
with the tax accountants, I hope I can accomplish as manythings as possible to please them.
Tatsukawa My job is most rewarding when a sales representative generates results because of my encouragement. It’s personally pleasing when a sales representative,
who was unsure about what kind of proposal to offer to acustomer, finalizes a contract based on my product design
advice. I also feel really happy when I hear about young
managers within the bloc producing solid results.
Hanashima Given that it’s my mission to have the employees of banks and securities firms sell our products
from among the many other insurance policies, it’s reallysatisfying when they tell me our products are the ones
they like the best, or when a new employee informs me
they closed their first contract with one of our products.
Also, because I visit the branches of banks and securities
firms to conduct sales promotion training, I feel a sense ofaccomplishment when my guidance has helped a branchyield strong results by selling T&D products and is ultimately recognized for exceptional sales performance.
NishidaTaiyo Life
Hiratsuka Branch office

MiyokoTatsukawa—— First of all, please introduce yourself and tell
us what you do.
Nishida It’s been six years since I joined Daido Life,
which specializes in the SME market. I worked in Osaka
for the first three years, but after I got married I made useof the family transfer system to relocate to the Accountant
Agency Management Shinjuku Branch, where I’ve worked
for the last three years. I’m in charge of around 30 tax accountant offices and I provide support to tax accountants
when they offer insurance advice to SMEs.
Tatsukawa I’m now in my seventh year at Taiyo Life, whichtargets the household market. I started at the Kurashiki
Branch office before moving to the Yokkaichi Branch
office. I then worked in the human resources department
at the head office, where I was involved in training new
employees and hiring new graduates. Currently, I’m a
training manager at the Hiratsuka Branch office, where I
train and manage not only sales representatives, but also
young assistant managers within each bloc across Japan.
Hanashima Seven years ago I joined T&D Financial Life,T&D Holdings |—— How has COVID-19 changed the way you interact with customers and your own working style?
Nishida When the first state of emergency was declared,
I started working from home and was unable to meet
directly with customers. On the other hand, the customersof tax accountants held concerns about the coverage of
their insurance policies, so we accordingly fielded more
inquiries during that time about contract reviews and thelike. I therefore used Zoom to hold discussions online, topropose policies, and to guide them through the online

32| Integrated Report 2022

as a tax reduction strategy. I think being able to continuously communicate the importance of insurance coverage
is a company strength that has been highly rated evenin the midst of changes brought about by the COVID-19
pandemic. Also, because the tax accountants have agood understanding of their customers’ situations, theycan quickly propose the most optimal solutions to accommodate their changing needs and circumstances, mainly
by suggesting the kind of insurance required and where apolicy review might be needed. Many customers think of
insurance premiums as a company expense, but insurance
is pretty much meaningless if it cannot cover the costs inthe event of something happening to the company president or directors, so that is why the tax accountant always
sits down with the customer to consider the worst-casescenarios, which is where the concept of standard coverage is really useful I think. I believe standard coverageis also one of Daido Life’s biggest strengths, because it’ssomething that cannot be proposed unless we work together with a tax accountant to gain a deep understanding of the company.
Another of our strengths is being able to provide information about supplementary services. Daido Life alsooffers a comprehensive health management app called
KENCO SUPPORT PROGRAM. It lets customer companies collectively manage the health of their employees
by providing information about lifestyle disease risks andencouraging them to take medical checkups, follow up
on tests, exercise regularly, and eat well. It has been rated
favorably in recent times by SMEs as a useful health management tool simply because more and more employees
are not going outside as much and they are concerned
about their health.
Tatsukawa I think Taiyo Life’s biggest strength is its ability
to swiftly provide new products in response to changes

application process. The tax accountants too had shifted
their customer meetings to Zoom, so the whole transition
went relatively smoothly. As meetings were held online, it
was also easy for busy tax accountants and their customers
to schedule appointments, so if anything, the frequency
of communication may have actually increased. My travelling time was greatly reduced because I wasn’t paying
visits and my team finished work at 17:30 every day. We
were also guaranteed paid leave every month, which also
greatly improved the working environment.
Tatsukawa I’ve been visiting households from which we
receive an infomercial or online insurance inquiry, suchas from Sma-Hoken (internet channel). Of course, I makesure to adhere to all necessary COVID-19 measures when
visiting households. I also post fliers in the surrounding
neighborhoods and conduct sales activities when I havepermission to do so. In the past, I used to accompany asales representative on door-to-door cold calling, which
resulted in few opportunities for meeting with new prospects. However, now we have many opportunities to meet
with, and propose products to customers through direct
data, such as informercial, and the probability of finalizing
contracts with these customers continues to increase.
Also, I used to visit a lot of elderly customers, but now
with more people working from home or teleworking,around 20%–30% of all my proposals are to the productive middle-age generation.
Hanashima After the first state of emergency was declared,
restrictions on face-to-face sales were strictly enforced.
I’m no longer able to drop in on branches and agents
when I’m in the area, so now I mainly use Zoom or another similar application to run training sessions online forsales agents and the like. Also, the content of meetings
is more important than ever before, which means I now
focus more of my attention on the selection of topics
and how I go about providing explanations. On the other
hand, training sessions used to only have around 20
people in them and most people preferred that they were
held in the evening, but with online meetings, people
from other branches can also participate, which means we
can have around 100 participants in a single session, so inthis sense, the efficiency of our meetings have improved
somewhere between five and 10-fold.

Daido Life
Accountant Agency
Management
Shinjuku BranchMidori
Nishida—— Even during the COVID-19 pandemic earnings
have been brisk, but what do you think are yourcompany’s strengths based on your personal
experience?
Nishida Daido Life has long partnered with tax accountants to offer standard coverage to SME customers bytelling them exactly how much insurance coverage theyshould take out as a precautionary measure rather than

T&D Holdings |33| Integrated Report 2022

Working toward the T&D
Insurance Group’s Vision
for Society

T&D
Financial Lifein the times and society. For example, even during the
pandemic, we were the first insurer to launch the Infectious disease plus hospitalization insurance (Lump-sum
payment type). Customers of this product have continued to increase. Furthermore, the market environment
is changing rapidly because in the past we could only
approach customers in places where we could physically
visit ourselves, but now applications can be completed
online. Our elderly customers have also taken a liking tothis method because we can remotely confirm the information they have entered and provide support during theapplication process.
Hanashima I’d have to say that having banks as a sales agent
channel is a major advantage. In fact, even during the
pandemic, the number of people visiting banks has hardly
declined. This is because a bank account is a key piece ofinfrastructure in one’s life. On top of that, people working
remotely or from home often visit their local bank branch.
Earnings are brisk because more people are reachingan age at which they need to give more thought to theirown health and think about inheritance matters and weare also seeing previously uninterested people startingto take more of an interest in insurance. I think anotherof our strengths is the fact that we have focused ourresources on developing nursing care and dementia
insurance at a time when the pandemic made it hard forpeople to utilize day care and other care services, thereby
exacerbating concerns about the risk of dementia. Morespecifically, we have a product called Shogai PremiumWorld 5, which is one of our top-selling foreign currency
denominated products, but the addition of nursing careand dementia riders sets it apart from the products ofother companies, which is probably why sales are brisk insuch a highly competitive category.

East Japan Sales
Department No. 1

Yuto
Hanashima

Further Advancementof Capital and Risk
Management

Corporate
Governancecalled “age of centenarians,” offering innovative products
and services ahead of our rivals will be a challenge going
forward. For example, I think we will need to develop
insurance that not only provides coverage to somebody
with dementia, but also helps arrest its onset when thefirst signs of the illness appear. Daido Life currently offers
SMEs a health management app, but Taiyo Life is alsoendeavoring to help prevent dementia by developinga health promotion app for the elderly that encourages them to go for walks and play brain-training games.
We also provide a support service called Kaketsuke-Tai
whereby a Taiyo Life employee promptly visits customers
that have been hospitalized or operated on, for example,
to make sure they complete the procedures for claiming
insurance benefits and the like. The steps to claim benefits can be completed on a mobile device and payment
can be made in as little as 10 minutes after some surgicalprocedures, such as the removal of cataracts or colon polyps. Naturally, this service has been favorably received bycustomers. I therefore think it’s important that we continue to increase the number of Taiyo Life “fans” by further
enhancing such add-on services.
Hanashima The population of people aged in their 60s
that will soon be eligible to receive a large sum of money such as retirement allowances is rapidly swelling. Our
sales division is thus focused on selling single-premium
products. A few moments ago I mentioned that one of
our foreign currency-denominated products is a top seller.
That product is largely impacted by interest rates and theforeign exchange environment. This obviously presents achallenge, which is why we developed Hybrid Asset Life,a variable whole life insurance product that combines thefeatures of an investment trust with life insurance. So thatour products always remain best sellers even when there isconsiderable volatility in interest rates and forex markets,
we are currently employing a two-pronged sales approach

Nishida I already mentioned the advantages of Zoom
meetings, but there are also disadvantages to using online channels too much. For example, I think the relationships between tax accountants/their customers and Daido
Life are somewhat lacking in substance. Real responses
are hard to gauge online and customers find it hard to
freely ask questions when explanations are so one-sided.
As we are starting to come out of the pandemic now, I
think a hybrid approach in which either online or real-life
communication is used will become even more important.
I particularly think in-person visits are required when a tax
accountant is meeting their customer for the first time
and we should continue to prioritize the visits until bothparties are able to talk more freely with each other.
Tatsukawa Considering that we are currently in the so-

34| Integrated Report 2022

Supplementary Materials
and Corporate Data—— Finally, how do you practice the Group’s
management vision of “Sow happiness, makechange with boldness”?
Nishida People tend to heedlessly put off life insurance
unless something actually happens to them or if someone
in their immediate family is gravely ill. However, if something happens to an SME that lacks the financial stamina
of bigger corporations in particular, it would already be
too late. So at the risk of repeating myself, I team up with
tax accountants to provide information to SMEs and urge
them to take out the insurance policies they require inorder to shore up their defenses and help them give theirundivided attention to business management with greater peace of mind.
Tatsukawa In particular, I make sure that our sales representatives leave the office every morning in high spirits. I
always talk to them in a positive manner during morning
meetings and training sessions by suggesting topics they
could discuss with customers or proposals they might
like to try. By meeting each and every one of our sales
representatives in person, I hope to be someone whomthey can come and talk to first if they have any concerns.
I always make an effort to speak to them and check that
nothing is bothering them and that their attitude is still
the same. I believe that sowing happiness in the world
should start with a bright and cheerful workplace.
Hanashima I basically never get to meet our end user
customers, but I’m always mindful of talking to people
from our financial institution sales agents as if they actually were our end users. I ultimately give first priority to
the creation of happiness for our end users by providing
whatever support I can to our sales agents.

Nishida Daido Life’s vision is to be a trusted partner for
SMEs that provides value more than expected. Accordingly, in order to consider what might prove useful forthe purpose of helping SMEs solve problems, it’s imperative that we capture what corporate managers and tax
accountants are actually looking for. To that end, it’s vitalthat we collect information.
Tatsukawa I think we must respond to the needs of Japan’s
rapidly aging society, actively incorporate technologicalinnovation, including digital transformation, and manage
our business operations in a sustainable manner. As I’m incharge of training sales representatives, I think it’s important that we try and improve the level of training. For
instance, with online training we should be connecting
branches to the head office or to other branches.
Hanashima Competition with rivals is heating up in terms
of product development, so I think the biggest challenge
for us going forward is to highlight the added value of our
products with riders and other special clauses, rather thanfocusing on interest rates or other product features thatare hard to differentiate. It will also be important to delve
deeper into the nursing care and dementia needs ofcustomers, provide added value with services and the likethat utilize Kaigo Concierge, and aim to develop products

T&D Holdings |T&D Insurance Group’s
Businessthat are finely attuned to customer needs instead of justproviding financial security.

that consists of not only foreign currency-denominatedproducts managed in the foreign bond market, but alsoa lineup of yen-denominated products with the use ofinvestment trusts. Incidentally, the variable insurance wedeveloped has very low running costs and the investment
gains it generates are steadily returned to customers,
which is why sales of this product were exceptionally brisk
last fiscal year.

—— What do you think is needed to further
deepen the life insurance business?

—— Are you aware of any issues at present?
What measures can be taken to resolve them?

T&D Holdings |Try & Discover for
Creation of
Shared Value

35| Integrated Report 2022

Working toward the T&D
Insurance Group’s Vision
for Society

Primary Theme II

Corporate
Governance

T&D Insurance Group’s
Business

We are also acquiring and accumulating know-how witha view to developing a closed book business in Japan,
as the market is expected to expand in future with theintroduction of economic value-based capital regulationsin Japan in fiscal 2025.

Trends in adjusted profit (TDUC)

FY2025 target
FY2021ResultFY2020ResultAbout “closed book”?

Over

¥18.6
billion¥12.5

Life-cycle of insurance product(from launch to “Closed book”)

billion¥30.0
billionInsurance Liabilities(Volume)Increase in insurance
liabilities in response
to in-force businessexpansion

To expand accumulated investment amount to approx.3-4 times

Decrease in insurance
liabilities as in-force
business shrinks“Closed book”

launchElapsed time

run-off

What is “closed book business”?
Acquisition and consolidation through M&As
and reinsurance transactions to enhance value
and realize profits

New business acquisitions and value-enhancement in closed book businessInsurer (Consolidator)

Insurer A

A “closed book business” is a type of insurance businessthat aims to realize profits by acquiring and consolidating closed books of other insurance companies throughmergers and acquisitions (M&A), reinsurance transactions,and other means, and enhancing their value. There arethree main methods for increasing value. The first is better efficiency through scale of economics. Cost synergies
are created by consolidating multiple closed books andfully leveraging in-house IT platform. The second method is to enhance investment yield. It involves improving
RoR through the optimization of the investment portfolio
based on insurance liability profile and regulatory capitalrequirement, etc. The last method is the improvementof capital efficiency. For example, by creating a risk dispersion effect by offering a diverse product lineup anddiversifying geographic regions, the company will reduce
capital requirements and increase capital efficiency.

Closed book: a1

M&A(legal entity
acquisition)

2

Risk transfer
throughreinsurance

Closed book: b

3Businesstransfer

Closed book: c

Insurer B
Closed book: b

Insurer A
Closed book: aEnhancing valueof closed books
acquired

Acquisition of
Fortitude’s share

Additional investment
into Fortitude¥79.9 billion (in 2020)¥ 64.0 billion (in 2022)

The additional investment brings the cumulative investment in Fortitude to just under ¥150 billion, reachingthe “milestone” that was originally envisioned. We willconsider further collaboration with Fortitude in the development and expansion of our Japanese business. In
fiscal 2021, Fortitude underwrote the reinsurance of Taiyo
Life's negative spread block. We will continue to consider
initiatives in collaboration with Fortitude in reinsurance
transactions with the Group.

We will also continue to pursue new investment opportunities that allow us to disperse our risk exposure interms of business model, geography, and other aspects
with Fortitude by leveraging the experience and knowhow we have gained through our investment in Fortitude.
We also expect that the size of the new investment during
the period of the Group Long-Term Vision will be about
the same as the amount of the investment in Fortitude.

Insurer C
Closed book: c

Better efficiency
through scale ofeconomics

Investment yieldenhancement

Pursue cost synergies in IT/admin areas through“consolidation”• Fully leveraging in-house IT platform• Maximizing bargaining power in case of business process outsourcing

Improve RoR through investment portfolio optimization
based on insurance liability profile and regulatory capitalrequirement, etc.
• Including taking liquidity risk (e.g., shifts from IG corporate bonds toilliquid credit assets)

Capital efficiency
improvement

To drive forward “expanding the scale” of closed book business concurrently with “risk diversification within the investment portfolio.”

Control capital requirements through in-depth risk management on assets and liabilities• Including (1) reducing duration gap between assets and liabilities /
further cash flow matching, (2) diversification benefits through consolidating various product lines and geographical risks

1. Fortitude
2. New investment
Investment
amount¥79.9“Risk diversification”(geographical/business model-wise, etc.)

billion(2020)

Additional investment¥ 64.0 billion

Also assuming
investment scale
similar to that of
Fortitude(2022)
T&D Holdings |Supplementary Materials
and Corporate Data

Fortitude is progressing well, and is expected to contribute to TDUC’s adjusted profit growth in the future.
Furthermore, TDUC made an additional investment of¥64 billion in Fortitude in 2022 (including its investmentcommitment, same hereafter on this page), and is making steady progress toward achieving its adjusted profit
target of over ¥30 billion in the Group Long-Term Vision.

TDUC, which is responsible for promoting growing sectors in our Group, is engaged in the closed book businessthrough the investee companies.
Fortitude, TDUC’s principal investment, has been madean equity-method affiliate, which acquired its equity interest from AIG in fiscal 2020, and is one of the reinsurers
with a strong position in the closed book market. The recent acquisition of new books by the principal investment█	Positioning the closed book business as a strategically important area andstrengthening initiatives“Closed book” generally refers to a policy (or block ofpolicies) in force for a product that has been discontinued
by an insurance company.
In the developed insurance market, sales of capital-heavy traditional life insurance products with high capital requirements were suspended under the new capital
regulatory framework. These products are being sold as
closed books due to their reduced scale as a result of thesuspension of sales and the expected long-term increasein administrative costs, among other factors.

Further Advancementof Capital and Risk
Management

The growing closed book business iversification and Optimization of
D
Business Portfolio

To diversify our business portfolio, we have been making
closed book investments that have strong affinity with
our domestic life insurance business. In fiscal 2020, weinvested in Fortitude, a reinsurance holding company
based in Bermuda.

Try & Discover for
Creation of
Shared Value

36| Integrated Report 2022

T&D Holdings |37| Integrated Report 2022

Working toward the T&D
Insurance Group’s Vision
for Society

Try & Discover for
Creation of
Shared Value

Further Advancementof Capital and Risk
Management

Corporate
Governance

T&D Insurance Group’s
Business

Supplementary Materials
and Corporate Data

Building a digital customer platform
Primary Theme IV

Developing and providing new products and services by building contact points withcustomers using digital tools and utilizing data
Due to Japan’s declining birthrate as well as its shrinking
and aging population, the domestic market is becoming
increasingly competitive, and a major challenge is how toestablish contact with customers going forward.
To this end, we are conducting consideration on building a new customer platform by utilizing digital tools suchas social media and apps, as well as by collaborating withbusinesses and communities.

By utilizing data to gain a deeper understanding of ourcustomers, we aim to develop and provide new insurance-centered products and services based on our customers’ perspective.
In the future, we plan to contribute to the diversificationof the Group’s overall customer contact points by establishing long-term and stable relationships with customers andby linking the established infrastructure within the Group.

Establishment of customer contact
points using digital tools

Development of new products andservices using data

Promoting Integrated Group Management█	Shared use of customer information within the GroupOne of the key themes of the Group Long-Term Vision
is to fully use Group management resources as much as
possible and promote integrated Group management.
As part of this, we will work on shared use of customer
information within the Group. By sharing and utilizing
customer information held by Group companies in avariety of situations, we will enhance the sophistication
and added value of the products and services we provide
to our customers. Particularly in terms of sales, if there isa product or service that a certain Group company does
not provide, then we will have another Group company
provide it to customers, which will lead to the increase of
new customers and retention of existing customers.
Initially, Pet & Family Insurance will be the starting point
for expanding the Group’s customer contact points. In the
future, we will expand the scope of our efforts by utilizing information acquired through the establishment of adigital customer base.

Services
Data

Company and community

New company

Strengthening IR activities within the Group
Alliance and collaboration

Group IR
Since fiscal 2022, we have been strengthening IR activities within the Group with the aim of sharing the Group’s
direction as well as promoting stronger market disciplineand other such matters. For the Group’s current IR activities, we have also devised ways to make IR more familiar
and approachable to Group employees, such as by using
the nickname “Group IR” reflecting the fact that the term“IR” sounds like the phrase there is love in Japanese.
Under the ”Group IR” initiative, which began in April
and will continue through September, our management
team is holding small meetings in an interactive format
with several hundred managers of the Group. The management team conveyed the purpose and significanceCorporate venture capital fund initiative
Building relationships and co-creating businesses with startup companies that have advanced
technologies and business models to accelerate “Creation of Shared Value”
With today’s accelerating pace of environmental change
and technological innovation, it is becoming increasingly
difficult for companies to create innovations by themselves.
Therefore, in order to further accelerate the “Creationof Shared Value” that generates both financial and social
value, our Group has established a corporate venture
capital (CVC) firm with Spiral Capital as a partner for the
purpose of building relationships and co-creating businesses with startup companies that possess advanced
technologies and business models in the healthcare andInsurTech fields.
Through CVC, we aim to pursue financial returns
through IPOs and other means while prioritizing strategic
returns such as new business creation and strengthening
existing businesses.

Investment to establish group's
new business in the future, etc.
Investments to strengthen
existing businesses, etc.

of the Group’s being listed on the stock exchange, issues
faced by the Group as seen by the market, and the Group
Long-Term Vision. The participants raised a variety ofopinions, including Group issues as seen from the frontlines and their expectations for the Group Long-Term
Vision. There were lively discussions during the meetings.
In addition, by October, we will use video and e-learning to hold briefings for all employees, including in-housesales representatives, and also activate the employee
shareholding association.
We plan to further promote the “Group IR” initiative toachieve the Group Long-Term Vision.

Group’s
existing business
field
New
markets

Market scaleNewmarkets

Group IR in action

T&D Holdings |38| Integrated Report 2022

T&D Holdings |39| Integrated Report 2022

Working toward the T&D
Insurance Group’s Vision
for Society

Try & Discover for
Creation of
Shared Value

Further Advancementof Capital and Risk
Management

Corporate
Governance

T&D Insurance Group’s
Business

Supplementary Materials
and Corporate Data

Dialogue Between Expert and Executive Vice President
Primary Theme V

SDGs Management and Creation of ValueT&D Insurance Group’s Initiatives toAddress Sustainability Issues█	SDGs Management and Creation of Valueto society through our business. From among the various
areas of sustainability related to our business activities, wehave selected four sustainability priority themes to mainly
focus on major social issues that are of high importanceto society and have significant relevance to our business.
By addressing these priority themes, we aim to createshared value and cultivate “happiness of the society.”

The Group’s core business is the life insurance business,
and we mainly focus on having sustainable businessthat provides customers with safety and peace of mind
through our products and services. At the same time,as an institutional investor, we are closely connected toeconomic development and the realization of a sustainable society, and we have a responsibility to contribute

Creation of shared value

Achieving our non-financial KPIs

Basic approach

Through life insurance business, the Group’s core business,
we will create shared value and cultivate “happiness of the society”
by addressing the sustainability priority themes (materiality).

Priority theme (1) Promote healthy and abundant lives for all people

Priority theme (2) Provide workplace environments that enable
all people to participate actively

We will contribute to solving social issues by providing optimal,
high-quality products and services that meet the needs ofour customers.

We will promote business activities that respect
the human rights of all stakeholders, including
our business partners and employees.

Priority theme (3) Help mitigate and adapt to climate change

Priority theme (4) Invest to help build a sustainable society

Through our business activities, we will contribute to climatechange mitigation and adaptation, and work to create a net-zerosociety and conserve biodiversity.

As a responsible institutional investor, we will contribute toenvironmental, social, and corporate governance (ESG) issues
through our investment and financing activities.

T&D Holdings |40| Integrated Report 2022

Kenji Fuma

Kanaya Morinaka

CEO, Neural, Inc. / Specially Appointed Professor,
Shinshu University

T&D Holdings, Inc.
Representative Director and Executive Vice President

Morinaka The T&D Insurance Group has formulated theGroup Long-Term Vision looking ahead to fiscal 2025,with “SDGs management and creation of value” as oneof its priority themes. Our aim is the “Creation of Shared
Value” that will both solve social issues related to the
SDGs and improve financial value. In addition, in orderto unify the Group’s approach and direction and demonstrate our commitment to sustainability issues to society
at large, in May 2022 we formulated the T&D InsuranceGroup Sustainability Statement, in which we once again
clearly lay out the four pillars of our approach.
The first of these is “Promote healthy and abundant
lives for all people,” which can be said to be the number
one goal of the insurance business. The second is “Provide workplace environments that enable all people toparticipate actively.” For example, we have launched a“Head Office Anywhere” initiative that uses DX technology so that our employees can work on the head officetasks regardless of their location, whether at home or in arural area. The point is not just to deal with COVID-19 but
to enable a way of working that allows employees to balance work with childcare or nursing care. The third pillar is“Help mitigate and adapt to climate change.” To becomecarbon neutral by 2050, the Group has set a goal of re-

T&D Holdings |ducing CO2 emissions by 40% from the fiscal 2013 level by
fiscal 2025. We have also joined RE100, an international
initiative that aims to procure 100% of the electricity usedin business activities from renewable energy sources. The
fourth pillar is “Invest to help build a sustainable society.”
As a responsible institutional investor, we are committed
to ESG-conscious investment.
We established a Sustainability Advisory Committee
based on the belief that it is important to incorporate theperspectives of outside experts and the latest trends inorder to improve these sustainability activities, and you
have graciously agreed to join the Committee as an advisor. That’s why I’d like to take this opportunity to ask yourhonest opinions on the Group’s sustainability initiatives.

I’d like to see you play a leading role inleading the industry in a sustainable direction
Fuma When exchanging views with you all on the Committee, I really feel that insurance has been intended fromthe very beginning as a system to support a safe and secure society, which makes it a business that is closely related to sustainability by its very nature. At the same time, inthese days when uncertainty is increasing, expectations for41| Integrated Report 2022

Working toward the T&D
Insurance Group’s Vision
for SocietyLong-Term Funding to Support Social Businessthe insurance industry are very high not only in Japan but
also in Europe and the U.S., so I think it’s commendable
that T&D Holdings has sorted out anew what is required ofit by stakeholders and published it in the form of a statement. T&D Holdings is also in a position to provide longterm funding, so I’d like to see you play a leading role inleading the industry in a sustainable direction.
Morinaka Among many insurance companies, Daido Lifeis one that has focused on insurance for SME owners, andmost of its 370,000 customers are companies with five or
fewer employees. For such companies, insurance is extremely important to protect the company and the livelihoods of employees and their families when the ownerdies or becomes unable to work due to injury or illness.
In Japan, when an SME receives a loan from a bank, thecompany management and the individual are one and thesame, and the owner and the owner’s family are required
to be co-signers. It is said that this hinders the development of startups. With that in mind, we want to provide
an environment where startups and SMEs can take onchallenges confidently with the understanding that theessential function of insurance is “protection.”

Morinaka As a company entrusted with funds for 30 or
40 years, long-term investment is something we do better than banks. The Group’s ESG investment balance has
increased by about ¥100 billion every year to over ¥600 billion today, including the hydrogen power generation business, which emits no CO2, and green bonds. We would
also like to use long-term funding to support social businesses that can’t be part of our core business, so in June
2022, we established a corporate venture capital fund witha partner company with the goal of investing aggressively
in startups with innovative technologies and ideas. This isdirectly related to the development of startup companies
I mentioned earlier.
As an aside, at the fifth Nikkei Social Business Contest
in 2021, which we co-sponsored, to my surprise, a team ofhigh school students won the grand prize for developing
an app that contributes to reducing CO2 emissions byrecording CO2 emissions in a household account book as
if it were a game. In addition to the brilliance of the idea,
I was impressed that the members of Generation Z areso conscious and serious about the environmental issues,
taking them as a crisis they will have to face.
Fuma With regard to non-environmental SDGs, Japan’s
Ministry of Health, Labour and Welfare has taken up the
topic of “health and nutrition” in an effort to maintainJapan’s universal health insurance system and preventthe collapse of medical care. The government has also
issued alerts related to nutrition amidst climate change,
the COVID-19 pandemic, and now the Russian/Ukrainiansituation threatening food security. The Ministry has long
been concerned about the negative impact of climatechange on the health and nutrition of Japanese citizens,and is eager to share its awareness of the problem withthe private sector and to enlist their help. Looking to the
future, the deeper we dig, the more challenges arise. For
companies like T&D Holdings that are in a position toview the sustainability of the world from a very long-term
perspective, it’s a moment of enormous risks and opportunities, and I hope T&D Holdings will exercise leadershipon the “Creation of Shared Value.”Morinaka The number of people newly diagnosed withcancer decreased for the first time in 2020. This is attributed to the decrease in cancer screening visits due to the
COVID-19 pandemic. We live in an era when cancer can
be cured if it is detected early enough by annual cancer
screenings. The decline rate of early-stage cancers thatare less symptomatic and more likely to be detected byscreening is usually greater than that of advanced cancers

From Environment to Natural Capital
Fuma Insurance companies are the companies with thegreatest sense of urgency about climate change. And intheir role as a source of long-term financing, insurancecompanies have also become central players in creatinga groundswell of climate change action. However, weshould keep in mind that there’s a growing movementthat recognizes that climate change and decarbonization
are no longer enough — we have to approach the issue
as “natural capital,” including biodiversity conservation.
In addition, in Japan, there’s a growing information gap
on sustainability between large enterprises and SMEs. I
would like to see T&D Holdings fill that gap, since as an
ESG investor, you’re in a position to quickly obtain global
information on this issue, while at the same time you havean excellent channel to the SMEs.
Morinaka Yes, we’re frequently asked to play that role.
Especially for SMEs embedded in overseas supply chains,addressing sustainability is an existential risk, and webelieve we have a responsibility to provide information toensure that they are not cut out of the supply chain. We
also believe that increasing the level of sustainability of
SMEs is beneficial to us, as it leads to business stability.

T&D Holdings |42| Integrated Report 2022

Try & Discover for
Creation of
Shared Value

Further Advancementof Capital and Risk
Management

Corporate
GovernanceSupplementary Materials
and Corporate Data

we should also keep this in mind when thinking about
how we communicate with employees. Finally, do you
have any thoughts to share with the Group?

that are discovered later through obvious symptoms. The
Ministry is therefore encouraging cancer screening, andan increasing number of large companies are engaged
in this kind of health and productivity management, but I
think there are many SMEs where even the owners don’t
get medical examinations. Comparing cancer screening
rates in Japan and the U.S., the U.S. rate is about 80%,
while Japan’s rate is about 40%. Just improving this figurealone would have an impact, so in terms of contributing
to the health of everyone, we believe we can be of service
in this area as well.
Taiyo Life also has a subsidiary called the Taiyo Life
Aging Society Institute that investigates and researchessocial issues such as countermeasures to the declining
birthrate and extension of healthy life expectancy, publishes its results, and develops them into insurance products and services. For example, walking speed gradually
decreases with age, but it is now known that if a person’s
walking speed drops suddenly, the person may be atincreased risk of mild cognitive impairment, a precursor
to dementia. We utilized these results in our Taiyo Life
health promotion app, which supports customers in improving various aspects of their health including walking
and sleeping. In addition, Taiyo Life is developing products and services such as Himawari Dementia Prevention
Insurance to help everyone live long and healthy lives inthe era of the 100-year life.

Implementing the “Creation of Shared Value”
Fuma The results of sustainability initiatives are not immediately apparent, but it is important to accumulate them ona daily basis. I often refer to it as “the long journey.” It’s alsoa journey where new challenges arise endlessly. That journey has begun anew, but as we know, there’s nothing more
unsettling than a journey without a clear purpose and goal,
and if stakeholders become unsettled, they’re likely to leave.
For T&D Holdings, it’s a journey with four priority themes, on
which I am privileged to give advice as the Company clarifies
the direction and implements the “Creation of Shared Value”
in this ever-changing business environment.
Finally, another major social issue that has emergedin the world is the division caused by inequality. Thereis wage inequality, employment inequality, and regional
inequality, and Japan is not immune. As these disparities
widen and become entrenched, various effects arise. I
would like you to do some research on this matter as well.
Morinaka Thank you for your wide-ranging opinions andsuggestions on the theme of solving social issues. The initiatives set forth in the Group Long-Term Vision are now intheir second year of implementation and, with your help,
are making steady progress. The points you’ve raised will
help us improve our initiatives in the future. Meanwhile,
together with our employees, we will strive to become abetter company while taking care of our stakeholders. So,
thank you for your continued guidance and support.

Spreading Awareness of SDGs Management
and Creation of Value
Morinaka By the way, do you have any advice on how
to spread awareness of the Sustainability Statement
throughout the Group?
Fuma Sustainability awareness is not something thatcan change dramatically over a few hours of training. DX
should be used to maintain a constant flow of information, and it’s also important that both management andin-house sales representatives on the front lines can explain the importance of sustainability in their own words,
not someone else’s. Also, since most employees will bepassive at first, I think it’s better to start by explaining sustainability in a way that is familiar to them, for example,
and by giving them tips that they will be interested in andwill want to pass on to the outside world.
Morinaka Indeed, if the motivation of employees increases and the number of employees who act autonomously increases, this will boost both productivity andprofitability. To that end, we should continue to pursue
becoming a good company that solves social issues, andT&D Holdings |T&D Insurance Group’s
Business

43| Integrated Report 2022