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

CHAPTER 04

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

Outside Director Roundtable

Corporate GovernanceAchieving the Group Long-Term Vision— Challenges for the Group and future expectations —We continuously strive to flesh out our corporate governance inorder to achieve sustainable growth and enhance our corporate
value in the medium to long term.

Business activities
Creation ofshared value

CapitalCorporate governanceOutside director

Outside director

Outside director

Outside director

Outside director

Shinnosuke Yamada

Seiji Higaki

Atsuko Taishido

Naoki Ohgo

Kensaku Watanabe

Current assessment of progress towards
the Group Long-Term Vision and future
expectations and challenges

to discuss how each business is performing, which fundamentally reflects how customers view the life insurance
business, using objective data. That said, the next step
is not just about analyzing objective data—the Company
must look at how it can change the allocation of management resources based on that data. Only then will it be ameaningful assessment. As the Group Long-Term Visioncontinues to take shape, the allocation of management
resources must be carried out decisively.

Ohgo
I think the idea of using ROE to assess the various businesses has gradually gained traction in the Group. In
the past it was common practice to analyze the three life
insurance companies from a qualitative point of view, but
now I think the Company is finally in a position to be able

T&D Holdings |70| Integrated Report 2022

T&D Holdings |71| Integrated Report 2022

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

Higaki

YamadaThis is my fifth year as an outside director at the Company. In my first two years, T&D Holdings appeared to do
nothing more than just tabulate Group company earnings. My impression is that things only started to happen
in the last two years from 2020 when discussions about
formulating the Group Long-Term Vision got underway.
As Mr. Ohgo mentioned, I get the feeling that the Company has just started to discuss business performancewith the use of key metrics like ROE in the past 12 months
or so. Even though the Company was aware of what it had
to do for the purpose of achieving growth of the Group, it
used to have a strong tendency to do only what it could.
So, the key point now is whether or not the Company canaccomplish the goals set out in the Group Long-Term
Vision. The role of the holding company is to press onwith reforms while managing the interests of each Group
company, but somehow the reforms have not proceeded
well. Be that as it may, finding ways to solve the issue oflittle progress made on reforms thus far will present thebiggest challenge for the Group this year.

In fiscal 2021, the first year of the Group Long-Term Vision
after it was formulated in May last year, earnings decreased year on year due to the impact of reinsuring theblocks of Taiyo Life policies in force, as well as the booking of a valuation loss related to Fortitude reflecting higher long-term interest rates in the US. Given that we are inan age of volatility, uncertainty, complexity, and ambiguity, or VUCA, our job is to look ahead five years from now
and analyze trends to see whether the Group is headingin the direction of sustainable growth. In that sense, I think
the four financial KPIs and the three non-financial KPIs targeted in the Group Long-Term Vision collectively convey avery easy-to-understand message to outside the Company.
The financial KPIs are based on either financial accounting
or economic value. The economic value-based KPIs currently remain firm. But as I just mentioned, the Company’s
financial accounts were impacted by extraordinary factors last fiscal year, dragging earnings below year-earlier
levels. I believe shoring up the financial accounts will be
key because the level of returns the Company can extend
to shareholders is restricted by its financial results. Morespecifically, investors are expecting the Company to aptly
and proactively circulate the Group’s capital throughout
the Group by, for example, investing in growing sectors
like Fortitude.

Watanabe
I believe “awareness” is key to the Group Long-Term
Vision. For example, when the Group Long-Term Vision is
being discussed at Board meetings, we as outside directors can sense when there is a change in the awareness of
issues among officers. Going forward, I hope to be able
confirm whether the awareness of issues has permeatedto other areas of the Company by meeting with front-line
managers and the like.

Taishido
I was only appointed to the Board of Directors from thisfiscal year, so I have had no involvement in the formulation of the Group Long-Term Vision, but going forward, as

Try & Discover for
Creation of
Shared Value

Further Advancementof Capital and Risk
Management

Corporate
Governance—— Taishido

a member of the Board I intend to monitor the progressof the Company’s financial KPIs, including capital efficiency. I have learnt that the non-financial KPIs of customer
satisfaction and employee satisfaction have improved.
The non-financial KPIs that underpin corporate growth
are also of extreme importance, so I will be watching how
things develop with much anticipation. I believe gaining
the trust of customers through the provision of meticulous service is the cornerstone of business and I intend
to closely observe whether the Group has establishedworkplace environments where its employees can workwith enthusiasm, take pride in their work, and embracechallenges in keeping with the “Try & Discover” motto of
the Company’s corporate philosophy.

The most significant challenge is how best to
intensively allocate, including from an ROE
perspective, the management resources
accumulated at Taiyo Life and Daido Life to
new businesses.

I’m extremely skeptical about whether having both Taiyo
Life and T&D Financial Life conduct the OTC sales business at banks is really the proper course of action in theGroup Long-Term Vision that seeks to enhance capitalefficiency. There is still much to be discussed before wefind an answer to this, but considering that the operating
environment is changing at a dizzying pace, there is notenough time for lengthy discussions on the matter, which
is why I feel that the time is approaching for the Company
to make a bold decision.

—— Higaki

Higakiporations after demutualizing, they must tackle the mostimportant task of enhancing capital efficiency and figuring out how to raise dividend resources. However, as for
T&D Insurance Group, I feel very alarmed about the factthat the corporate culture from the days of the mutualcompanies still remains, even though the Group is finallymoving forward in terms of living up to its “Try & Discover” slogan. I have raised this concern over and over again
at the meetings of the Board of Directors and the Audit
and Supervisory Board. This problem must be cleared
up if the stock market is to hold a favorable view of the
T&D Insurance Group. Recent efforts to finally develop
new business lines and generate resources for dividends
are a positive development and certainly commendable.
However, the most significant challenge is how best to
intensively allocate, including from an ROE perspective,
the management resources accumulated at Taiyo Lifeand Daido Life to new businesses. With that in mind, I
think there is tremendous significance in transforming themindset of both Taiyo Life and Daido Life going forward.

Improvements in the effectiveness of
the Board of Directors
Watanabe
Although it depends on the subject, I feel it’s importantthat we, as outside directors, exchange opinions witheach other to help facilitate Board meeting discussions.
Expressing opinions from our own point of view is ourbasic role, but it would be valuable to have more opportunities in the future to hear each other’s ideas throughThis is something that has been a topic of discussion overthe last two years. Insurance companies were originallymutual companies, so for them to survive as listed cor-

72

| Integrated Report 2022

Supplementary Materials
and Corporate Data

As a member of the Board, I intend to closely monitor
not just financial KPIs, including capital efficiency,
but progress made on the non-financial KPIs that
underpin corporate growth, such as customer andemployee satisfaction.

Ohgo

T&D Holdings |T&D Insurance Group’s
Business

T&D Holdings |73| 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
Governancewe create a culture of disclosing actual business circumstances, including inconvenient truths, in order to properly discuss them.

—— Ohgoare many points of concern. Specifically, I feel there to be
many agenda topics that we don’t discuss enough. These
proposals are basically resolved unanimously with everyone from each Group company agreeing in the absenceof any conflicts. I wonder if this is alright, because I get
the feeling something is fundamentally wrong with thisprocess. In terms of a solution to this problem, unlessthe outside directors specify the agenda items for Board
meetings, the Board will struggle to engage in material
discussions. I intend to proactively make suggestions on
specific agenda items to be discussed at the Nomination
and Compensation Committee or at other meetings going forward. We can then take discussions forward in lightof opinions in favor for, or against, the proposal. Given
that this is how a Board of Directors should normally function, I certainly hope we can break free of the situation
where all agenda items are always approved unanimously.

dialogue. At the same time, I think it’s crucial that we
communicate closely with the execution side of theCompany, which is why I try to be keenly aware of working
towards the same goals with a sense of understanding of
the execution side so that my suggestions and advice cantrickle down to the Company’s field levels.

Taishido
I feel that the integrated Group management is a major
challenge. Considering that by tradition the Group’s
subsidiaries have a lot of clout, I have come to recognizethat it will be quite a task for the Board of Directors tooversee the Group from an overall perspective. I intend tooffer my advice from the viewpoint of how best to engage
in discussions about total optimization, including the
optimal deployment of Group resources and personnel.
Also, as a general observation, I have noticed that outside
directors with wide-ranging experience and knowledge
quite often voice their opinions without offering any
concrete solutions. It is important that the Board closely
examines which management issues are of top priority for
the Company and unceasingly checks if the Company iscontinuously implementing consistent measures to address them or not. From that standpoint, having a sharedawareness of what the issues are is key, which is why I
think it’s really important for us outside directors to talk toeach other and share our awareness. I’m looking forward
to such opportunities in the future.

HigakiI completely agree with Mr. Ohgo. As outside directors,
we should inform the Company’s execution side of the
topics that should be discussed throughout the year, andI would like to see the Board take enough time to discuss
them. I serve as chairperson of the Audit and Supervisory
Board, so I also intend to discuss the same issues there.
Another thing I should mention is that it’s worth establishing a system under which the Company’s execution side
can lay bare various issues for discussion without hiding
anything. One role of the Board of Directors is to check
whether the Company possesses a sound awareness ofrisk. It’s been said that corporate governance rests on acompany’s outside directors, so I think it’s imperative thatOhgo
If you were to ask me whether the Board is truly functioning effectively, I would have to be honest and say there

T&D Holdings |74| Integrated Report 2022

The transition to a company with an Audit and Supervisory Board has led to stronger corporate governance because audit and supervisory functions are being executedfrom the standpoint of the Company’s directors. Even
though we five outside directors are inherently different
from each other, I would like to see more opportunities
for discussion on a regular basis because we can pool ourcollective knowledge on those occasions. On top of that,
I think it’s key that we all attend Board meetings with thesame information on hand.
One role of T&D Holdings, as a listed company, is totake responsibility for disclosing financial results to the
public. The Company has a system for evaluating theperformance of operating companies. And based on theevaluation results of the extraordinary factors such as Taiyo Life’s reinsurance, the Board of Directors discussed andmade some final adjustments. As the framework of theperformance evaluation system—which is basically akinto a report card for each operating company—has beenused since the Group Long-Term Vision was launched infiscal 2021, I think it should probably remain in its current
format during the period of the Long-Term Vision. Goingforward, these are the kinds of issues we outside directors
hope to discuss among ourselves before deliberating onthem at Board meetings.
As a pure holding company, T&D Holdings must
demonstrate its leadership despite having a limited number of employees, which is precisely why I think it needs
to work harder to raise the level of awareness of theGroup’s brand. Both Taiyo Life and Daido Life have beenaround for more than a century and their brand names area valuable part of their business operations, but from theGroup’s perspective, it’s disappointing that the unifying
force of those brands is not visible yet.

YamadaOf the non-financial KPIs, I think employee satisfaction
at a life insurance company is different from that of an
ordinary company. There are traditionally two types of
employment at a life insurer—administrative personnel
and sales representative—so consideration must beafforded to both. Particularly for sales representatives,
the COVID-19 pandemic forced changes in the way theywork, so we need to think how to support them attentively from the standpoint of the execution side. I intend
to look at how other industries have gone about instigating workstyle reforms and present my opinions from athird-party perspective with regard to what I think is thebest model for a life insurance company. Also, because
the relationship between the Company and each life insurance policyholder tends to be long, the policyholders
usually look for the stability of the Group. On the other
hand, the Company’s shareholders harbor expectations
for growth from a sustainability point of view. Althoughstriking the right balance between stability and growthpotential is difficult, I intend to be outspoken with mycomments so that the T&D Insurance Group can continue
to win as many fans as possible as a group endowed withintegrity.

Watanabe
I intend to communicate deeply from multiple angles
with the other outside directors, and with the Company’s
execution side. In addition, if I were to broach the topic
of compliance again, once a scandal breaks, the damages
to the Company will be significant and recovering fromsuch an incident will take a lot of time and effort, not tomention that restoring the credibility of the Group’s brandwill be extremely difficult. For these reasons, I believe wecan contribute to enhancing corporate value by checking,from an outsider’s point of view, whether any root causesof misconduct have become entrenched in the corporate
climate or culture and whether the Company’s execution

How to fulfill the role as an outside director witha view to enhancing corporate value
HigakiI observed many different corporations in my time as abanker, so I believe I can be supportive of non-insurance
businesses and those on the fringes of the insurance industry. Looking at the people that work at insurance companies sheltered by regulations, many of them appear to

T&D Holdings |Supplementary Materials
and Corporate Data

have little understanding of business outside of insurance.
I hope to play my role of enhancing the Group’s corporate
value by steadily offering advice and opinions about thebusiness world. From my experience as a banker, I know
fully well that companies in regulated industry sectors arenothing like ordinary business corporations. I hope to beable to utilize my knowledge of various case examples inany capacity possible. I believe that will be in line with the“Try & Discover” motto and should help to improve theGroup’s overall corporate value.

YamadaI intend to proactively make suggestions on
specific agenda items to be discussed at
the Nomination and Compensation Committee orat other meetings.

T&D Insurance Group’s
Business

75| Integrated Report 2022

Working toward the T&D
Insurance Group’s Vision
for Societyside is analyzing such causes and employing measures toprevent them from reoccurring.

and the like, I have personally experienced a lot of adversity over the past five years or so to start a new business,so I would like to convey “how to uncover new value” tothe Company. I also think it’s important to build a management team. The Company’s current officers are moreor less the representatives of the Group’s core companies,
but I hope to contribute to the building of a management
team that can truly take on the responsibility of allottingroles by discussing the issue with the Nomination andCompensation Committee and then at Board meetings.

Taishido
Governance comes in two forms: proactive and defensive. It’s difficult for just one person to implement both.
Passion can sometimes plunge people forward. As such,someone must have their foot on the accelerator, whilesomeone else must control the brake. As a lawyer, compliance and risk management, or defensive governance, is
my field of expertise. Defensive governance is not supposed to shackle the company. Rather, it encourages appropriate risk taking by the management team and supports the sound growth of the group. I hope to contributeto the achievement of the Group’s sound growth throughmy participation at the meetings of the Board of Directors
and the Audit and Supervisory Board. I also think one of
our roles as outside directors is to make sure there areno situations where common practices of the Company
are considered unthinkable in society. I have experienced
many cases where a company’s unique culture leads tobiased decision making, despite the best efforts of the
management team to run the company judiciously. I hope
to contribute with an outsider’s perspective, in order toensure that no issues society would likely disapprove of
have occurred.

Further Advancementof Capital and Risk
Management

Corporate
Governance

T&D Insurance Group’s
Business

Supplementary Materials
and Corporate Data

We will endeavor to create opportunities forconstructive dialogue by disclosing as muchaccurate information as possible throughIR and SR activities.

—— Yamada

Message to stakeholders
Watanabe
Considering that the Company has made the decision tobe publicly listed and seek growth on the stock market,
it’s important that it continues to pursue bold reforms as
outlined in the Group Long-Term Vision. Also, employees
are the driving force of corporate growth, and they are
doing their utmost to live their happy lives. That, I think,will give rise to exceptional services. In terms of stakeholders, the management team developing an environment in which employees can work comfortably and withenthusiasm will be key.

Taishido
The Company is calling for the creation of shared value
and I take the message of pursuing both financial value
and social value very positively. To achieve this, the Company will have to deliver benefits to customers with mainly
insurance products that help solve social issues in keep-

Ohgo
As I have worked as a consultant, I first would like talk to
the Company about strategic matters and the rearrangement of its business portfolio. As for digital businesses

Considering that the Company has made the decision
to be publicly listed and seek growth on thestock market, it’s important that it continues to pursue
bold reforms as outlined in the Group Long-Term Vision.

—— Watanabe

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

76| Integrated Report 2022

ing with the needs of the times and give its employees
every opportunity to take pride in their work and achieveself-fulfillment by taking part in activities that contribute to society. These are the kinds of activities that canboost earnings and prompt the capital markets to view
the Company in a favorable light. In this ideal scenario, avirtuous cycle emerges in which each stakeholder of theCompany will benefit. As an outside director, I will makeevery effort to contribute as much as possible to the realization of this ideal.

ees, and even society. From that point of view, it is regretful that the Company’s management is not yet reachingits maximum potential, so as an outside director I intend
to play my role shrewdly. In various aspects, how profit isgenerated, for example, is just as important as superficial
results, in my view. I hope to help bring the Company’s
management to a higher level to earn a passing scorefrom all stakeholders.

YamadaI believe the Group is addressing accountability in an extremely proactive manner. Given its many stakeholders, I
commend its efforts to disclose financial and non-financial
information in a timely manner on multiple fronts. For example, two years ago it started disclosing its annual securities report ahead of its shareholder meetings. There arestill few companies that do this. The Company has started
doing this relatively early and I think it is commendable
that it releases documents legally required to be disclosed ahead of shareholder meetings. We will endeavor
to create opportunities for constructive dialogue by disclosing as much accurate information as possible throughIR and SR activities, so your continued support will bemuch appreciated.

Ohgo
How well the Company can fulfill its obligations to customers and shareholders is probably key. When I look at theGroup, I get the feeling it’s still spending a lot of time andenergy on sorting things out internally. The Group’s biggest challenge is whether it can reach a stage where it canboldly destroy what it has built thus far for the sake of its
customers and shareholders. Accordingly, I intend to give
advice to the Company’s execution side and officers on
how our customers and shareholders view the Company.

Higaki
The Company must practice a management approachthat brings out the best result for all stakeholders. That
goes for shareholders, policyholders, customers, employ-

T&D Holdings |77| 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

Corporate GovernanceT&D Holdings has been enhancing its corporate governance by using a basic approach that involves creating efficientand transparent management systems to facilitate flexible and cohesive group operations.
The Company values the purport of the Japan’s Corporate Governance Code, which applies to listed companies,
and, in addition to accepting all the code’s principles, we have established the Basic Policy on Corporate Governanceas an initiative in response to its major principles.
Please refer to the Company’s website for more details of the Basic Policy on Corporate Governance.

https://www.td-holdings.co.jp/en/company/governance/

Corporate Governance Framework
1

Shareholders’ Meeting

Appointment
Dismissal

Nomination andCompensation Committee

Reporting

ReportingBoard of Directors

2

Offering opinions

Auditing,
etc.

Reporting

Audit andSupervisory Board

3

Group Compliance Committee

Assess the relevanceof the financial audit

Audit and Supervisory Board Office

PresidentGroup SDGs Committee

Cooperating

Reporting

6

Independent Auditor

Instruction

ReportingGroup ERM Committee

4

Appointment
Dismissal

Appointment
Dismissal

Instruction

Executive Management Board

5

Group Strategy Board

Group Risk Management Committee

External auditing

Group Management
Promotion Committee
Group DX Promotion Committee
Organizational UnitsGroup
Planning
Department

Financial
Strategy
Department

1 	Shareholders’Meeting2

Board of Directors

3 	Audit andSupervisory Board

4 	Executive

Management
Board

Business
Development
Department

Accounting
Department

Sustainability
Promotion
Department

PublicRelations
Department

GeneralAffairs
Department

Risk
Management
Department

Internal
auditing

Internal Auditing
Department

The Shareholders’ Meeting is the highest decision-making entity of the Company. At the meeting, reports are made on the Group’sbusiness and consolidated/non-consolidated financial statements, and resolutions are made on important issues, which are stipulated
in laws and ordinances and the Articles of Incorporation, such as the appropriation of retained earnings and election of officers. The
Ordinary General Meeting of Shareholders is held once a year.
The Board of Directors is composed of all directors and makes important management decisions while overseeing the execution ofbusiness in accordance with laws and ordinances, the Articles of Incorporation, and the Company’s relevant rules. In addition, as acompany with an Audit and Supervisory Board, some important business execution decisions are delegated from the Board of Directors
to the directors themselves by resolution of the Board of Directors in accordance with the provisions of the Articles of Incorporation.
The Audit and Supervisory Board is composed of Audit and Supervisory Board members, the majority of whom are outside directors. As
an independent body entrusted by the Company’s shareholders, the Audit and Supervisory Board fulfills its roles and responsibilities,
including auditing the execution of duties by directors (excluding directors serving as Audit and Supervisory Board members) inaccordance with laws and ordinances, the Articles of Incorporation, and the Company’s relevant rules.

The Group Strategy Board deliberates on items mainly concerning Group growth strategies and important matters pertaining to those
items from a Group-wide perspective in order to achieve sustained improvement in the Group’s corporate value.

Committees

Committees discuss management-related strategies and issues of the Company or those common to the Group.

6 	Information related

to the Independent
Auditor (FY2021)

As a holding company, T&D Holdings is responsible for making
decisions on Group strategies, allocating Group management
resources appropriately, and formulating capital strategies.
Along with this, the Company accurately grasps the management risks faced by its six Group companies, including Taiyo
Life Insurance Company, Daido Life Insurance Company, andT&D Financial Life Insurance Company (the “three life insurancecompanies”) in particular as well as T&D United Capital, T&D
Asset Management, and Pet & Family Insurance (the “directly
owned subsidiaries”) and works to build a Group business man-agement system that ensures thorough risk-return management
for the Group as a whole.
Meanwhile, the directly owned subsidiaries, with their own
unique business strategies, aim to expand the Group’s corporate value by maximizing their uniqueness and specialization
through determining marketing strategies and operating businesses in line with their strengths.
In this way, the Group is promoting overall management byclarifying the respective roles and responsibilities of the Company and its directly owned subsidiaries.

Corporate Governance System
Our Board of Directors oversees important management decisions and business execution, while our Audit and Supervisory
Board—which is independent of the Board of Directors—conducts audits that cover the performance of duties by our directors, etc.
In addition, we have introduced an executive officer system
to enhance our business execution ability, and we are striving
to clarify oversight and execution responsibilities in order toenhance the governance functions of the Board of Directors.
We have also established the Nomination and Compensation
Committee as an advisory body to the Board of Directors inorder to deliberate on the fairness and appropriateness of theappointment, dismissal, and compensation of officers (including
succession planning) as well as to ensure the transparency ofmanagement and improve accountability.
In addition, we have established the Executive Management Board to deliberate on important matters related to the
management of both the Company and the Group and topass associated resolutions. In parallel with this, we have alsoestablished the Group Strategy Board to deliberate on important matters mainly concerning Group growth strategies andimportant matters pertaining to those items from a Group-wide
perspective in order to achieve sustained improvement in theGroup’s corporate value.

Composition of Directors and the Board of Directors
The number of directors (excluding directors who are Audit
and Supervisory Board members) of the Company shall be no
more than nine, and the number of directors who are Audit
and Supervisory Board members shall be no more than five, as
stipulated by the Articles of Incorporation. The Board of Directors is made up of individuals representing a balance of knowledge, experience, and skills, and having diverse backgrounds
as befitting the expansive range of business domains in the life
insurance business, which is the core business of the Group.
Moreover, the Company appoints two or more directors(excluding directors who are Audit and Supervisory Board mem-bers) who concurrently serve at the Company and its directly
owned subsidiaries. This shall be done from the standpoint offacilitating adequate communication and rapid decision making
within the Group while bolstering Group-wide governance.
Furthermore, the Company appoints five outside directors toappropriately apply the opinions of individuals with extensive
experience and knowledge in their capacity as outside corporate managers, legal experts, accounting specialists, and soforth to the Group’s management policies and development ofinternal controls and other systems as well as to the oversight ofthe execution of business.

Shareholders’ Meeting
InsideOutsideAppointment, Dismissal

Appointment, Dismissal

Board of Directors (5 Outside Directors among 12 Directors)

Audit and Supervisory Board(3 Outside Directors among 5 Board Members)

The Executive Management Board deliberates and passes resolutions on important matters concerning the Company’s management
and the corporate management of the Group.

Board

5 	Group Strategy

Promoting Group Management

Category

Remuneration for audit certification services (¥ millions)

Remuneration for non-audit certification services (¥ millions)

199

6

Consolidated subsidiaries

231

15

Total

431

21

Submitting company

T&D Holdings |78| Integrated Report 2022

Composition of the Audit and Supervisory Board
The number of Audit and Supervisory Board members of
the Company is limited to five as stipulated in the Articles ofIncorporation, and the majority of them are outside Audit andSupervisory Board members. In addition, members include
T&D Holdings |persons with appropriate knowledge of finance and accounting.
The Audit and Supervisory Board consists of all the Audit andSupervisory Board members.

79| Integrated Report 2022

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

Details of discussions at the Board of Directors meeting

TOPIC

As a company with an Audit and Supervisory Board, we delegate some important business execution decisions from theBoard of Directors to the directors by resolution of the Board of
Directors pursuant to the provisions of the Articles of Incorporation. By doing so, the Company aims to separate management
and oversight from business execution and further strengthen

the management functions (deciding on management policies
and overall strategy) and oversight functions of the Board of
Directors. The Board of Directors is now able to allocate moretime to the deliberation of important agenda items such as theGroup’s management policies and overall strategy.

Key themes discussed at the fiscal 2021 Board of Directors meeting
Management Strategy and
Growth Strategy
Finance and AccountSettlement• Formulation and monitoring of the Group Long-Term Vision• Planning and monitoring of investment in new businesses• Monitoring and future planning of subsidiary businesses• Sustainability initiatives• Revision of the Basic Group Policy on Human Resources• Review of strategic shareholdings and the reduction policy and plans• Formulation of the Group Digital Vision• Budget planning and monitoring• Verification of appropriateness of financial results

Shareholder Returns and• Dividends and share buybacks
Dialogue with Shareholders
GovernanceRisk Management• Status of investor relations and shareholder relations activities• Formulation of operating policies for Shareholders’ Meeting• Matters related to officers (selection of representative directors,
appointment of officers of directly owned subsidiaries, etc.)• Evaluation of the effectiveness of the Board of Directors• Summary of discussions of the Nomination and Compensation
Committee• Impact of the spread of COVID-19 and countermeasures• Operating status of the internal control system• Internal audit policy and verification of results• Compliance status of the Group

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

Discussions with outside directors

1. Information communicated by outside directors

since the beginning of the COVID-19 pandemic.
As described above, our outside directors represent ourshareholders from an independent position, and they maintain asuitable level of tension with and distance from our internal directors as they strive to achieve communication suitable for helping
to further improve the oversight functions and effectiveness of
our Board of Directors while also facilitating the growth of theCompany and improving our corporate value.

Our outside directors offer effective, unreserved communicationand opinions related to risks based on their big-picture understanding of the Group’s management issues and changes in theinternal and external environment. More specifically, they help
us to utilize the Group’s management resources more efficiently,
build and develop more suitable management and oversightsystems for our business investment targets, etc.
When we formulated the Group Long-Term Vision for fiscal
2021, our outside directors communicated information based on
the perspectives of ordinary business companies and expressedvaluable opinions regarding the necessity to create new sourcesof revenue in order to provide value to our shareholders andpursue independent initiatives aimed at the resolution of issues
that became apparent during dialogues with society and investors
and must be addressed to further improve the governance of theGroup as a whole.
Regarding the SDG’s “good health and well-being,” our outside
directors express their opinions regarding how our sales systems
should be as well as how to develop work environments tofacilitate remote work, etc. from the perspective of managing thesafety and preventing the infection of our customers—especiallypolicyholders—and our employees, and they provided such advice

2. Meetings with outside directors
We hold the following meetings to improve the effectiveness of
the Board of Directors and flesh out its discussions.
Advance Board of
Directors explanations

We hold advance explanations and Q&A
sessions for outside directors in relation
to important agenda items, etc.

Discussion sessions
between Audit andSupervisory Board
members and outside
directors

We hold discussion sessions intended
to give our Audit and Supervisory Board
members and outside directors (excluding Audit and Supervisory Board members) the opportunity to share information on management issues, risks facedby the Company, etc.

Effectiveness Evaluation of the Board of Directors
To ensure the effectiveness of the Board of Directors as a whole(including the voluntary Nomination and Compensation Committee), the Company conducts an annual performance reviewof the Board of Directors as a whole based on the self-evaluations of individual directors. The performance review examines
whether the Board of Directors is functioning appropriately
and producing results, and how the Board of Directors is con-tributing to increasing the Company’s corporate value over the
medium to long term. In addition, in fiscal 2021, we also had
an independent institution conduct a performance review toensure objectivity and transparency. Based on this effectivenessevaluation, we will work on further enhancing the oversightfunctions and the decision-making process of the Board of
Directors.

Summary of the evaluation of the effectiveness of the Board of Directors as a whole in fiscal 2021
1. Evaluation procedures

Based on a questionnaire (self-evaluation) targeting directors—which was anonymously conducted by an independent institution in orderto ensure objectivity and transparency—as well as interviews, we analyzed and evaluated the overall effectiveness of the Board of Directors(including the voluntary Nomination and Compensation Committee) in fiscal 2021.

2. Evaluation method• Regarding the questionnaire items below, we checked the effectiveness based on responses to multiple-choice questions as well as essay-style feedback.
The (1) composition of the Board of Directors, (2) operations of the Board of Directors, (3) discussions by the Board of Directors (management
functions), (4) oversight functions of the Board of Directors, and (5) the performance of the Board of Directors.
• Through interviews, we confirmed the evaluation judgement basis of the questionnaire responses as well as issues of the Board of Directors.

3. Overall assessment

Based on the results of our analysis and evaluation, we confirmed the items below and therefore determined that the Board of Directors ismore or less functioning effectively in terms of its expected role.
• The composition of the Board of Directors is diverse.
• During the process leading up to a discussion by the Board of Directors, advance explanations and other suitable information are provided.
• The proceedings and agenda item selection of the Board of Directors are suitable.
• Discussions proceed based on an awareness of the business portfolio and capital costs.
• There is sufficient feedback related to the details of dialogues with investors.

4. Improvement status ofissues recognized in theprevious evaluation

We recognize that steps and steady improvements have been made in relation to issues recognized during the fiscal 2020 evaluation (enhancing the functions of the Nomination and Compensation Committee, considering the composition of the members of the Board of Directors,
creating/devising easy-to-understand materials, achieving more efficient operations of the Board of Directors, etc.).

5. Issues and initiatives
going forward

We have confirmed that there is still room for improvement in terms of fleshing out and deepening discussions concerning the Group’s management strategy, further promoting integrated Group management, and organizing/creating materials that briefly summarize discussion points tofacilitate better discussions by the Board of Directors.
By responding to issues identified as a result of our effectiveness evaluation, we will continue striving to improve the effectiveness of the Boardof Directors.
T&D Holdings |80| Integrated Report 2022

Nomination and Compensation Committee
The Nomination and Compensation Committee was established in January of 2015 as a voluntary advisory body to theBoard of Directors to deliberate on the fairness and appropriateness of the appointment, dismissal, and compensation of
officers (including succession planning) as well as to strengthen
the corporate governance system of the Company and theGroup by ensuring the transparency of management and en-

hancing accountability.
The Committee consists of the President and at least threeoutside directors, and the majority of the members are assigned
from among outside directors to enhance independence,
objectivity, and accountability. Furthermore, the chair of theCommittee is chosen from among outside directors based on amutual vote of the Committee’s members.

Nomination and Compensation Committee — Main topics of discussion/reporting in fiscal 2021
1st

• Utilization of the Board of Directors skills matrix

2nd• Selection and appointment of director candidates not serving as Audit and Supervisory Board members as well as director candidates serving as substitute Audit andSupervisory Board members• Selection and appointment of director candidates and Audit & Supervisory Board member candidates at directly owned subsidiaries• Selection of outside directors to serve on the Nomination and Compensation Committee

3rd• Results of the fiscal 2020 evaluation of directors and executive officers• Results of the fiscal 2020 evaluation of representative directors of directly owned subsidiaries

4th• Selection of the chair of the Nomination and Compensation Committee

5th• Consideration of the trust-type stock compensation system

6th• Succession plan

7th

• Consideration of the officer appointment process

8th• Reviews of succession plan operations

9th• Succession plan

10th

• Consideration of the officer appointment process

11th• Consideration of the officer appointment process

12th• Selection and appointment of executive officers• Selection and appointment of executive officers at directly owned subsidiaries

13th• Certain changes to the Articles of Incorporation• Formulation of Group management personnel training programs

T&D Holdings |81| Integrated Report 2022

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

Board of Directors Skills Matrix
The Company will ensure a balance of the necessary expertiseand experience in terms of the three main functions of theBoard of Directors (the overall strategy formulation, oversight,
and business management functions) to enable the Board of
Directors to perform its functions more effectively.
The Company ensures a balance of expertise and experience

Name

Outside directors

Naoki Ohgo

Director

Kensaku Watanabe

Director

Seiji Higaki
Shinnosuke Yamada
Atsuko Taishido

Name

Hirohisa UeharaInternal directors

Kanaya Morinaka
Masahiko Moriyama

Nomination andCompensation
Committee

Position at the Company

on the Board of Directors as a whole. For this reason, we selectand appoint outside directors who have experience in corporate
management, finance, legal affairs, and other areas outside theGroup, and we appoint internal directors who have expertiseand experience appropriate to the broad business domains of
the life insurance business, which is the Group’s core business.
Expertise and experience particularly anticipatedCorporate management

Capital and financial
markets

Finance and accounting

Legal affairs and risk
management

Try & Discover for
Creation of
Shared Value

Further Advancementof Capital and Risk
Management

Corporate
GovernanceNomination andCompensation
Committee

Position at the Company

Expertise and experience particularly anticipated
Planning andbusiness strategy

Sales andmarketingAsset management

Finance andaccounting

Legal affairs and risk
management

Representative Director andPresident
Representative Director andExecutive Vice President
Director and Senior Managing
Executive Officer

Calculation method
Assessmentof Company
performance•To clarify the assessment according to how much progress has been made on achieving Company targets, total shareholder return(TSR) is used as a benchmark to assess the Company’s performance, alongside a number of other performance indicators based on
the Company’s medium- to long-term management strategy.
•For performance indicators, a coefficient according to the achievement rate for each item is multiplied to yield a score.

Evaluation of thedivision the officer
is in charge of•A score is calculated for each division based on how much progress has been made on the achievement of the execution plan for thedivision the officer is in charge of.

performance assessment is 100%.
The individual evaluations of each officer, as calculated
above, are discussed by the Nomination and Compensation
Committee and finalized by the Director and President following consultation with the representative directors.

Key performance indicators of Company performance evaluations (FY 2021)
1. Single-year evaluation items
The achievement ratios of single-year targets are evaluated to help achieve our fiscal 2025 targets.
Fiscal 2025 target
Group adjusted profit¥130 billion

Value of new business¥200 billion

Naoki Soejima

Director

Single-year target

ActualMutsurou Kitahara

Director

Group adjusted profit¥73 billion¥39.2 billion

53.7%

Director (Full-time Audit andSupervisory Board Member)
Director (Full-time Audit andSupervisory Board Member)

Value of new business¥147.1 billion¥166.9 billion

113.5%

Takashi Ikawa
Takashi Tojyo

Supplementary Materials
and Corporate Data

Individual officer evaluations
Individual evaluations of officers are based on an assessment of the Company’s performance and an evaluation of the division theofficer is in charge of, in accordance with the evaluation criteria decided on by the Board of Directors, the Nomination and Compensation Committee deliberates on these evaluations, and the Director and President determines the results after consultation with therepresentative directors.

The evaluation weightings of the Company performance assessment and the evaluation of the division the officer is in chargeof are set according to the responsibilities of each officer inaccordance with the criteria established by the Board of Directors and used to compute a weighted average. Note that the
representative director’s evaluation weighting for the Company

Director (Audit and Supervisory
Board Member)
Director (Audit and Supervisory
Board Member)
Director (Audit and Supervisory
Board Member)

T&D Insurance Group’s
Business* The Company intends to utilize knowledge from outside the Company through such initiatives as inviting talent with expertise and experience in areas other than the above to advisory committees ineach field (e.g. digital and SDGs), which will be established as necessary.

Achievement ratio

2. Medium- to long-term evaluation items
The progress is evaluated as evaluation criteria to help achieve our fiscal 2025 targets.
Fiscal 2025 targets

Determination of compensation
Policies on determining compensation
The Company’s policy on executive compensation is set out in our Basic Policy on Corporate Governance.

Adjusted ROE

8.0%

ROEV

7.5%

Our actual ROE is 2.7%, while our actual ROEV is 7.0%.

3. Market evaluation items

Composition of executive compensation
Our executive compensation system is designed to function asa sound incentive geared towards boosting the Group’s medium- to long-term earnings and enhancing corporate value.
Compensation for directors (excluding outside directors,
part-time directors, and directors serving as Audit and Supervisory Board members) has three components: (1) monthly

compensation, (2) bonuses, and (3) trust-type stock compensation (non-residents of Japan are excluded). Both (1) and (2) varydepending on role and performance, while (3) utilizes a trust
scheme. Compensation for part-time directors and directors
serving as Audit and Supervisory Board members, including
outside directors, is comprised of monthly fixed compensation.

Monthly compensation and bonuses

Trust-type stock compensation

Evaluation criteria, etc.
TSR

The TSR* score is calculated based on the rate of divergence between the Company’s figure and those of listed life insurancecompanies set as the benchmark. * TSR: total shareholder return

The actual TSR performance is 117.4% over five years.
Note: The TSR is calculated as described below.
• Five years: (share price on the last day of fiscal 2021 + total dividend amount per share for the period from fiscal 2017 to fiscal 2021) / share price on the last day of fiscal 2016

4. ESG evaluation items
In addition to the financial performance indicators above, the non-financial performance indicators below are also evaluated.
Evaluation criteria, etc.
Customer satisfaction
Employee satisfaction

Variable according to roles andbusiness performance

Linked to the Company’s share price

The Board of Directors has adopted a resolution indicating that the amount of monthly
compensation and bonuses are set within the amount determined in accordance with aresolution of the Shareholders’ Meeting, based on the compensation table determined by the
Board of Directors and the amount calculated based on individual officer evaluations, and are
finalized by the Director and President after consultation with the representative directors.

• A compensation system that can work as an incentive for the Group to enhance its businessperformance and corporate value over the medium to long term, and to promote the sharingof an awareness of common interests with shareholders.
• Stock and cash are delivered based on the number of points granted, commensurate withexecutive ranking, within the limit established by the resolution of the Shareholders’ Meeting.

T&D Holdings |82| Integrated Report 2022

The achievement situation is evaluated by using the levels of the previous fiscal year as evaluation criteria.

CO2 emission reduction
In terms of our actual customer satisfaction and employee satisfaction, we have reached or exceeded the levels for the previous fiscal year. In addition, we have reduced our CO2
emissions by 1.3% compared to last year.

T&D Holdings |83| 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

Trust-type stock compensation

10% to 22%

Payment ratios by type of compensation
In terms of our compensation structure for directors, we assign ratios to performance-linked
compensation (monthly and bonuses) and trust-type stock compensation so the system canfunction as a sound incentive geared towards boosting the Group’s medium- to long-term
earnings and enhancing corporate value.
For monthly compensation, the ratio fluctuates either negatively or positively by roughly
5% based on a standard assessment according to the individual officer evaluation. For bonuses, the ratio fluctuates either negatively or positively by roughly 40% based on a standard
assessment according to the individual officer evaluation.

Performance-linked compensation(bonuses)

14% to 21%

Performance-linked
compensation(monthly compensation)

57% to 74%

Total amounts of compensation by officer category and compensation type (FY 2021)
Monthly compensation
Category

Persons receiving
compensation

Directors not serving as Audit and Supervisory
Board members (excluding outside directors)
Directors serving as Audit and Supervisory Board
members (excluding outside directors)
Outside directors not serving as Audit andSupervisory Board members
Outside directors serving as Audit and Supervisory
Board members
Total

Trust-type stock compensation, theBoard Incentive Plan (BIP) Trust

Reserve for bonuses

Amount(¥ millions)

Persons receiving
compensation

Amount(¥ millions)

Persons receiving
compensation

Amount(¥ millions)

Total compensation
Persons receiving
compensation

Amount(¥ millions)

8

126

3

35

3

38

8

200

2

58

0

—

0

—

2

58

2

20

0

—

0

—

2

20

3

37

0

—

0

—

3

37

15

242

3

35

3

38

15

316

1. Monthly compensation and reserve for bonuses for directors (excluding part-time directors including outside directors, and directors serving as Audit and Supervisory Board
members) are performance-linked compensation, and trust-type stock compensation is non-monetary compensation. For directors not serving as Audit and Supervisory Board
members (excluding part-time directors including outside directors: four directors), the total amount of performance-linked compensation is ¥139 million, and the total amount of
non-monetary compensation is ¥38 million.
2. The number of persons receiving compensation and the amount of compensation shown above include those for three directors who retired at the conclusion of the 17th Ordinary
General Meeting of Shareholders held on June 25, 2021. As of March 31, 2022, the Company had seven directors not serving as Audit and Supervisory Board members and five
directors serving as Audit and Supervisory Board members.
3. The amount of trust-type stock compensation shows the recorded amount of expenses related to the points granted during the fiscal year ended March 31, 2022, based on theexecutive compensation system.
4. Compensation for individual officers is not stated because no officer received total consolidated compensation of ¥100 million or more.

Process for determining compensation
The Nomination and Compensation Committee discusses
important decisions and changes concerning benefits and thelike for officers of the Company and its directly owned subsidiaries, reports the results of those discussions to the Board of
Directors, and offers its opinions when necessary. For monthly

Risk Management
Integrated risk management (ERM)
The T&D Insurance Group has established the ERM structure tointegrally manage capital, profit, and risk in order to boost stable revenues while grasping the status of its risks and ensuring
management soundness.
Among them, the Group manages risks as follows.

Increasing
Corporate
Value

Int

 asic concept for risk management andBrisk management systems
At the T&D Insurance Group, T&D Holdings has formulated aGroup Risk Management Policy that sets forth the Group’s basic
approach to risk management and, based on this policy, its
directly owned subsidiaries have developed risk management
systems that cover their affiliates as well.
T&D Holdings has established a Group Risk Management
Committee and manages risks within the Group. The Committee receives reports, regularly and as required, on risks assessedusing uniform economic value-based risk management indicators, from the directly owned subsidiaries, in order to identify
and manage the various types of risks faced by the Group companies. Based on the report received, T&D Holdings reports onthese risks to the Board of Directors and provides guidance and

egrate d M an

m
age

en

t

CapitalRisk

Profitadvice to the directly owned subsidiaries as necessary, thereby
ensuring that proper risk control is implemented at each company and strengthening the risk management system for theentire Group.

compensation and bonuses, individual amounts are determinedin accordance with individual officer evaluations based on deliberations by the Nomination and Compensation Committee andthe compensation table decided on by the Board of Directors.
Board of Directors

Audit and Supervisory Board

Executive Management Board

Group Risk Management Committee

Appropriateness of compensation levels

Maximum amount of compensation for directors after the transition to a company with an Audit and Supervisory Board
The maximum amount of compensation for directors was determined at the 16th Ordinary General Meeting of Shareholders held on
June 25, 2020, as shown below.
Maximum amount of compensation

Directors not serving as Audit and Supervisory Board members
Outside directors included in the above
Directors serving as Audit and Supervisory Board members
Maximum amount of funds to be contributed to the trust for trust-type stock compensation (determined based on a resolution of theOrdinary General Meeting of Shareholders passed every three fiscal years)

Directors not serving as Audit and Supervisory Board members
Maximum total number of points to be granted under trust-type stock compensation

Directors not serving as Audit and Supervisory Board members

AmountNumber of persons*¥450 million per year

9

¥40 million per year

2¥150 million per year

5

AmountNumber of persons*¥500 million

4

PointsNumber of persons*

215,000 points per fiscal year

4

Risk Management Department

Deliberation and reporting

Guidance and advice

Pet & Family Insurance* Number of eligible directors as of the end of the 16th Ordinary General Meeting of Shareholders

T&D Holdings |84| Integrated Report 2022

T&D Holdings |85| Integrated Report 2022

Internal audits

The amount of compensation for directors is determined based on consideration of the responsibilities of directors as well as various other circumstances, such as the recent economic situation.
With regard to the level of compensation, the Company participates in several surveys on executive compensation conducted byexternal research organizations to verify the appropriateness.

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

Risk awareness and assessment (risk profiles)
The T&D Insurance Group uses risk profiles* to comprehensively
categorize risks surrounding the Group in order to respond toincreasingly diverse and complex risks. We comprehensively
identify risks, ascertain and assess them, and use them to prioritize initiatives in light of comprehensive factors that include
severity, impact, and the degree to which they are under control. The risks are reflected in management planning as neces-sary. As a rule, we review our risk profiles twice a year in order toaccurately recognize and ascertain emerging severe risks as wellas major changes to previously recognized risks and the gap
between in-house/ the industry’s customs and the world. We
report our findings to the Group Risk Management Committee
and the Board of Directors.
* Risk profiles are a general risk management tool to characterize risks in terms of various factors,
such as their nature and magnitude.

Risk classification and responses
The T&D Insurance Group classifies various management risks
as shown below, including disruption in financial markets, largescale disasters, pandemics, climate change, and cyber attacks.
Risk management policies have been established for each ofthese risks, and efforts are made to prevent these risks fromoccurring or to confine them within certain acceptable levels.
The risks we see as important in connection with our Group’sbusiness are as follows:

Examples ofefforts

Try & Discover for
Creation of
Shared Value

Further Advancementof Capital and Risk
Management

Corporate
GovernanceAction on integrated risk management
The Group categorizes and quantifies various risks that surroundthe Group and then controls them using the Economic Solvency
Ratio (ESR), a risk indicator based on economic value. It also
1. Risk quantification
The Group employs internal models to gauge investment risks,
insurance risks, and operational risks. Specifically, we use “value
at risk” as an indicator for these risks, and, with a measurement
period of one year and a confidence level of 99.5%, we calculate
the loss value, which is considered as the risk volume.

(Unit: billion yen)

924.4

+17.0

1.3

6.8

+5.5

1,323.1

1,338.7

+15.5

85.5

87.6

+2.0

Insurance risk (overseas)*

137.9

144.3

+6.3

Subsidiaries and affiliates risk

27.4

28.5

+1.1

Variance effect, etc.

(1,026.5)(1,050.2)(23.6)

Total risk volume*1,456.1

1,480.2+24.0

1

Risk related to our expanding scope of operations
Risk related to regulatory changes

2

Business risks
Risk taking policies

Risk management policies

Based on an awareness of the major impact that the life insurance
underwriting of a life insurance company has on business over the longterm, the Group fully analyzes and checks risk profiles as well as risk
and return characteristics, both of which differ depending on products,
thereby formulating product strategies.

Based on an awareness of the major impact that life insurance
underwriting has on business over the long term, the Group determines,
analyzes, and assesses the insurance underwriting risk and carries out
appropriate controls.

To make sure to pay insurance claims in the future, the Group sufficiently secures assets with optimal characteristics (current maturity,
liquidity, and others) and develops asset management strategies by fully
considering liability characteristics and risk tolerance.
• Interest rate risks have a significant impact on the change of surplus
due to the long-term nature of insurance liabilities; therefore, the Group
strives to reduce such risks given their financial accounting-based andeconomic value-based effects.

Investment risks are classified as market risks (fluctuations in interest
rates, share prices, and exchange rates), credit risks (deterioration of
the financial conditions of an entity to which credit is provided), andreal estate investment risks (decreases in profits and price related toreal estate). Optimal risk controls are taken in accordance with thecharacteristics of each asset.

(3) Operational risk

The Group strives to prevent risks from occurring and reduce them so as A system to control operational risks, such as administrative and system
not to harm its corporate value.
risks, is established.

(4) Affiliate and other entity risk

The Group analyzes and checks the soundness, profitability, and risk
and return characteristics of the business while also assessing theappropriateness and reasonableness of investment. Then, the Groupdevelops business investment strategies by considering their financial
accounting-based and economic value-based effects.

Risks are properly controlled by assessing the income/expendituresituation as well as the potential for the occurrence of various risks at
subsidiaries, affiliates, and business investment targets.

The Group secures a certain level of liquidity and establishes a structurethat enables a smooth securitization of assets in order to respond toliquidity risks.

The status of financing is categorized depending on its severity level.
By determining a controlling method according to each category, theGroup secures a certain level of liquidity and establishes a structure thatenables the smooth securitization of assets for fund preparation.

The Group strives to prevent risks from occurring and reduce them so as Information related to reputational risks is collected, and responses to
not to harm its corporate value.
reputational risks and a reporting system are clarified.

T&D Holdings |907.3

Operational risk

Risk related to dividend income• The diversification and optimization of the business portfolio is promoted as a pillar of the growth strategy in the Group Long-Term Vision.

(6) Reputational risk

ChangeInvestment risk

 isk related to reliance on the performance of the lifeR
insurance business• The Board of Directors gives the necessary advice and support related to the performance of the three companies, together with monitoring budget
variance management and the progress of the management plan.

(5) Liquidity risk

As of March 31,
2022

Counterparty risk

*1 Recorded as business investment risks that include insurance risks related to overseas
insurance companies subject to investments (internally booked as subsidiaries and affiliatesrisk)*2 The economic value-based risk volume (after the variance effect) calculated by using theinternal model (measurement period: 1 year, VaR: 99.5%)*3 The figures in the above table are the result of retroactively applying accounting associatedwith the restructuring of Fortitude announced on October 1, 2021.

Risk related to reliance on the performance of the life insurance business(2) Investment risk

As of March 31,
2021
Insurance risk (domestic)• Risks as a holding company(Responses)

86| Integrated Report 2022

Supplementary Materials
and Corporate Data

practices appropriate control of risks in the business as a whole,including unquantified risks, in order to tackle integrated risk
management that leads to the attainment of management goals.

The Group is heavily reliant on the performance of its three life insurance companies. Therefore, if the business circumstances, roles, or positions of anyof the three life insurance companies change, the Group’s performance and financial condition could be adversely affected.

(1) Insurance underwriting risk

T&D Insurance Group’s
Business

2. Risk control
The Economic Solvency Ratio (ESR), a risk indicator based on
economic value, is calculated by dividing the net assets (surplus)
found by subtracting liabilities from economic value-based
assets by the risks quantified as above (economic capital, orEC). We ensure financial soundness and capital adequacy bycontrolling the EC within a certain range of the surplus, while
also applying the current finance supervision system concerningsoundness. The ESR is managed monthly and reported to theGroup Risk Management Committee and the Board of Directors
along with other risk reviews.

236%
227%*3200%

ESR(surplus ÷ EC)

198%

189%
150%

168%

Ultimate Forward Rate applied

159%

Ultimate Forward Rate not applied
100%

50%

Surplus*1

EC(Net economic value-based
assets)2,222.7
1,324.5(required economic value-based
capital = risk volume*2)(billion yen)

3,302.8

3,491.4

2,556.2

2,495.9
1,319.2

1,290.6

1,456.1

1,480.20%Mar. 31, 2018

Mar. 31, 2019

Mar. 31, 2020

Mar. 31, 2021

Mar. 31, 2022

*1 The difference between assets and liabilities evaluated based on economic value. The
evaluation of assets and liabilities is calculated using basically the same assumptions as for
MCEV. The capital cost rate used as the risk margin is set as 5%. In addition to applying the
Ultimate Forward Rate since the end of March 2019, subordinated debt is added to thesurplus.
*2 The economic value-based risk volume (after the variance effect) calculated by using theinternal model (measurement period: 1 year, VaR: 99.5%). The necessary capital for MCEV isevaluated by using the same internal model.
*3 The figures above are the result of retroactively applying accounting associated with therestructuring of Fortitude announced on October 1, 2021.

3. Stress test implementation
We strive to keep track of a wide range of risks to make sure wecan also handle risks not fully grasped by quantification while
also controlling quantified risks. We run stress tests to checkthe impacts of widely identified risks and of severe shocks thatexceed expectations, such as major worsening of financial

T&D Holdings |markets or large-scale disasters. We analyze the results of stresstests and check our countermeasures, etc. in advance, and webuild a framework that can maintain our soundness in all kindsof situations.

87| 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

Management Organization
Cyber security initiatives
The Group recognizes that one of the important tasks of management is properly protecting and managing information
assets in compliance with laws and regulations. This specifically involves protecting information assets from increasingly
sophisticated cyber threats. To fulfill our social responsibilities
as a company engaged in life insurance business and otherbusinesses, we have formulated our Group Information Security
Policy and Rules on the Group’s Cyber Security Management
and made engagement in cyber security mandatory for all executives and employees. Cyber attacks, etc. have the potential tostop systems and impede our operations and to cause leakageof important information.
In particular, in order to provide even safer services to customers, we utilize security tools to conduct round-the-clockmonitoring of cyber threats that target financial institutions,which have increased in recent years in terms of both frequency
and sophistication. We have also established the cross-organizational Group Computer Security Incident Response Team(CSIRT) along with company-level CSIRT teams, which collectinformation, conduct analysis, and implement measures in connection with cyber attacks. In addition, we conduct Group- andcompany-level drills and participate in industry-wide drills andtraining. Issues identified through these drills are reflected in our
response procedures and manuals to strengthen our practicalresponsiveness.
Along with conducting multi-layered security measures(entrance, exit, and internal), we regularly receive diagnostic
security evaluations from independent institutions and promptly
implement the necessary measures. In addition, we bring in
outside experts to educate group management on the latest
trends in cyber security, and we are working to raise awarenessof cybersecurity risks. Executives and employees also receive
training on information security and cyber security, and drills arecontinually conducted on handling suspicious email in order tofurther raise security literacy.
The Internal Auditing Department verifies whether thesesystems are functioning effectively and reports the results to theBoard of Directors.

Board of Directors(as of September 30, 2022)

Compliance
Basic compliance policies
The Group has formulated the T&D Insurance Group CSR Charter, the T&D Insurance Group Compliance Code of Conduct,
and the T&D Insurance Group Basic Policy for Strengthening

the Compliance Structure. The Group ensures that executives
and employees are conversant with these basic policies andstandards to promote rigorous Group-wide compliance efforts.

Please see the Company’s website for more details on the Compliance Promotion System.

https://www.td-holdings.co.jp/en/company/governance/compliance.html

Basic policies to block relationships with antisocial forces
In its Group Compliance Code of Conduct, the Group defines
its policy toward antisocial forces as follows: “to reject and stringently respond to any antisocial forces that threaten the orderand safety of civil society.” In accordance with this policy, theGroup has formulated the T&D Insurance Group Basic Policy for
Responding to Antisocial Forces and has announced this on the
Company’s website.

Please see the Company’s website for more details on the Compliance Promotion System.

https://www.td-holdings.co.jp/en/company/governance/compliance.html

Accountability
The Company works to disclose information in line with the basic
concept of striving to increase the transparency of management
by appropriately disclosing corporate information in a timely
manner, including appropriate financial information and non-financial information regarding management strategies, management
priorities, and other matters.

In specific terms, the Company strives to provide easy-to-understand disclosure based on the fair disclosure rules of timeliness,fairness, and accuracy in order to maintain and reinforce trust
among all of its stakeholders, including customers, shareholders,
employees, insurance agents, business partners, and local communities, and to increase the level of management transparency.

Internal reporting system
The T&D Insurance Group has created a Group-wide internalreporting system, the T&D Group Help Line, which is intended
to serve as a conduit for reports from any executive or Group
employee on instances of illegal behavior and other compliance

T&D Holdings |Directors who are
Audit and Supervisory
Board Members(as of September 30, 2022)

infractions that may damage the Group’s credibility or reputation. The system helps to forestall if possible the occurrence ofsuch events and quickly assess and remedy the situation if not.

88

| Integrated Report 2022

T&D Holdings |89| Integrated Report 2022

Supplementary Materials
and Corporate Data

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

Representative Director and President

1

3

4

6

7

2

11

9

12

*1 As of March 31, 2022
*2 FY2021

Director and Senior Managing Executive Officer3

2

Number of the Company’s shares held*1

51,600Attendance to the Board of Directors’ meetings*2

17 / 17

Director (outside director, part-time)Masahiko Moriyama

4

Naoki Ohgo

Significant concurrent positions
Director of Daido Life

Reasons for selection
Mr. Naoki Ohgo possesses advanced expertise and a wide range
of knowledge gained through his tenure as a partner in a foreign
consulting firm, followed by his current position of Representative
Director of Root F Co., Ltd. where he utilizes his global perspective
and high level of insight to provide consulting services mainly in thefinancial field. He is expected to fulfill the roles mainly of supervising
key management decisions and the execution of business fromthe perspective of protecting general shareholders by utilizing thisknowledge and experience.

Attendance to the Board of Directors’ meetings*2

11,300—

Director (part-time)
6

3,200

Number of the Company’s shares held*

Attendance to the Board of Directors’ meetings*2

16 / 17

Director (part-time)

Naoki Soejima

7

Personal history
Apr 1981 Joined Taiyo LifeOct 2008	General Manager of Marketing Planning Department of
Taiyo LifeApr 2009 Executive Officer of Taiyo LifeApr 2011 Managing Executive Officer of Taiyo LifeJun 2011 Director and Managing Executive Officer of Taiyo LifeApr 2014	Representative Director and Senior Managing Executive
Officer of Taiyo LifeApr 2016	Representative Director and Executive Vice President of
Taiyo LifeApr 2019 Representative Director and President of Taiyo Life (current)
Jun 2019 Director of T&D Holdings (current)
Significant concurrent positions
Representative Director and President of Taiyo Life
Number of the Company’s shares held*1

21,710Attendance to the Board of Directors’ meetings*2

17 / 17

4

6

7

10

Number of the Company’s shares held*1

28,400Attendance to the Board of Directors’ meetings*2

17 / 17

11

8

5

9

12

Mutsurou Kitahara

Personal history
Apr 1982 Joined Daido LifeApr 2008 General Manager of Planning Department of Daido LifeApr 2010 Executive Officer of Daido LifeApr 2013 Managing Executive Officer of Daido LifeJun 2013 Director and Managing Executive Officer of Daido LifeApr 2015 Managing Executive Officer of T&D Holdings
Apr 2016	Director and Senior Managing Executive Officer ofDaido LifeApr 2017 Senior Managing Executive Officer of T&D Holdings
Jun 2019	Representative Director and Senior Managing Executive
Officer of Daido LifeApr 2020	Representative Director and Executive Vice President of
Daido LifeApr 2021	Representative Director and President of Daido Life(current)
Jun 2021 Director of T&D Holdings (current)

700

Attendance to the Board of Directors’ meetings*

2

9

Reasons for selection
Mr. Takashi Ikawa has business experience within the Group including
asset investment and accounting, and he has considerable expertisein finance and accounting. He is expected to fulfill the roles mainly ofauditing and supervising key decisions and the performance of duties bydirectors not serving as Audit and Supervisory Board members by utilizing
his extensive knowledge related to business operations and his experiencein the Group's holding company and insurance company, which includes
being in charge of risk management and internal auditing units.

17 / 17

Director (Audit and Supervisory Board Member)(outside director, part-time)

Seiji Higaki

11

Reasons for selection
Having served as a director, president and representative executive
officer of a bank holding company and as a representative director andexecutive officer of a bank, Mr. Seiji Higaki has a wealth of knowledge
and experience in corporate management. He is expected to fulfill theroles mainly of auditing and supervising key management decisions
and the performance of duties by directors not serving as Audit andSupervisory Board members from the perspective of protecting generalshareholders by utilizing this knowledge and experience.
Number of the Company’s shares held*1

1,700

Attendance to the Board of Directors’ meetings*2

17 / 17

Attendance to Audit and Supervisory Board meetings*2

21 / 2134,300Attendance to the Board of Directors’ meetings*2

14 / 14

T&D Holdings |90| Integrated Report 2022

12,100Attendance to the Board of Directors’ meetings*2—

Attendance to Audit and Supervisory Board meetings*2—

Director (Audit and Supervisory Board Member)(outside director, part-time)

Shinnosuke Yamada

12

Atsuko Taishido

Personal history
Oct 1983 Joined Asahi Accounting Company
		 (current KPMG AZSA LLC)
Mar1987 Registered as a Certified Public Accountant
Jul 2010 Partner of KPMG AZSA LLC
Jul 2010	Executive Board Member of The Japanese Institute ofCertified Public Accountants
Jun 2020	Director (Audit and Supervisory Board Member) of
T&D Holdings (current)

Personal history
Oct 2001	Registered as an Attorney and Joined Mori Sogo Law
Offices (now Mori Hamada & Matsumoto)Jan 2010 Partner of Mori Hamada & Matsumoto (current)
Jun 2022	Director (Audit and Supervisory Board Member) of T&D
Holdings (current)

Significant concurrent positions
Certified public accountant
Auditor of EXEO Group, Inc.

Reasons for selection
Ms. Atsuko Taishido possesses significant expertise and extensive insightas an attorney at law specialized in corporate legal affairs. She is expected
to fulfill the roles mainly of auditing and supervising key management
decisions and the performance of duties by directors not serving as Audit
and Supervisory Board members from the perspective of protecting
general shareholders by utilizing this knowledge and experience.

Reasons for selection
Mr. Shinnosuke Yamada possesses significant expertise and extensive
insight as a certified public accountant. He is expected to fulfill theroles mainly of auditing and supervising key management decisions
and the performance of duties by directors not serving as Audit andSupervisory Board members from the perspective of protecting generalshareholders by utilizing this knowledge and experience.

900

Number of the Company’s shares held*1
Attendance to the Board of Directors’ meetings*2

17 / 17

Attendance to Audit and Supervisory Board meetings*2

21 / 21Significant concurrent positions
Representative Director and President of Daido Life
Number of the Company’s shares held*1

Number of the Company’s shares held*1—

Attendance to Audit and Supervisory Board meetings*

10

Reasons for selection
Mr. Takashi Tojyo has business experience within the Group including
asset investment and legal affairs, and he has considerable expertisein finance and accounting. He is expected to fulfill the roles mainly ofauditing and supervising key decisions and the performance of duties
by directors not serving as Audit and Supervisory Board members by
utilizing his extensive knowledge related to business operations and his
experience in the Group's holding company and insurance company,
which includes being in charge of risk management units.

—
2

Personal history
Apr 1975 Joined The Daiwa Bank, Ltd.
Jun 2003 Executive Officer of Resona Bank, Ltd.
Jun 2005 Executive Officer of Resona Holdings, Inc.
Jun 2006 Director of Resona Holdings, Inc.
Jun 2007	Director, President and Representative Executive Officer ofResona Holdings, Inc.
Apr 2009	Representative Director and Executive Officer ofResona Bank, Ltd.
Jun 2011 Director and Vice Chairman of Resona Bank, Ltd.
Apr 2013 Director of Resona Holdings, Inc.
Jun 2013 Chairman of Resona Research Institute Co., Ltd.
Jun 2018 Director of T&D Holdings
Jun 2020	Director (Audit and Supervisory Board Member) of
T&D Holdings (current)

Takashi Tojyo

Personal history
Apr 1986 Joined Taiyo LifeMar 2017	General Manager of Risk Management Department of
Taiyo LifeApr 2017 Executive Officer of Taiyo LifeApr 2021	Director of Pet & Family Insurance		Executive Officer and General Manager of Risk
Management Department of T&D Holdings
Jun 2021 Director of T&D United Capital
Apr 2022 Executive Officer of T&D Holdings
Jun 2022 Director (Audit and Supervisory Board Member) of		
T&D Holdings (current)

21,800Attendance to the Board of Directors’ meetings*2

Director (Audit and Supervisory Board Member)(outside director, part-time)

Supplementary Materials
and Corporate Data

Director (Audit and Supervisory Board Member(Full-Time))

Takashi Ikawa

Number of the Company’s shares held*1

Reasons for selection
Mr. Kensaku Watanabe possesses significant expertise and extensive
insight as an attorney at law specialized in corporate legal affairs. He is
expected to fulfill the roles mainly of supervising key management
decisions and the execution of business from the perspective of protecting
general shareholders by utilizing this knowledge and experience.

T&D Insurance Group’s
Business

Significant concurrent positions
Audit & Supervisory Board Member of T&D United Capital

Personal history
Apr 1997	Registered as an Attorney and Joined Okazaki, Ohashi &Maeda (now Tokei Partners)
Jan 2006 Partner of Tokei Partners (current)
Jun 2016 Audit & Supervisory Board Member of T&D Financial LifeJun 2020 Director of T&D Holdings (current)

Number of the Company’s shares held*1

Corporate
Governance

Personal history
Apr 1985 Joined Daido LifeApr 2011	General Manager of Investment Planning Department of
Daido LifeApr 2012 Executive Officer of Daido LifeApr 2016 Managing Executive Officer of Daido LifeJun 2017 Director and Managing Executive Officer of Daido LifeApr 2020 Managing Executive Officer of T&D Holdings
Apr 2021	Director and Senior Managing Executive Officer ofDaido Life		
Senior Managing Executive Officer of T&D Holdings
Jun 2022	Audit & Supervisory Board Member of T&D United Capital(current)		Director (Audit and Supervisory Board Member) of T&D
Holdings (current)

Kensaku Watanabe

Significant concurrent positions
Attorney

Significant concurrent positions
Representative Director of Root F Co., Ltd.
Director of Orient Corporation

1

3

2

8

Significant concurrent positions
Director of Daido Life
Director of T&D Financial Life

5

Personal history
Apr 1985 Joined McKinsey & Company, Inc.
Jul 1999 Partner of McKinsey & Company, Inc.
Jul 2005 Executive Officer of GE Consumer Finance K. K.
		 (current Shinsei Financial Co., Ltd.)
Aug2008 Representative Director of Root F Co., Ltd. (current)
Jun 2017 Director of T&D Holdings (current)

Number of the Company’s shares held*1

1

Personal history
Apr 1984 Joined Daido LifeApr 2010 Executive Officer of Daido LifeApr 2013 Managing Executive Officer of Daido LifeJun 2015 Director and Managing Executive Officer of Daido LifeApr 2017	Director and Senior Managing Executive Officer ofDaido LifeJun 2019	Representative Director and Senior Managing Executive
Officer of Daido LifeApr 2020 Director of Daido Life (current)		
Executive Vice President of T&D Holdings
Jun 2020	Representative Director and Executive Vice President of T&D
Holdings (current)
Jun 2021 Director of T&D Financial Life (current)

Director (outside director, part-time)

Personal history
Apr 1989 Joined Daido LifeApr 2015 General Manager of Planning Department of Daido LifeApr 2016 Executive Officer of Daido LifeApr 2019 Managing Executive Officer of Daido LifeJun 2019 Director and Managing Executive Officer of Daido LifeApr 2022 Director of Daido Life (current)		
Senior Managing Executive Officer of T&D Holdings
Jun 2022 Director and Senior Managing Executive Officer of		
T&D Holdings (current)

Reasons for selection
Mr. Masahiko Moriyama has business experience within the Group
including sales, products, planning, and systems. He is expected to fulfill
the roles mainly of supervising key management decisions and theexecution of business by utilizing his extensive management knowledge
and experience in the Group's holding company and insurance company,
which includes being in charge of corporate planning.

Kanaya Morinaka

Further Advancementof Capital and Risk
Management

Director (Audit and Supervisory Board Member(Full-Time))

Representative Director and Executive Vice President

Hirohisa Uehara

Personal history
Apr 1984 Joined Taiyo LifeJan 2005	General Manager of Investment Planning Department of
Taiyo LifeFeb 2005	Director of T&D Asset Management
Apr 2007	General Manager of Group Planning Department of T&D
Holdings
Apr 2010 Director of T&D Asset Management
Apr 2011	Executive Officer and General Manager of Group Planning
Department of T&D Holdings
Apr 2012 Director of T&D Financial LifeApr 2014 Executive Officer of Taiyo LifeJun 2014 Director and Executive Officer of Taiyo LifeApr 2015	Director and Managing Executive Officer of Taiyo LifeApr 2016	Director and Senior Managing Executive Officer of Taiyo LifeApr 2017	Director of Taiyo Life
Executive Vice President of T&D Holdings
Jun 2017	Director of T&D Financial Life
Representative Director and Executive Vice President of
T&D Holdings
Apr 2018 Representative Director (current)

5

8

10

1

Try & Discover for
Creation of
Shared Value

T&D Holdings |91| Integrated Report 2022

Significant concurrent positions
Attorney
Audit & Supervisory Board Member of Pigeon Corporation

Number of the Company’s shares held*10

Attendance to the Board of Directors’ meetings*2—

Attendance to Audit and Supervisory Board meetings*2—

Stakeholder Engagement
The Group proactively engages in dialogues with all of its stakeholders as set out in the T&D Insurance Group CSR Charter(see “4. Communication”). By taking every possible opportunity to interact, the Company and each Group company collectthe opinions of policyholders, sales agents, and other stakeholders and apply them to their respective business management.

For Shareholders and Investors

Meetings Held in FY2021

Shareholders’ Meetings, financial results briefings, one-on-one meetings
for institutional investors, publication of shareholder newsletters, etc.

Financial results meetings for institutional investors and analysts

4

Financial results telephone conferences for institutional
investors and analysts

4

T&D Holdings, Inc. conducts highly communicative investor relations(IR) activities based on the principle that its top management is
responsible for all IR statements.
In addition to regular financial results meetings for institutional
investors and analysts, the Company holds briefings with a focus onthemes that include closed book business and ESG. The Company
holds one-on-one meetings with investors in Japan and overseas,
and broadly shares views obtained
through dialogues with the management and employees of the Group.
The Company also publishes
corporate information in a timely
manner through its IR website andhas been rated highly by external
assessment organizations.

Conferences sponsored by securities firms
One-on-one meetings

5
Total 222

Evaluations by External Assessment Organizations* The number of evaluated companies differs depending on the timing of surveys, etc.

2021 Internet IR Award (Daiwa Investor Relations Co. Ltd.)
Evaluated 3,944 listed companies*

Selected as one of 103 winners of theCommendation Award
FY2021 All Japanese Listed Companies’ Website Ranking(Nikko Investor Relations Co., Ltd.)

Evaluated all 3,888 listed companies*

Selected as one of 191 companies with grade AAA websites
in the Overall Ranking for the fifth consecutive year

Scenes from an IR meeting for institutional investors and analysts

For Customers

For Employees

Customer feedback, customer surveys, customer meetings, Service Quality
Improvement Committee, Service Supervision Committee, etc.

Education and training, human rights training, employee awareness surveys,
dialogues and consultations with labor unions, an internal reporting system, etc.

The Group has set up many points of contact with its customers,
including sales representatives, agents, call centers, and the Internet
as well as a new policy procedure survey that focuses on the attitudes
of sales representatives and the understandability of application forms
and other documents and customer satisfaction surveys, giving theGroup access to a wide range of customer feedback. A committee has
also been established to improve customer satisfaction, and the Group
incorporates the opinions of outside committee members, including
attorneys and experts in consumer issues, into its management.

Education and training are provided through on-the-job training, grouptraining, and support for personal development efforts. The Group also
conducts human rights awareness training that addresses discrimination, harassment, and other issues as a way to deepen employees’ understanding of the importance of respecting human rights. Awarenesssurveys are conducted to collect information on employee opinions
and requests regarding job satisfaction and enhancing motivation.
Through dialogues with its labor unions, the Group has an opportunity
to discuss a wide range of subjects, including management policies,
wages, working hours, leave, human resource systems, and welfare.

For Agents and Tie-up Organizations

For Protecting the Environment andContributing to Local Communities

Training programs, business partner meetings, proposal of welfare systems
for companies and organizations, and other services

Participation in the UN Global Compact (UNGC), Principles for Financial
Action for the 21st Century, and the Japan Association for the United
Nations Environment Programme (UNEP), support for the Japan Down
Syndrome Society, working with the Japan Philanthropic Association,
implementing Forests of Taiyo Life activities, supporting activities by The
Nature Conservation Society of Japan, etc.

High-quality support is provided for agents by giving sales agents theirown e-learning materials to help them acquire broad knowledge on thecompliance and insurance business, as well as by conducting training
for sales staff mainly to enhance sales skills and improve presentation
skills. In addition, business reporting meetings are held with tie-up
organizations and agents to report the latest business developments
and to hear their views on the Group’s business operations.

T&D Holdings |The Group participates in
the UN Global Compact,
Principles for Financial
Action for the 21st Century,and other initiatives. It also
exchanges views in a wide
range of areas throughstudy groups and dialogues
with participating companies. Furthermore, the Group has opportunities to understand stakeholders’ expectations toward enterprises andto explore possibilities for the Group’s contribution through support forand participation in the activities of NPOs active in each field.

92| Integrated Report 2022