Tr y & Disc ov er fo r
Creat ion of Shared Val ue

T&D Holdings INTEGRATED REPORT 201921

Try & Discover for Creation of Shared Value

Title

FY2019-FY2021 T&D Insurance Group Medium-Term Management Plan

Try & Discover 2021 — Creation of Shared Value —In the new three-year medium-term management plan, whichbegan in April 2019, the Group will expand its corporate value bycontinuing to take on challenges for new growth towards the“creation of shared value,” based on the business platform thatit has strengthened and expanded to date.

Expanding our growth areas• Strengthening initiatives for the senior market

Increase corporate value based on thestrengthened business platform

Business platform strengthening period• Expand coverage such as Third Sector anddisability benefit insurance
Established ERM structure

Increased value of new business2014.42016.4

Medium-Term Management Plan (FY2014-FY2015)
TargetActual(FY2015/Mar.31, 2016)(FY2015/Mar.31, 2016)

Corporate Value(EV)¥ 2.2 trillion
and above¥ 1,893.7 billion

Profit(Adjusted Net
Income*1)¥ 77.0 billion
and above¥ 83.3 billion

New policy sales
results (policy
amount in force*2)¥ 63 trillion
and above¥ 62,998.1 billion*1 A djusted net income is calculated by adding net income and additional internal reserves in excessof the legal standard requirements related to reserves for contingency and price fluctuations(after taxes).
*2 The policy amount in force includes individual insurance, individual annuities and Daido Life’s
J-type product, T-type product, and Kaigo Relief.

22

T&D Holdings INTEGRATED REPORT 20192019.4

Medium-Term Management Plan (FY2016-FY2018)

Corporate
Value
(EV)

Profit(Financial
accounting)TargetActual(FY2018/Mar.31, 2019)(FY2018/Mar.31, 2019)

Group
MCEV

¥ 2.4 trillion¥2,370.6 billion

Valueof NewBusiness¥ 100 billion¥ 140.3 billion

Adjusted
Net
Income*1

Around¥85.0 billion forthree years

Three-year
average¥84.5 billion

Challenge for new growth towards
the creation of shared value
To become an
insurance groupthat shares its
values withsociety and grows
sustainably

Expansion of corporate value based on ourbusiness platform, which was strengthened
and expanded during the previous
medium-term management plan

2022.3Medium-Term Management Plan (FY2019-FY2021)
TargetMedium- to long-term target levels

Value of New Business

FY2021: 170.0 billion yen and above[Core ROEV: 5% and above for three years]

Group
MCEV

Next medium-term management plan: 4.0 trillion yen[ROEV: Stable and sustainable growthover 7.5% in the medium- to long-term]

Net Income

FY2021: FY2018 levels(73.0 billion yen) or higher

Net
IncomeNext medium-term management plan:
100.0 billion yen

T&D Holdings INTEGRATED REPORT 201923

Try & Discover for Creation of Shared Value

2019年度〜2021年度
保険グループ中期経営計画
FY2019-FY2021
T&DT&D
Insurance
Group Medium-Term Management Plan

Try & Discover 2021 —Creation of Shared Value—
Review of the Previous Medium-Term Management Plan

Progress of Key Performance Indicators
In a business environment characterized by a revision of the standard mortality table and continued low interest rates, the Group’s
profitability on an economic value basis grew steadily through measures such as developing a flexible product/sales strategy andproperly controlling interest rate risk. In addition, accounting profit almost reached the target, despite negative factors such as
strong sales results causing an increase in the provision for standard policy reserve, and higher currency hedging costs.
Value of new businessCorporate value (Group MCEV)Profit (Adjusted net income*)

Target: FY2018: 100 billion yen

Target: End of March 31, 2019: 2.4 trillion yen

Target: Around 85.0 billion yen for three years(Trillions of yen)(Billions of yen)(Billions of yen)

140.3
119.5

(¥2.4 trillion)

2.40

129.4
2.29

(¥100.0 billion)
93.0

2.29

(¥85.0 94.2
billion)

83.3

91.7

1.89

56.3

2014

2.37

2015

2016

2017

Mar. 31, 20152018 (Fiscal Year)

83.3

78.5

Three-year average
84.5 billion yen

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2018

Mar. 31, 2019

2014

2015

2016

2017

2018 (Fiscal Year)*Adjusted net income = Net income + Additional internal
reserves in excess of legal standard requirements related toreserves for contingency and price fluctuations (after taxes)

Results of Major Strategies

Transformation of the Product Portfolio

Taiyo Life

Daido Life

T&D Financial Life

Approx. 40% increase*1 in Third Sector annualized premiums of new policies, through a focus
on dementia and disability benefit insurance

Approx. 40% increase*1 in new policy amountthrough the promotion of disability benefit products such as J-type product and T-type product,in addition to death benefit products

Approx. 20% increase*1 in policy amount inforce, due to a multi-line approach (saving andprotection) to the product lineup

Annualized premiums of new policies
in the Third Sector

New policy amount (J-type product + T-type
product + Nursing Care*2)(Billions of yen)

1,023.8

16.3
13.4
9.4

(Billions of yen)

1,143.2

2,172.9
2,052.7
1,848.5657.0

1,806.4 1,808.7

1,879.3

472.8

6.7

2014

1,089.8

827.0

13.3

11.5

2013

Policy amount in force(Billions of yen)

2015

2016

2017

2013

2018 (Fiscal Year)

2014

2015

2016

2017

2018 (Fiscal Year)

Mar. 31, 2014 Mar. 31, 2015 Mar. 31, 2016 Mar. 31, 2017 Mar. 31, 2018 Mar. 31, 2019*1 Compared to the fiscal year ended March 31, 2016, the final year of the medium-term management plan before the previous plan *2 Shunyu Relief + Kaigo Relief

Results of Major Strategies

Strengthening Initiatives for the Senior Market

Provided products and services that
preempt needs in an integrated manner,such as Himawari Dementia Prevention
Insurance and the Kaketsuke-Tai Service

Survey on the image of dementia:

New policy amount for SME owners:

Industry No. 1

Up 15%*4*3 L ife insurance companies that support the prevention and treatment of dementia (March
2019 Macromill survey)*4 Rate of increase of new policy amount from the fiscal year ended March 31, 2016 (final yearof the medium-term management plan before the previous plan) to the fiscal year ended
March 31, 2019 (final year of the previous medium-term management plan)*3

24

Enhanced products and services to meetinheritance and business succession needs
and nursing care needs, in response toprogression of the aging of SME owners

T&D Holdings INTEGRATED REPORT 2019

Business Environment and Issues

Awareness of the Environment in Formulation of the Medium-Term Management Plan
In addition to prolonged low interest rates, various trends
with an impact on the profitability and competitive advantage of the domestic life insurance business are expected to continue, going forward, including a declining
population and the progress of digitalization. Facing suchchanges in the environment head on, the expansion of
new growth areas is becoming increasingly important,
together with enhancing the profitability of each Group
company. Based on this awareness, in the medium-term
management plan that began in April 2019, we will

expand our corporate value by taking on new growthstrategy challenges, based on the business platform that
we have strengthened and expanded to date.
Specifically, we will expand the revenue base of theGroup, by bolstering this base through an expansion andstrengthening of the domestic life insurance business,and diversifying our revenue sources. We believe that thisapproach will lead to reliable future growth, through thesteady accumulation of new business value.

Social environment• Further decline in birthrate, aging population, and population decline• Increasing need to make self-provision for pension, medical care, and nursing care

Economic andfinancial environment• Continued low interest rates, as well as risk of future interest rate increases

Industry andregulatory environment• Revision of standard mortality table, introduction of financial soundness indicators based on
economic value

Technology innovation• Advances in medical technology, and digital innovations, including the use of big data andartificial intelligence (AI)Priority Issues for Medium-Term Management Plan

Strengthening ofCore Businesses• Respond appropriately to the needs of customers and of society, and drive evolution in products, services and sales channels• Raise profitability of insurance underwriting to deal with an environment of prolonged low
interest rates• Utilize new information technology, etc. to improve production efficiency

Diversification ofBusiness Portfolio• Build new, specific markets and channels within the domestic life insurance market• Expand into new business areas that have an affinity to the life insurance market, to capture
external growth

Promotion ofIntegrated GroupManagement• Efficient utilization of Group capital• Leverage Group synergies further

T&D Holdings INTEGRATED REPORT 201925

Try & Discover for Creation of Shared ValueFY2019-FY2021 T&D Insurance Group Medium-Term Management Plan

Try & Discover 2021 —Creation of Shared Value—
Future Vision of the Group“Creation of Shared Value” through the Implementation of T&D Insurance Group’s Corporate Philosophy
With our “Try & Discover” motto for creating value, theT&D Insurance Group aims to be a group that contributes to all people and societies. Based on this corporate
philosophy, the Group will contribute to resolution of theever-changing issues faced by people and society, withthe aim of being a corporate group that grows sustainably
together with society. In the medium-term management

Creation of
Shared Valueplan, we will strongly promote the implementation of thiscorporate philosophy, as well as the “creation of sharedvalue,” in which value is created for both society and businesses, by responding further to the resolution of social
issues, such as an extension of healthy life expectancy
and SME business continuity in the respective specialty
markets of each Group company.

• The Group sees ever-changing issues faced by people and society as business challenges tobe tackled• From the perspective of resolving social issues, by means of our business we will create both
(1) values to society, and (2) values to the company

Major themes in “Creation of Shared Value”
that leverage the strengths of the T&D Insurance Group

Creation of Shared Value
Areas with a high affinity to the core businessof the T&D Insurance Group6. Contributing to amore sustainable society
through investments

5. Asset formation
matched tocustomer life plans

1. Enriching the lives ofsenior citizens

Strengthening
2. Developing the SMEs
domestic lifethat support Japaninsurance business(core business)

4. Enhancing future
vitality withdigital innovation

26

T&D Holdings INTEGRATED REPORT 2019

Increase satisfaction
for all stakeholders

Customers

Shareholders/investors

Tie-uporganizations

Employees

Local communities/societies

Business
partners

Healthy and abundant lifestyles
Employment and job satisfaction

3. Healthy and fulfilling
lifestyles for morediverse households

Sustainable global environment

Basic Strategies of the Medium-Term Management Plan

Realizing the Future Vision of the Group with Four Basic Strategies
The medium-term management plan consists of fourbasic strategies. The first is to strengthen our core businesses by pursuing specialized strategies that leverage
the strengths of the Group companies (mainly the life
insurance companies). The second is to diversify ourbusiness portfolio by investing in new business areas thathave an affinity to the domestic life insurance business.

Furthermore, as strategies to support the realization ofthese two growth strategies, we have also established thebasic strategies of evolving the Group’s financial strategy,
with the aim of further improving capital efficiency, andpromoting the integrated management of the Group, inorder to achieve the effective and efficient utilization ofGroup management resources.

1. Strengthening of Core Businesses

2. Diversification of Business Portfolio

3. E
 volution ofGroup Financial Strategy

4. Promotion ofIntegrated Group Management

1. Strengthening ofCore Businesses

2. Diversification ofBusiness Portfolio

Pet & Family Insurance

Strategy
Keywords

Supporting customers in living
longer, healthier lives

Evolving a full-range of protection
integrating both corporations andindividuals

Raising its presencein the independent insurance
agent channel

Strengthening and enhancing
Group synergies

Products

Survival benefit products such as
prevention insurance

Death benefit products
Disability benefit products

Savings-type productsProtection-type products

Simple and easy-tounderstand products

Services

Face-to-face services
Integrated products and services

Management and health support
related services
Senior and affluent segment services

Simple and highly convenient services through the utilization of IT

High quality services throughthe utilization of IT

Channels

In-house sales representatives andagents+New channels responding tocustomer needs

In-house sales representatives/tax
accountant agents+
New schemes combining thestrengths of each channel

Mega banks
Influential regional banks
Insurance shops

Pet shops
Online/mail-order shopping

Household market

SME market

Independent insurance agent market

Senior segment(approximately 35 million people)

SMEs(approximately 1.9 million)

Affluent segment(upper mass market and higher,
about 11.7 million households)

Main Market
Core
Customer
Segments

3. Evolution of Group Financial Strategy

AssetManagement
Business

Closed Book
Business

Pet owner segment(dogs and cats;roughly 18.5 million)

4. Promotion of Integrated Group Management

T&D Holdings INTEGRATED REPORT 201927

Try & Discover for Creation of Shared ValueFY2019-FY2021 T&D Insurance Group Medium-Term Management Plan

Try & Discover 2021 —Creation of Shared Value—
1. Strengthening of Core Businesses

Strengthening of Core Businesses — Overall SchematicIn the domestic life insurance business, which is our corebusiness, we will refine the strengths of the products/
services/sales channels of each of our life insurance companies, with the aim of establishing an unassailable top
brand in the respective specialty business areas of eachGroup company, and strengthening the revenue base of
the Group.
Taiyo Life will further promote the establishment of top
brands in the senior market by utilizing its product development capabilities such as dementia insurance, which
are ahead of the times, along with integrated products
and services, such as the Kaketsuke-Tai Service.
By regarding various changes in the environment as
growth opportunities, and taking up the challenge ofstructural transformation that transcends the current
frameworks in various business areas, Daido Life willrefine its approach of providing a full-range of protection
integrating both corporations and individuals, in order tobecome a life insurance company that leads the next eraof corporate coverage.
T&D Financial Life will enhance the Group’s presence
and results in the independent insurance agent market,
by further expanding its sales networks of bank agentsand promoting its highly flexible product development
capabilities.
In addition, in order to respond to the insurance needsof the millennial generation, we will establish new specialty markets through the use of digital platforms.

Strengthening of Core Businesses — Overall Schematic• The three core life insurance companies aim to build the top brand in their respective specific markets.
• Strengthen the core domestic life insurance business further by raising profitability of insurance underwriting,and building new, specific markets.

HouseholdmarketStrengths and differentiators

Raising profitability of insurance
underwriting

Building the top brand in
the senior market[Total core profit of the three life insurance companies]• Product development capabilities
that stay ahead of the curve• Integrated products and services

Leading a new era ofcorporate coverage
SME market

Independent
insurance
agent market• Solid relationships with the sales
platform• Specific channels for SME market(Billions of yen)Pursuing a specialized strategy

Three core life insurance companies

Specific markets

5-6 years
from now
Forecast
166.0
148.4 149.6(Medium-term
management plan)• Bank agent network• Flexibility of product development

New life
insurancechannel2017

28

Alliances
M&A

Millennial
marketT&D Holdings INTEGRATED REPORT 2019

2018

2019

2020

2021

•B
 uild specific markets that utilize digital platforms to respond to the insurance needs ofthe millennial generation

2. Diversification of Business Portfolio

Initiatives towards New Business Domains
The aim of initiatives targeting the diversification of ourbusiness portfolio is to achieve a multi-line model forrevenue sources, through the development of businessin new areas in which we can utilize our knowledge andresources in the life insurance business, and through theincorporation of external growth. When establishing new
business areas, we will proceed with the establishment ofsuitable business management systems, for businesses

with a high affinity to the life insurance business, that are
expected to contribute to Group consolidated profit andachieve high future growth.
Currently, we are specifically considering mainly theclosed book, asset management, and digital insurance
businesses. Moreover, in June 2019, we established T&D
United Capital Co., Ltd., as a subsidiary that handles strategies for business portfolio diversification.

— Initiatives in the medium-term management plan —Closed book business

Asset management business

Digital insurance business

Establishment of T&D United Capital (June 2019)
By consolidating Group management resources, we are establishing an effective and efficient integrated Group organizational
structure, based on demonstration of expertise, a proper management of risk and return, and speedy decision making.

Investment policy/capital allocation

Directly
owned subsidiary
Bringing together ofmanagement resources
Investment A

Investment in Closed Book Business
Through T&D United Capital, we will invest in the closed
book business, in which income is generated by obtaining
and consolidating blocks of policies in force for productsthat are no longer sold by an insurance company (closedbook), and enhancing their value. With a view toward acquiring new investment income and the future expansionof domestic business, we will accumulate business knowhow by building relationships with investment targets.

Investment B

SellerInvestment C

Strategic investments inclosed book business,
asset managementbusiness, etc.

Insurance Company A

Insurance Company B

Insurance Company C

Closed Book a

Closed Book b

Closed Book c

Closed Book a/b/c
Buyer

Closed Book Business Insurance Company
Investment

T&D United Capital

T&D Holdings INTEGRATED REPORT 201929

Try & Discover for Creation of Shared ValueFY2019-FY2021 T&D Insurance Group Medium-Term Management Plan

Try & Discover 2021 —Creation of Shared Value—
2. Diversification of Business Portfolio

Growing profits in the asset management businessoverseas asset management companies will also contribute to a strengthening of the asset management
capabilities at each Group life insurance company, as wellas Group consolidated profits. As a specific initiative, in
September 2019, we concluded a capital and businessalliance agreement with the French asset managementcompany, Tikehau Capital SCA, in which T&D United
Capital is investing. Based on this agreement, T&D AssetManagement will provide asset management products ofa subsidiary of Tikehau Capital to Japanese pension funds.

We aim to continue to expand the asset managementbusiness in the medium- and long-term, as the businessarea with the highest affinity with the life insurance business. In November 2018, with the aim of advancing asset
management and enhancing the asset managementbusiness, we concluded a cooperation agreement with
Payden & Rygel in the United States.
In addition, while contributing to profitability by enhancing the product structuring capabilities of T&D
Asset Management, capital and business alliances with
Growing profits in the asset management business• Aim to expand our asset management business as a core Group business, second only to the domestic life insurance
business, over the medium term.
• Utilize our strengths as a life insurance-group asset management company, and build a differentiated business model.
• Strengthen management of overseas assets, and make contributions to Group profits and life insurance asset management.

Strategy 1): g row T&D Asset Management profits• Grow assets under management by leveraging ourstrengths in structuring of products• Utilize network of domestic and overseas asset management companies• Contribute to more sophisticated asset management of the Group life insurance companies

Strategy 2): s trategic investments in overseas
asset management companies, etc.
Synergistic effects• Use business/capital alliances with overseas asset
management companies, etc., to strengthen productstructuring capabilities and the Group’s life insurance asset management capabilities• Contribute to Group consolidated profits
Levels to aim at 5-6 years from now

T&D Asset Management investment trust assets under management
More than 1.2 trillion yen(Trillions of yen)

1.18
1.06

Approximately 1.4 trillion yen

Stable,sustained expansion

1.14

0.73
0.61

2014

2015

2016

2017

2018

2019

2020

2021

Establishment of a New Specialized Market (The Millennials)
In order to capture the insurance needs of the young
millennial generation, which the Group has not heretofore sufficiently focused on, we will create alliances with
providers of digital platforms, and build new specialized30

T&D Holdings INTEGRATED REPORT 2019

markets. As the channels available for purchasing insurance policies become increasingly diverse, we will provide
new products and services through the use of digital marketing, in order to expand our customer contact points.

3. Evolution of Group Financial Strategy

Promote financial strategy (capital management) and growth strategy (bolstering core businesses anddiversifying business portfolio) as two sides of the same coin, in order to improve Group capital efficiency.

Growth strategy

Financial strategy(strengthen core businesses/diversify business portfolio)(capital management)
Investment

Pursuit of specialized strategies
by life insurance companies

ReturnInvestment

Building of
new life insurance channels

ReturnInvestment

Business investment aimed atdiversifying revenue sources

ReturnProcurementof funds• Management balancing
economic value andfinancial accounting• Efficient utilization ofGroup capital

Returns• Shareholder return that take
into account capital efficiency• Systematic reductions incross-shareholdings

Information
disclosure

Higher Group capital efficiency

to diversify our business portfolio, we will efficiently utilize
the Group’s capital, through combinations with optimal
selections of external capital. Furthermore, we will proceed with a systematic reduction of cross-shareholdings.

Financial markets (shareholders, creditors, etc.)

By promoting integrated Group ERM, and based on an
expansion of our corporate value (embedded value), theGroup is performing business management that considers
the balance with financial accounting. In addition, in order

Shareholder Return Policy
The basic framework incorporates new reference indicators, while maintaining the previous medium-term management plan. We will implement shareholder returns
that contribute to an even further improvement in capital efficiency.
Regarding cash dividends, we will strive to provide
stable dividend returns, such as an Adjusted DOE of 3%

as reference. In addition, we will implement flexible sharebuybacks that take the EPS growth rate into consideration. Accordingly, we will comprehensively determine thetotal payout ratio, while taking into account an Adjusted
ROE of approximately 8% by the final year of the medium-term management plan, in addition to ensuring aratio of 40% or more of net income.

• Total payout ratio to be set flexibly, taking into account capital efficiency (Adjusted ROE). (However, to be 40% and above of profit available for shareholder return)• The objective for cash dividends is stable, sustainable increases, using Adjusted DOE as reference.
• The value of share buybacks will take into account the amount of total payout, and the level of EPS.

<Basic approach>Total payout ratio

Cash dividends

Share buybacks

Adjusted ROE
Around 8% in final fiscal year

Adjusted DOE
Around 3%

EPS growth[Net income / stockholders’ equity][Total dividends / stockholders’ equity][Net income per share](40% and above of profit available
for shareholder return)[Referenceindicators]

T&D Holdings INTEGRATED REPORT 201931

Try & Discover for Creation of Shared ValueFY2019-FY2021 T&D Insurance Group Medium-Term Management Plan

Try & Discover 2021 —Creation of Shared Value—
4. Promotion of Integrated Group Management

Promotion of Integrated Group Management to Steadily Implement Growth Strategies
In order to steadily implement the growth strategiesof the medium-term management plan, we will further
promote integrated Group management. As a first step,
we have established the strategic subsidiary, T&D United
Capital. We will proceed by consolidating Group management resources, such as personnel and funds.
In addition, we plan to further leverage synergies within
the Group, such as by mutually supplying products between Group companies, and through the sharing andproper allocation of Group management resources.
In terms of cultivating human resources and building
awareness, based on the new brand message of “Towards
a New Dimension of Insurance,” we will demonstrate theGroup’s comprehensive capabilities to create innovation
through our innovative and challenging Group culture. In
addition, we will further promote integrated Group social
activities, with the aim of creating shared value.

Taiyo Life

Daido Life

Pet & Family
Insurance

T&D
Financial Life

T&D Asset
Management

Bringing together ofmanagement resources(strategic subsidiary)• Integrated Group promotionof diversification of businessportfolio• Establish strategic subsidiary, andbring together Group resources

T&D
United Capital

Leveraging synergies
within the Group• Further promotion of mutual
supplying of products• Sharing and appropriate allocation of Group management
resources (personnel, funds,
know-how)• Bringing together of specialized personnel in strategic subsidiary, allocation of Group capital• Exchange of personnel between Group
companies, sharing of best practices• Cooperation with T&D AssetManagement in order to strengthen
asset management

32

T&D Holdings INTEGRATED REPORT 2019

Penetrating Group culture• New brand message“Towards a New Dimension of Insurance.”—> Integration of Try & Discover DNA into
the Group and using it to appeal externally• Integration of Group social
activities aimed at creation ofshared value•P romotion of initiatives based onGroup CSR Activity priority themes

Medium-Term Management Plan Targets

T&D Insurance Group‘s Medium-Term Management Plan targets (consolidated)
In fiscal 2021, which is the final year of the medium-term
management plan, we aim for ¥170.0 billion or more invalue of new business, and a fiscal 2018 level (¥73.0 billion) or more in net income, through steady growth in the
results of the three core life insurance companies.
The steady accumulation of policies in force and the
securing of stable investment income, which mainly comprises interest, dividends, and income from real estate
for rent, form the basics of the business management of
the Group, the core business of which is domestic life
insurance. In fiscal 2019, the first year of the medium-term
management plan, we forecast a decline to ¥64.0 billion

in net income, due to a cautious outlook arising from thecurrent economic and financial environment.
However, through various strategies, such as a strengthening of our core businesses and the diversification of
our business portfolio, we aim for net income of ¥100.0
billion during the next medium-term management plan.
In addition, we have set Group MCEV, which was a key
performance indicator of the previous medium-term management plan, at a medium- and long-term target levelof ¥4.0 trillion, based on a continued recognition of its
importance as an indicator of the corporate value of thelife insurance business.

T&D Insurance Group‘s Medium-Term Management Plan targets (consolidated)

Medium-Term
Management
Plan targets(Reference)
Medium- tolong-term
target levels

Economic
value

Value of new
business• FY2021: 170.0 billion yen and above

Financialaccounting

Net income• FY2021: FY2018 levels (73.0 billion yen) or higher

Economic
valueGroup MCEV

Financialaccounting

Net income[Core ROEV*1: 5% and above for three years]•	Next medium-term management plan: 4.0 trillion yen(As of end of March 2019: 2.6 trillion yen)

[ROEV*2: Stable and sustainable growth over 7.5% in the medium- to long-term]• Next medium-term management plan: 100.0 billion yen

Note: The ultimate forward rate (UFR) has been applied to both the ESR measurement model and the MCEV calculation, beginning with the medium-term management plan. The aim of this change
is to further increase the sophistication of our measurement models, so that they can assist in management decision-making over the medium- to long-term, taking into account discussions
regarding the international regulation of capital, and the comparability of disclosure.
The UFR has been applied to both medium-term management plan targets based on economic value and medium- and long-term target levels (value of new business, Group MCEV).
*1: (Embedded Value of new business + Expected existing business contribution from risk free rate) / Average of EV *2: Annual increase in EV (less capital movements) / Annual average of EV

T&D Holdings INTEGRATED REPORT 201933

Try & Discover for Creation of Shared Value

Special Feature
Chief Environmental and Social Strategist
Environmental Strategy Advisory Division
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
Part-time Lecturer at Keio University Graduate School

Representative Director and President
T&D Holdings, Inc.

Mari Yoshitaka

Hirohisa Uehara

Creating Shared Valueby the T&D Insurance GroupWe invited an expert to exchange opinions on the initiatives of the T&D Insurance Groupon the theme of “creating shared value” in the Medium-Term Management Plan.

34

T&D Holdings INTEGRATED REPORT 2019

1. Changes in the roles of companies expected by society
Yoshitakaimprovement in corporate value in the future.

I have been involved with environmental finance-related

Ueharabusinesses for many years, and I received requests aroundWe were listed 15 years ago as an insurance holding

2014 or 2015 from institutional investors who wanted

company, a first for a life insurance company. The Group’s

to study topics related to the environment. My job has

corporate philosophy is “With our ‘Try & Discover’ mottochanged significantly since then. I remember being

for creating value, we aim to be a group that contrib-

surprised because I did not initially expect financial insti-

utes to all people and societies.” This philosophy does

tutions to turn their attention to environmental issues so

not seem outdated and is really well matched with ourquickly. I get the impression your company incorporated

current times. I do not think it will change in the future

the perspective of what is now called “ESG” in your busi-

either. Since I assumed the role of President in April ofness at a relatively early stage.

last year, we have carefully considered the new Medium-

UeharaTerm Management Plan while holding detailed talks overWe have a pioneering spirit in areas where others have yet

the past year. Something that I also realized when I wasto venture, for example, the Group was the first company

appointed President is that corporate philosophy is reallyin the life insurance industry to become listed. When I was

important. We often hold dialogues with shareholders

involved in asset management at Taiyo Life and managing

and investors on profits. Going back to our origins, weinsurance premiums entrusted by customers, I decided it

realize that having a relationship with customers over an

was necessary to incorporate ESG issues within the fidu-

extremely long period of time is the business model ofciary duty in the investment and lending decision-making

a life insurance company. For that reason, the mission ofprocess, and so I studied qualitative standards. Because

a life insurance company is to continue healthy growth

the PRI (Principles for Responsible Investment) provided

as a corporation. In light of the business characteristic of

us with a field to consider these issues, in 2007 we became

having to sustain business so we can make payments tothe first Japanese life insurance company to sign the PRI

customers without fail when they are in need, we renewed

to serve as qualitative standards for investment and lend-

our focus on this corporate philosophy and incorporated

ing that could be incorporated in asset management. The

it in our new Medium-Term Management Plan, thus mak-PRI have recently spread among institutional investors ining the creation of shared value as the theme. However,Japan as well at considerable speed.

this may not seem like something new for you because

Yoshitakacreating shared value (CSV*2) is something that has been

I think that evaluations of businesses based on theiraround a while from your perspective.

efforts to improve social issues through the core businessYoshitaka

are finally beginning to take root in Japan. While I think in

I do not think concepts like CSV have spread that muchmany cases Japanese companies were founded with anyet. CSR activities are just something conducted by en-

aspiration to resolve social issues, this type of information

vironment-related departments, and I do not think there

disclosure has been neglected because it is so obvious.

are many companies where it has really been instilled

I believe this is beginning to change. What Japaneseamong each and every employee as a part of the DNA

companies really need to do now is something that is onlyof the company. There are still many executives who arenatural: to go back to the origin of why they were found-primarily focused on how ESG initiatives will affect theed in the first place. You often say that the “the future isstock price, so I think it is a really good thing to again go

not an extension of the present,” and I think that such an

back to the origins.

era has really come now. When I look at materials includ-

Ueharaing your company’s CR Report*1, I feel that information

We have a long history of over 100 years with our three

is being communicated with a focus on the perspective

main subsidiaries: Taiyo Life, Daido Life, and T&D

of resolving social issues through the core business. I am

Financial Life*3. A company’s development and the history

personally really interested in seeing how this leads to anof growth is vertical change and horizontal continuation.

*1 Name changed to the “Sustainability Report” for reports issued from fiscal 2019. *2 Stands for “creating shared value,” a management strategy of using the strengths of a company to resolve
social issues, and in doing so, contributing to its sustainable growth. *3 Including the era of the predecessor, Tokyo Life.

T&D Holdings INTEGRATED REPORT 201935

Try & Discover for Creation of Shared Value

The horizontal continuation is the company history, andthings they can do, and they do not communicate much ofvertical changes are in the economic and capital en-a message on their resilience in response to these kinds ofvironments and the needs of customers at that time. I

vertical changes that you mentioned. I think these are thebelieve that conducting management while responding

types of message that are needed in society now.

to change leads to continuity. The driving force for this is

Ueharathe Group’s tangible and intangible corporate value andWhen I visit investors on IR visits, they often ask me about

its individuality, which is a part of this value. Furthermore,

how Japanese life insurance companies will survive andlooking at the companies that were able to survive thegrow as the population constantly decreases, due to de-financial crisis, I feel they were ones that society recog-

clining birthrates and an aging population. Indeed, while

nized as having existential value and that companies

the population will fall and the number of elderly people

without such value were weeded out. Considering this, I

will rise, this presents opportunities with the Group’s

think that the starting point may be being a company thatbusiness model. For example, managers of SMEs are theis required by society as a necessary presence.

main customers of Daido Life, and there may be various

Yoshitakabusiness opportunities for us if we face and help to re-

Although Japanese companies work with sincerity in thesolve current social issues with them, such as the lack ofvarious things they do, they only tend to disclose thebusiness successors when they come of age.

2. Efforts aimed at creating shared value
UeharaYoshitakaOver a decade ago, CSR mainly consisted of social-con-

I agree. For CSR, in many cases companies communicate

tribution and volunteer activities. While volunteer ac-

information to society at large about what a good com-

tivities are extremely important, there were not manypany they are, and as you mentioned, I think it is good to

discussions about how to achieve an affinity with the core

think about CSR in terms of business opportunities. Frombusiness from the perspective of a listed company. This

this viewpoint, I think the SDGs are a really good commu-

has changed recently, and I think the time has come for

nication tool. They have been truly incorporated in thecompanies to clearly indicate what they are aspiring to

new Medium-Term Management Plan.

and their approach to those aspirations.

UeharaWe are not able to cover all of the SDGs from the viewpoint of the characteristics of our business and ourmanagement strategy. At any rate, we have actively
incorporated and discussed those that are closely related
to needs that broadly involve the life insurance business,
which is our core business. We have also been able todemonstrate the linkage with SDGs in the new MediumTerm Management Plan.
Yoshitaka
The other day, more than 80 people participated in an
SDGs seminar for institutional investors that we held. I
think it was when the Government Pension Investment
Fund (GPIF) signed the PRI in 2015 that we first got involved with ESG in Japan. Although it seems that ESG
investors are now evaluating companies on the resolutionof SDGs issues, there are companies that have not really36

T&D Holdings INTEGRATED REPORT 2019

addressed the SDGs up until now. They often consult withme because they are not sure where they should start andwhat they should do. I believe that SDGs will become atool for communication with all stakeholders going forward, and I also believe that how information on SDGs iscommunicated will differ depending on who is being communicated to, for example, whether the person is an investor or a student. For instance, the other day when I was
talking with a student I teach at the university, the student
told me about how excited they were when a company
told them that “this company will grow through the SDGs”
during student job-hunting activities. For this reason, SDGs
could be effective from the perspective of appealing tohuman resources newly entering the job market.
Ueharasophisticated products and services to customers.

I think that SDGs are an extremely good tool for facilitat-

Taiyo Life became the first company in the industry to

ing a back-and-forth communication with stakeholders.

release dementia insurance three years ago*4. It has been

However, it should be done in a manner so that it does

said that one in seven people age 65 and above are at

not become a mere formality.

risk for dementia. Over 500,000 people are currently

Yoshitaka

enrolled in dementia insurance, and it has proven to be

I have the same view. While the SDGs run to 2030, yourvery popular. If you enroll in this insurance, you can use

company will continue doing business 30 and 50 years

your smartphone to automatically measure the number

from now. The other day, I told some investors that whatof steps you take and walking speed, and share this data

they have to evaluate goes beyond SDGs projects.

with registered family members. In this manner, insurance

Ueharaproducts are making a shift to protecting health and

The life insurance business is a field that involves people’s

preventing disease through means, such as the provision

lives. There are issues that have to be addressed nonstop,of tools for health management and prevention together

such as health and supporting seniors. In light of this, wewith services.

are working to contribute to SDGs that match the busi-

Yoshitaka

ness model and characteristics of each Group company,

That is a great idea. Because everyone is focused as awhile linking together the relatively wide area of SDGs toprofessional, you know a lot about those types of needs.

our actual work.

I have held a lot of seminars on ESGs and SDGs for SMEs

Yoshitaka

recently. What kind of initiatives for SMEs is your company

The life insurance industry itself is related to SDGs, andinvolved with?

I think the relation makes them very effective tools. For

Ueharaexample, “Himawari Dementia Prevention Insurance,”

It has been said that if employees including managers

released by Taiyo Life, can help with prevention of theare healthy as a result of health and productivity manage-

condition if people know about it from a relatively young

ment, that company will be more productive and moreage. I would like you to continue communicating new

profitable as well. However, things are not so easy forideas like this in the future.

SMEs with limited numbers of employees. Their healthUeharaefforts may only consist of a health examination once a

One characteristic of the Group is that it has three ex-

year. Daido Life is offering a comprehensive program*5

tremely independent and specialized life insurance com-that includes health-examination record management,

panies as subsidiaries, which have completely different

encouraging employees to get a health examination, andmarkets, products, and channels. Our business model

health-risk analysis in an effort to ensure that employees

is to deploy management resources to the segment ofstay healthy.

the market that is being focused on, and provide more

In addition, in response to the issue of business*4 “Himawari Dementia Treatment Insurance” was launched in March 2016. It is the first insurance product covering dementia in the life insurance industry as a relaxed-underwriting type product(based on research by Taiyo Life).
*5 Daido Life’s “KENCO SUPPORT PROGRAM”

T&D Holdings INTEGRATED REPORT 201937

Try & Discover for Creation of Shared Value38

succession, we are working to protect SMEs throughsomething I have thought of since becoming President ismeans that also go beyond insurance including busi-

that management with a social focus by companies leads

ness-succession support in cooperation with external in-to sustainable growth. I believe we are ultimately able tostitutions. We approach marketing, product development,

produce profits and major benefits for shareholders by

and service from the perspective of the customers, based

providing products and services that really meet needson our knowledge and experience up until now and thewhile valuing our employees, business partners, and cus-needs of the customers, so that we can meet their needs

tomers. From this perspective, it is extremely important for

more quickly than other companies.

employees to feel happy and healthy in their work. For thisYoshitakareason, Group companies are pursuing substantial mea-

“Quickly” is an important point. Japanese companies aresures rather than mere formalities in personnel systems,

not really that good at being quick.

work style reforms, and the active participation of women.

UeharaFor example, the retirement age was extended at Taiyo

Social issues are also customer needs. As a life insuranceLife last year in April, and it is now possible to work up

company with a business model specialized on suchto age 70. I think this is a particularly significant point inissues, we work to design specific products and services

terms of improving productivity as the working popula-and offer them as quickly as possible. Going forward, wetion decreases.

can expand our share in the Japanese life insurance in-

Yoshitaka

dustry and achieve sufficient growth in Japan. We also be-

There has been a lot of data from overseas that demon-

lieve it is necessary to grow while co-existing with society.

strates a correlation between companies that are actively

Yoshitakapromoting the participation of women and stock priceIf there are no challenges, then no services will be born toperformance. Indices that incorporate this have also been

respond to them. While it would be ideal for all challeng-

started. I think it is great that this is not only a priority

es to disappear, that is not very realistic. You mentioned

theme for your company’s CSR, but also a human resourc-

earlier that overseas investors sometimes ask you about

es initiative. When speaking of ESG, G is fundamental anddeclining birthrates and the aging population in Japan.

while E and S are not necessarily parallel, the importance

Related to this, there has been an increase in foreign work-of the elements of ESG differs by industry. I think that yourers. Has the company done anything in response to this?

company is really working to address the themes that are

Ueharaimportant for your company. I do not think it will be too

Daido Life has started policy procedures enabling for-far in the future when various indices overseas evaluate

eign employees to enroll. It has been difficult until now

the relationship between performance and ESG. I think it

for foreign workers and other Japan residents who areis very important how ESG initiatives are communicated,not capable of speaking Japanese to enroll in insurance

and this is something that applies to all companies.

in Japan. However, Daido Life made it possible to enroll

Ueharausing eight languages from June of this year and it is

We do not make things that are clearly visible, so weproviding services that make people feel more reassured

really have to be engaged in development and training

about working in Japan. I think it is important to keep on

to improve the skills of our employees. How the Groupmaking small steps like these to support the vitality andcommunicates with society is also important.

management of SMEs that are fundamental for Japan.

Yoshitaka

Yoshitaka

What points are being focused on in the new Medium-

I agree. I think the “S” part of ESG, particularly diversity,

Term Management Plan?

will be a major point for organizations so that Japanese

Ueharacompanies can flexibly respond to dramatic changes

We intend to grow our business domains and businessincluding declining birthrates and the aging population

model by working on six business themes aimed at cre-going forward. What kind of initiatives are there for inter-ating shared value. We will diversify our business port-

nal diversity while supporting the diversity of customers?

folio because it might not be possible to respond to the

Ueharachallenges faced through our existing businesses alone.

While this may diverge a bit from the topic of diversity,

However, this diversification will only include businesses

T&D Holdings INTEGRATED REPORT 2019that have some affinity to life insurance-related busi-

business themes and CSR priority themes. I talked about

ness in Japan for which collaboration is possible. For

the Medium-Term Management Plan in a conceptual

businesses required as life insurance-related businesses

manner at the beginning, and we have already imple-

in Japan in the future other than those covered by ourmented concrete measures to a degree. By articulating

three life insurance companies, active investments will bethese measures internally and externally, I would like tomade mainly by the holding company. We will work to

make a strong appeal for the direction and approach of

create shared value while mutually connecting these six

the Group.

3. “Creating shared value” in the future
Yoshitaka

I hope your company takes the lead in demonstrating

Investors in the U.S. are trying to use ESG as a tool for

corporate growth through the SDGs.

creating a new market, and they have made signifi-

Ueharacant progress in stock price research related to this.

According to one paper, people who feel happy are

Meanwhile, there are many people in Europe who areabout 30% more productive at work than those who arefocused on sustainability. Furthermore, because there arenot, and they are also three times as creative. The sum

few disasters in Europe, many people have felt a sense ofof the “psychological capital” of workers can determine

crisis toward climate change recently and there is begin-

a company’s rise and fall. People feel satisfaction andning to be a change in sentiment. I think that ESGs will

fulfillment by contributing and being necessary to soci-become increasingly important in Japan in the future. I

ety. If you make employees happy, it makes the company

think there should be more information disclosure be-happy, and this makes society happy. This happiness hascause if there is nothing to compare such as the status ofa very positive effect on the economic environment andefforts, it is difficult for it to be reflected in the stock price.

leads to sustainable growth. I intend to continue working

Ueharahard at “creating shared value” in the future.

I think it will be important in the future whether companies that are making society better can demonstratestrong leadership. According to one study, when asked
about the meaning for the “existence of companies,”
more people from the millennial generation responded“to make society better” than “to produce profits.” I thinkthat ideas about what companies should be doing are
beginning to change.
From the perspective of making society better, I thinkthat disclosing information on efforts to the market will
become more and more important for understanding andverifying the state of corporate management from theviewpoint of ESG and improving transparency. Although
our Group’s business may not be very flashy, I think that
we are a serious and honest company in this aspect. I
would like to make a strong appeal for these qualities.
YoshitakaI think that is a good idea. I hope you are a company forthe next generation that achieves the creation of sharedvalue. Young people are losing their sense of excitement.

T&D Holdings INTEGRATED REPORT 201939

Try & Discover for Creation of Shared ValueBusiness Overview

P.42

Become an insurance company that supports secure andfulfilling lives for even more customers, by proactively
providing to households the best products and services
for the Centenarian Age.
Taiyo Life’s in-house sales representatives make individual home visits, listen to customers’ needs and provide
the necessary coverage.
By developing products that preempt theCentenarian Age and enhancing our sales capabilities
through the utilization of IT, we will help more customers to live longer, healthier lives.
MarketHouseholds

Sales channel

Products

In-house sales
representatives

Comprehensive
coverage including
death benefit andmedical/nursing
care products

P.46

Bringing the greatest peace of mind and utmost satisfaction
to small and medium enterprise (SME) customers
Daido Life provides rational coverage responding to
the various risks and necessary funding preparations ofeach enterprise in order to protect enterprises from a
range of risks and contribute to the stability and development of their business.
The company is building a solid sales structure
through business tie-ups with SME-related organizations and CPTA organizations, etc.
MarketSmall andmediumenterprises(SMEs)

40

T&D Holdings INTEGRATED REPORT 2019

Sales channel

Products

In-house sales
representatives,
Agents(tax accountants,
etc.)

Term
life insurance,
disability
benefit, etc.

P.50

Offering distinctive products and services whichmeet the diversifying needs of customers
T&D Financial Life provides savings-type products
differentiated by types of benefits, and protection-type
products with competitive pricing and benefits throughindependent insurance agents (financial institutions
and insurance shops), which handle products from anumber of insurers.
MarketSales channel

Products

Independent
insurance agent
marketIndependent
insurance agents(financial
institutions andinsurance shops)

Savings-type
products(foreign-currency
linked type, etc.)
Protection-type
products (Income
protection
insurance, etc.)

P.54

Aiming to stay one step ahead on all fronts as an
asset management company, and to create further
value from that point
T&D Asset Management conducts investment trust
business by offering investment trusts through financial institutions, and investment advisory business bymanaging the funds of pension funds and institutional
investors.
Investment
trust business

Provide a wide array of prime investment
products mainly to a broad range of investors
through sales companies (securities firms, etc.)

Investment
advisorybusiness

Provide adequate investment solutions todomestic and overseas pension funds andinstitutional investors

P.55

Pet & Family Insurance
Aiming to serve the needs of all pet owners regarding veterinary care expenses
Pet & Family Insurance provides pet insurance to coverveterinary care expenses mainly through pet shops,
where many prospective pet owners meet their pets forthe first time.
MarketPets market

Sales channel

Products

Agents(pet shops, etc.)

Compensation
insurance for petveterinary careexpenses

T&D Holdings INTEGRATED REPORT 201941

Try & Discover for Creation of Shared Value

Taiyo Life Insurance Company“Healthy, Long Life, Taiyo Life”— Becoming a life insurance company
that supports secure and fulfilling lives —Outlook for Sales Performance Indicators Fiscal 2019
Protection-type annualized
premiums of new policies*

17.0 billion¥

Protection-type annualized
premiums of total policies*

155.0 billion¥*A performance indicator of Taiyo Life which is the sum of protection portion of theannualized premiums mainly excluding savings-type products.

Representative
Director and President

Business Model

Strengths of Taiyo Life

Taiyo Life’s core business is sales of life insurance in thehousehold market. In-house sales representatives visit
homes directly and propose the appropriate coverage foreach household. The mainstay product, Hoken Kumikyoku
Best, allows customers to freely combine the coverage
they need. This enables the company to propose coverage which meets the needs of each household.
The company has thus established a business model ofoffering comprehensive coverage to households by taking advantage of its strengths in the household market.

Taiyo Life’s strength is the capability of its sales representatives to sell protection-type products. It has continued
to grow through “Combination Activity” where sales representatives form pairs on visit to individual households
and developing new customers.
The company leverages its strong ties to households
to propose protection-type products amid the recently
growing demand for coverage for medical care, nursing
care, pensions, disabilities, and other areas in response tosuch trends as a rapidly aging population and a spread of
nuclear families.
The company also sells products that preempt the changes of the times, such as Himawari Dementia Prevention
Insurance, maintaining its pre-eminence in the market byoffering coverage that meets its customers’ needs.

Strengths

Taiyo Life

• Solid foundation in the household market built by the continual
development of new customers through “Combination Activity” where
sales representatives form pairs on visit to individual households

Focused on metropolitan areas/
major regional cities■

In-house sales representatives

Direct home visits

Households

Flexibly designed products
matched to the needs ofcustomers such as for death
benefit, medical and nursing
care protection■

Make coverage proposals
according to the life stageof customers based on
customer information■

Sales representatives workin pairs to provide
meticulous service

Enclose households starting with housewives
Solid customer base: Number of policies
in force is about 8 million

42

Naoki Soejima

T&D Holdings INTEGRATED REPORT 2019

• Offering products that preempt the changes of the times and meetcustomers’ needs• Senior-friendly customer service

Opportunities• Growth of senior population• Growing needs to make self-provision for pension, medical care, andnursing care
• Extension of health span and growing awareness of health promotion
among seniors

Review of the Previous Medium-Term Management Plan (FY2016-FY2018)
Under the previous Medium-Term Management Plan,
Taiyo Life worked to build the top brand in the seniormarket, and to expand business results through triune
sales promotion consisting of “improving services,”“enhancing products,” and “strengthening sales capabilities.” These efforts were based on a vision of “aiming to
be a life insurance company that offers households thebest products and services that preempt the changes of
the times.”
Taiyo Life launched Himawari Dementia Treatment
Insurance in March 2016, as a product that enables customers to live their senior years with peace of mind, andlaunched Himawari Dementia Prevention Insurance in
October 2018, which combines preventative services withcoverage. Taiyo Life also began the Kaketsuke-Tai Service,in which office workers with specialized knowledge personally visit customers’ homes and provide customized

support to ensure that benefits are paid swiftly andsmoothly. Currently, the company is working to enhance
the payment of insurance benefits by developing mobile
terminals, so that in-house sales representatives can perform the same benefit procedures as office workers.
In fiscal 2018, the final year of the previous medium-term
management plan, protection-type annualized premiumsof new policies increased by 5.3% year-on-year to ¥17.2
billion. Among these, Third Sector annualized premiumsof new policies increased by 22.9% year-on-year, due tostrong sales of relaxed-underwriting type products, such
as Himawari Dementia Prevention Insurance. In addition,
MCEV increased by ¥31.1 billion from the previous fiscal
year-end to ¥856.2 billion, mainly due to the accumulationof value of new business. Value of new business increased
year-on-year to ¥55.3 billion due to solid sales results.

Protection-type Annualized Premiums of New Policies

Third Sector Annualized Premiums of New Policies(¥ billions)20(¥ billions)
20

15

14.8

15.5

17.0

16.3

17.2

16.3

15

10

10

5

5

0

13.4

13.3

2016

2017

11.5
9.4

0
2014

2015

2016

2017

2014

2018

2015

(Fiscal Year)

MCEV(¥ billions)
900

2018
(Fiscal Year)

Value of New Business
868.6
725.7

777.5

825.0

856.2

(¥ billions)
60

55.3
44.2

40

600

40.9

32.5
300

20

0

18.1

0
Mar. 31, 2015

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2018

Mar. 31, 2019

2014

2015

2016

2017

2018
(Fiscal Year)T&D Holdings INTEGRATED REPORT 201943

Try & Discover for Creation of Shared Value

Taiyo Life’s Medium-Term Management Plan (FY2019-FY2021)
Vision of the Medium-Term Management Plan

Become an insurance company that supports secure and fulfilling lives for even more customers,by proactively providing to households the best products and services for the Centenarian Age.

Going forward, as the total population of Japan declines,
the population in the over-65 senior segment will continue to increase, and in 10 years will account for 30% of thetotal population. It is said that one in five of over-65s will
have dementia by 2025. In addition, with the highlightingof the financial difficulties of the social security system(public pension, medical care, and nursing care), it is expected that preparations towards “longevity risk” will be
required, such as in retirement and failing health, throughfurther self-help efforts. Against such a social backdrop,
it is expected that the senior segment will expand in thehousehold market, which is the main market of Taiyo Life.
In anticipation of such changes in the environment, in its
medium-term management plan, the company will makefurther efforts to build the top brand in the senior market,
based on its vision to “Become an insurance company

that supports secure and fulfilling lives for even more customers, by proactively providing to households the bestproducts and services for the Centenarian Age.”The company has established an environment in which it
can focus on creating new value through a significant reduction in office work, due to previous business reforms,
and an enhancement of operating efficiency via the Taiyo
Life Concierge, a new mobile terminal introduced inAugust 2018. Through the medium-term management
plan, the company will strive towards the realization of ahealthy society where people can enjoy their long lives,
under its catchphrase of “Healthy, Long Life, Taiyo Life.”
As a life insurance company that strives to stay close to
the lives of its customers, the company will realize support
for a healthy and long life for even more customers.

In-house sales
representatives➤ Product evolution

・Provide products for the Centenarian
Age ahead of the curve➤ Strengthen sales capabilities

・Strengthen sales capabilities throughuse of Concierge
・Expand the in-house sales representative organization by reinforcing the
education system

AgentsGroup insurance➤ Providing survival benefits
ahead of the times➤ Higher sales efficiency at agents➤ Utilization of information
technology (paperless,Internet, etc.)➤ Enhanced education andtraining for agents recruited➤ Proposing new benefit systems
based on the Centenarian
Age and work-style reforms➤ Open up new/growth markets➤ Deep cultivation of existing
policyholders and close
relationships

VisionAchieving
goals

Increase incustomernumbers

Services supporting sales (Kaketsuke-Tai Service, integrated products and services, etc.)
Increase inpremium
incomeAsset Management Strategy
expand investment income through more sophisticated asset management.
Expand credit investment/alternative investment, control hedge costs and diversify capital resources, strengthen management system

Organization andhuman resource strategy
Enhancing HR development, restructuring its branch andhead office organization

44

T&D Holdings INTEGRATED REPORT 2019

Increases incore profit
Management platform strategy
Capital, IT, business, and governance structures

Increase Corporate Value

Sales Strategy

Helping more customers live longer, healthier lives

Overall Strategy of Medium-Term Management Plan

Sales Strategy
Helping more customers live longer, healthier lives
In the medium-term management plan, in addition to having in-house sales representatives visit households in pairs,
which is one of Taiyo Life’s strengths, the company will strengthen the sales structure for its agents and corporate insurance, and provide new products and services that leverage their characteristics. During the medium-term management
plan, the company will continue to develop new growth markets that capture the needs of society, while working to deliver peace of mind to even more customers.
In-house Sales Representatives
Products that preempt the Centenarian Age
Taiyo Life has developed products that preempt thechanges of the times. While for many years, the company
focused on savings-type products targeting the householdmarket, it has recently shifted to protection-type products.
Following this shift, in light of the fact that customers in
the household market will also age due to the progressof the aging society, it launched Himawari Dementia
Treatment Insurance in March 2016 to capture the needsof seniors. In October 2018, the company launched
Himawari Dementia Prevention Insurance, and has developed its products, as well as the provision of prevention
insurance, in addition to treatment of diseases.
As we head into the Centenarian Age, providing prevention of nursing care and diseases is becoming extremely
important, together with the provision of coverage fordementia, in order to support the healthy longevity of its
customers. Taiyo Life is working to enhance survival benefits, such as medical and nursing care benefits, as well
as benefits and services to prevent dementia and otherdiseases.
Strengthening sales by utilizing IT
In 2012, Taiyo Life introduced the Insurance Policy
Support System. This system realized paperless policy
applications, enabling insurance policy applications to becompleted by customers who have signed on to mobile
terminals carried by in-house sales representatives. In
addition, in August 2018, the company introduced the
Taiyo Life Concierge (hereinafter, the “Concierge”), whichis equipped with new functions that enable on-the-spot
responses to a variety of customer requests, realizing
enhanced operating efficiency as well as the evolution of
its customer service.
In the medium-term management plan, the company will work toward the further development of various
functions of the Concierge, such as by advancing its sales
support functions, and will also aim to strengthen thecompany’s sales capabilities from an IT perspective.

AgentsProvision of simple survival benefits
In the agent channel, Taiyo Life has enhanced sales efficiency while responding to customer needs, by providing
simple and easy-to-understand products at the reception desks of financial institutions. In the medium-term
management plan, the company will continue to provide products that match the market environment andcharacteristics of financial institutions as agents, such asprotection-type products for dementia and other diseases
and wealth-accumulation products, while responding tocustomer needs. In addition, the company will increase
sales volumes by expanding its agents and enhancing
sales efficiency.
Group Insurance
Provision of new welfare systems
With the raising of the retirement age and increases in
the number of non-regular employees, the environment
surrounding the corporate insurance market is changing.
Taiyo Life aims to develop untapped markets and industries that are expected to grow in the future, throughthe provision of new welfare systems that are based on
the Centenarian Age and work style reforms. In addition,
Taiyo Life will enhance convenience for existing customers, simplifying enrollment processes through the utilization of IT.

Utilizing the Taiyo Life Concierge

T&D Holdings INTEGRATED REPORT 201945

Try & Discover for Creation of Shared Value

Daido Life Insurance Company
Leading a New Era of Corporate Coverage
Outlook for Sales Performance Indicators Fiscal 2019
Policy amount in force*

New policy amount*¥¥

46,910.0 billion

3,760.0 billion* Includes the individual insurance and individual annuities, the insurance amounts of J-type
α product (non-participating critical illness insurance), T-type α product (non-participating
disability protection insurance) and the nursing-care insurance amounts of Kaigo Relief α(non-participating whole life nursing-care insurance) and so forth.

Minoru Kudo

Representative
Director and President

Business Model

Strengths of Daido Life

Daido Life is a life insurance company that specializes in
the SME market, with contracts with some 370,000 corporate clients. The company has focused on developing andselling term life insurance since the 1970s, considering
it to be the optimal product for companies as it secures
greater coverage at a lower premium.
Specifically, the company, which ties up with SMErelated organizations and CPTA (Certified Public Tax
Accountant) organizations, positions the offering of its
products and services designed according to the organization’s characteristics (partner-specific products) as itscore business. The company has established a uniquebusiness model of offering these products and services asa benefit and welfare system for the SMEs, through twochannels of in-house sales representatives and agents.

Daido Life’s strengths are the superiority of its businessmodel, which has numerous points of contact with SMEs
and their owners, as well as its full lineup of corporate
products, and its management resources suited to market
development, including the know-how to promote protection-type products based on the standard coverage*
accumulated over many years.
Additionally, the insurance needs not only of corporations but their owners as individuals are growing andbecoming more diverse due to such factors as aging
population, and the company will solidify its position as aleading company for the life insurance business targeting
the SME market by steadily offering a “proposal of total
protection integrating both corporations and individuals.”National
Federation of
Corporate Taxpayers
Associations
Tax Payment
Associations

Main welfare systems
outsourced to Daido LifeTKC National
Federation

Daido
Life

CPTA
Cooperative
Associations

Keieisha Ogata Sogo
Hosho Seido, of NFCTA

Guide to welfare systems
In-house sales representatives(approx. 3,700)
Agents(approx. 14,000)

Chambers ofCommerce andIndustry and Similar
Organizations

Enterprises(customers)

Establishment ofrisk management

Daido Life has contracts
with approximately

370,000 corporate clients**As of March 31, 2019

Strengths• Superiority of business model

Keieisha Ogata Sogo
Hosho Seido, of TPA• Accumulation of management resources suited to developing thecorporate market

TKC Kigyo Boei Seidoof the TKC National
Federation• High-quality customer-support framework• Comparatively sound finances

The Comprehensive Business
Security Plan of CPTA
Cooperative Associations

Opportunities*Standard coverage
If an SME owner or officer becomes unable to work due to death or critical illness, someamount of money is expected to be required by the enterprise and family. Daido Life calls
such amount “standard coverage” and calculates it in terms of both the amount needed
to protect the enterprise (business defense reserve) and the amount needed to protect thefamily (corporate officer retirement benefit reserve).

46

T&D Holdings INTEGRATED REPORT 2019

• Growing and increasingly diverse customer needs- Growing need for disability benefit due to aging population andother factors- Growing need for business succession and inheritance measuresdue to tax reforms and other factors• Increasing awareness of health promotion• Progress in digital technologies enabling new operational innovations

Review of the Previous Medium-Term Management Plan (FY2016-FY2018)
Under the previous medium-term management plan,
Daido Life aimed to steadily and sustainably increase its
corporate value. To this end, it evolved its core businessby enhancing its disability benefit field in the corporate
market (“further penetrating core markets”), and developed the SME owner and individual business ownermarket (“creating and expanding new markets”). In
addition, it also improved customer service, productivity,and efficiency through operational innovations in its sales
activities and administration.
In fiscal 2018, the final year of the previous medium-term
management plan, there were major changes in both theindustry and the regulatory environment. These included
a revision of the standard mortality table (April 2018), as
well as considerations (February 2019) regarding revisions
to the tax treatment of term life insurance in corporate
policies (see Topics below).
In terms of the sales results for fiscal 2018, the newpolicy amount was ¥8,474.8 billion (162.0% compared tothe previous fiscal year) and the policy amount in force

was ¥47,146.0 billion (110.1% compared to the previous
fiscal year-end). This was mainly due to favorable sales ofrenewal-type individual term life insurance (R-type product) and income guarantee insurance (Shunyu Relief ), therates of which were lower due to premium rate revisions
accompanying the revision of the standard mortality
table, as well as increases in Kaigo Teiki Hoken(nursing-care term life insurance) launched in October
2017. In response to the tax review policy, although Daido
Life suspended sales of term life insurance with surrender
value from February 2019, the impact on the sales results
for the full year was not significant.
MCEV decreased by ¥55.4 billion from the previous fiscal
year-end to ¥1,417.7 billion, due to a decline in domestic
interest rates. Value of new business was ¥84.8 billion, on
par with the previous year. This reflects the increase in
new policies that offset a fall in profitability resulting frompremium rate revisions, and negative factors, especiallythe decline in interest rates.

New Policy Amount

Policy Amount in Force(¥ billions)
9,000(¥ billions)
50,000

New policy amount
Share of disability benefit products and nursing-careinsurance products*

8,474.8

Policy amount in force
Share of disability benefit products and nursing-careinsurance products*
42,803.5
40,992.2
39,205.9
38,156.7

47,146.0

6,000
5,231.4

5,121.1

5,299.5

4,315.5

4,063.8

25,0003,000
10,0002,647.6
0

657.0
2014

2015

10,387.9

1,023.8

827.0
2016

0
2017

* Disability benefit products are the sum of J-type product and T-type product; nursing-care insurance products are the sum of Shunyu Relief, Kaigo
Relief, and Kaigo Teiki Hoken.

2018(Fiscal Year)

MCEV

1,764.3
Mar. 31, 2015

3,288.8

2,455.9

Mar. 31, 2016

Mar. 31, 2017

5,652.9

Mar. 31, 2018

Mar. 31, 2019

* Disability benefit products are the sum of J-type product and T-type product; nursing-careinsurance products are the sum of Shunyu Relief, Kaigo Relief, and Kaigo Teiki Hoken.

Value of New Business(¥ billions)
1,500

1,417.4

1,306.7

1,473.2

1,417.7

84.2

84.8

2017

2018

74.3
1,078.0

1,000(¥ billions)
90

60

500

58.1

34.6

30

0

0
Mar. 31, 2015

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2018

Mar. 31, 2019

2014

2015

2016

(Fiscal Year)

Topics

Revisions to the tax treatment of term life insurance in corporate policies

In June 2019, the National Tax Agency partially revised the “Establishment of the Fundamental Directive of Corporation Income
Tax” (directive on interpretation of laws). Accordingly, the tax treatment regarding insurance payments of term life insurance has
been changed, and a new tax treatment is applied to policies with a policy date on or after July 8, 2019.
Daido Life suspended sales of some products from February 2019, when the review policy was presented by the National Tax
Agency. From July 11, the company began sales of the new L-type α, J-type α, and T-type α products, which are able to respond to
the diverse needs of customers under the new tax treatments.
T&D Holdings INTEGRATED REPORT 201947

Try & Discover for Creation of Shared Value

Daido Life’s Medium-Term Management Plan (FY2019-FY2021)
Basic Policy of Medium-Term Management Plan

By viewing environmental changes as a growth opportunity, and taking up the challenge of structural transformation that transcends current frameworks in various business domains, we will refine ourapproach of “providing a full-range of protection integrating both corporations and individuals” tobecome an insurance company that leads the next era of corporate coverage.
Daido Life’s medium-term management plan, “Go Beyond
Daido 2021” is a three-year plan to establish an unshakable
presence (market share) in the SME market, under the new
tax treatments.
As a result of the large-scale entry of major life insurancecompanies into the SME market in recent years, and thesubsequent review of the tax treatment for term life insurance, the sales and competition environment of Daido Life’score market has changed dramatically. In addition, the number of SMEs is decreasing along with the decrease in theworking-age population. In order to expand contact withsuch SMEs, there is a growing need for the integrated reform of products, services, and channels, as well as increases in production efficiency through the utilization of digitaltechnologies. Meanwhile, with increasing interest in disease

prevention and health promotion, the role to be played by
Daido Life is expanding further, such as a diversification ofmanagement issues for SMEs, including labor shortages.
Based on the above, Daido Life will further solidify thesustainability of its core business through a structural transformation that transcends current frameworks in various
business domains, including sales, insurance underwriting,and office work, while strengthening its core strategy of“providing a full-range of protection integrating both corporations and individuals.”
In addition, through co-creation with various partners, thecompany will provide products and services that respondto the social issues faced by SMEs of the Centenarian Ageand their owners, and contribute to the permanent development of SMEs.

Overview of the Medium-Term Management Plan

GrowthStrategy
Structuraltransformationand supporting
innovations

Innovation in products,
services, and underwriting

Innovation in sales channels

Fundamental
reform inhead office work

Innovation in its
customer-support
framework

Fundamental
reform inbranch office work

Bold shift of personnel into growth areas by enhancing
the productivity of office organization

Open innovation and digital innovation

Management
Platform

Development of human resources andcultivating a challenge culture

Implementation of health and productivity
management

Sophistication and diversification ofasset management

Promotion of ERM management

Integrated Group governance

Formation of the corporate brandCreating shared value with society by contributing
to achievement of the SDGs

48

T&D Holdings INTEGRATED REPORT 2019

Increasing the satisfaction of all stakeholders

Strengthening its ability to deliver a full-range of protection

Leading a new era of corporate coverage

Market expansion

Sales Strategy
With further penetration of the disability benefit field and development of the SME owner and individual business ownermarket as its pillars for growth, the company will refine its approach of providing a full-range of protection integrating
both corporations and individuals, and lead a new era of corporate coverage.
Innovation in Products and Services
In order to respond quickly to the diverse needs of its
SME customers under the new tax treatments, in July
2019, Daido Life, as a leading company in the SME market, launched the new L-type α, J-type α, and T-type α
products. These are industry-first insurance products thatenable the made-to-order tailoring of insurance amounts,
insurance periods, and the balance between premium andsurrender value. Going forward, the company will further
develop its main term life insurance, through the development of health-promoting insurance that supports the
Health and Productivity Management of SMEs. In addition,
the company will work to develop a multi-line model for its
product portfolio, by strengthening responses to disability
benefit needs and enhancing the lineup of products forindividuals, such as nursing care benefits.
In addition, the company will further enhance its ancillary services that support the resolution of the social
issues faced by SMEs. As part of these efforts, from April
2019, the company started providing, free-of-charge forpolicyholders who fulfill certain requirements, the new
Safety Confirmation System, which enables confirmations of employee safety when natural disasters such aslarge earthquakes occur, as well as the Corporate Value
Calculation Service, which can be used as judgment

materials for business management, such as in businesssuccession and M&As.
Going forward, the company will develop services that provide new value through “insurance + extras,” with a focus on
health care and nursing care, management issue support,
and senior and affluent segments, and will push forward with
the integrated promotion of products and services.
Transformation and Innovation in Sales Channels
In addition to strengthening the sales system of existing
channels of in-house sales representatives and agents,
going forward, the company will expand sales channels
that allow for the implementation of high-quality consulting services, such as the establishment of new collaborative schemes that combine the strengths of each channel,
as well as the development of new channels such as
banks and financial institution agents.
Expansion of Markets
By strengthening its capabilities to deliver a full-range ofprotection through the above efforts, the company will
aim to steadily expand its markets, through penetration of
its core markets by further penetrating the disability benefit field and developing the SME owner and individual
business owner market, and through the development of
new markets by strengthening responses to the needs ofthe senior segment.

✔ Strengthening product development that preempts coming eras andneeds (disability benefits and health-promoting insurance for corporations)✔ Enhancing a product lineup that utilizes Group synergies✔ Enhancing management and health support as well as services for thesenior segment✔ Promotions that integrate products and services

Sales Channels

Evolution of the “capability”
to deliver to customers✔ Fundamental organizational reform that allows in-house sales
representatives to play an active and long role, with peace of mind
✔ Establishment of collaborative schemes that combine the strengths of
in-house sales representatives and tax accountant agents✔ Establishment of new financial institution channels through collaborations
with existing channels (in-house sales representatives and tax accountant agents)✔ Transformation of the quality of sales activities through the utilization ofdigital technologies

Markets

Expansion of customers
to protect
Further penetration of thedisability benefit field

Developing the market for
SME owners and individual
business owners
Development of new markets•Senior and affluent segments(inheritance and businesssuccession)•Health promotion segment•Corporate employee market

Expansion of business results(policy amount in force and Embedded Value)

Enhancement of “value”
delivered to customers

Sustainable development by “strengthening our ability
to protect SMEs”

Products andServices

Strengthening its ability to deliver a full-range ofprotection through the integrated reform of
product, service, and sales channels

Overview of Sales Strategy

T&D Holdings INTEGRATED REPORT 201949

Try & Discover for Creation of Shared Value

T&D Financial Life Insurance Company
Aim for sustainable growth by capturing
increasingly diverse customer needs throughleveraging our flexibility in product development.
Outlook for Sales Performance Indicators Fiscal 2019
Annualized premiums of
new policies*

Annualized premiums of
total policies*¥¥

22.0 billion

Masafumi Itasaka

130.0 billion* Sales performance indicators changed to annualized premiums from policy amount, starting fiscal 2019.

Business Model

Strengths of T&D Financial Life

T&D Financial Life specializes in providing insurance
products through independent insurance agents including financial institutions and insurance shops, whichhandle products from multiple insurers.
The company is promoting the further expansion of agent
networks, the speedy development of products differentiated by type of benefit and added value, and cost efficiencies, in order to enhance its presence in life insurance sales
through the independent insurance agent channel.

Against a backdrop of a declining birthrate, rapidly aging
population, and increase in the number of single-personhouseholds, senior customers have growing needs forpost-retirement asset formation and medical benefits.
Needs among customers who are working and/or raisingchildren are rising for death and disability benefits.
T&D Financial Life focuses on the independent insurance agent market. This business is expanding as insurance sales increase at banks, which want to secure profits
due to prolonged low interest rates. Opportunities arealso growing for insurance shops to utilize younger demographics. The company will expand its sales network inthis expanding market and will aim for sustainable growthby offering competitive products that take advantage of
its strength in product development.

Strengths

Customers• Concentrates management resources on the independent insurance
agent channel, owns predominant agent channels of financial
institutions, etc.

Providing insurance products
Financial institutions, insurance shops, etc.

• Strength in product development to create unique products

Sales channel• Streamlined system

Providing products compatible withchannel characteristics

Opportunities

Agent support

Customer support

Product and marketing training byagent support staff (wholesalers)Marketing support from support
desk operations
IT-based agent support system• Increasing needs for asset formation and medical benefits due to an
aging population

Customer support
through call center• Changes in the market, such as emerging new sales channels (e.g.,
OTC sales at banks and insurance shops), and entry of new players
from different industries into the insurance shop field

T&D Financial Life Insurance

50

Representative
Director and President

T&D Holdings INTEGRATED REPORT 2019

Results of the Previous Medium-Term Management Plan (FY2016-FY2018)
Under the previous medium-term management plan,
T&D Financial Life worked toward the “diversification of
product lineup,” “expansion of sales network of insurance
agents,” and “improvement of customer service” as thepillars of its growth.
The strains on the independent insurance agent market
have been growing year after year, due to an increase in
the number of new entrants. However, the company has
provided a lineup of both single-premium and level-premium products and has expanded its agent network interms of banks and insurance shops. In addition, in termsof services, the company began offering paperless newpolicy applications at some agents, from the standpoint of
improving customer convenience, and worked to enhance
its insurance payment assessment system, in order tomake insurance and other payments accurate and swift.
In fiscal 2018, the final year of the previous medium-term

management plan, new policy amount decreased by¥40.5 billion year-on-year to ¥314.1 billion. This was theresult of a fall from the previous fiscal year in single-premium products, which continued to face a severe competitive environment, and came despite a 3.3% increase
in income protection insurance (level premium protection-type products) from the previous fiscal year. The
policy amount in force increased by ¥120.2 billion year-onyear to ¥2,172.9 billion.
In addition, the value of new business was ¥0.1 billion
and MCEV was ¥98.5 billion in fiscal 2018, down from theprevious fiscal year.
As of the end of fiscal 2018, the number of sales agentsof both financial institution and insurance shop agentswas 145, an increase of three from the previous fiscal
year-end.

New Policy Amount

Policy Amount in Force

Reference: Number of sales agents(¥ billions)400(¥ billions)
2,400(Total)
160

354.7
300

322.6
236.2

314.1

1,800

1,808.7

1,806.4

1,879.3

2,052.7

2,172.9

120

1,200

80

100

600

40

0

0
2015

134

137

142

145

130

Mar. 31,2015

Mar. 31,2016

Mar. 31,2017

Mar. 31,2018

Mar. 31,
2019

235.4

200

2014

Financial institutions*1
Insurance shops*2

2016

2017

2018

0
Mar. 31,2015(Fiscal Year)

Mar. 31,2016

Mar. 31,2017

Mar. 31,2018

Mar. 31,2019*1 Financial institutions include banks, securities firms, andcredit associations.
*2 Including franchises.

MCEV

Value of New Business(¥ billions)120(¥ billions)
4
95.8

93.4

97.4

102.6

4.2
3.5

98.5
3

80
2

2.3

40
1

0

0.9

0.1

0
Mar. 31,2015

Mar. 31,2016

Mar. 31,2017

Mar. 31,2018

Mar. 31,
2019

2014

2015

2016

2017

2018
(Fiscal Year)T&D Holdings INTEGRATED REPORT 201951

Try & Discover for Creation of Shared Value

T&D Financial Life’s Medium-Term Management Plan (FY2019-FY2021)
Basic Policy

Realizing further growth through expanding business performance with the aim of raising its presence in the independent insurance agent channel by prioritizing the development and introductionof savings-type products, the proactive introduction of services for customers and agents, and theutilization of information technology.
With no signs of major changes to the low-interest environment, it is expected that banks will continue to place
an emphasis on service revenues from sales of investment
trusts and insurance. It is possible that the scale of themarket could remain roughly the same or expand further
depending on changes in the yen interest-rate environment. In addition, with the insurance shop market presently continuing to grow at a pace of 6% to 7% annually,
the independent insurance agent market, which is T&D
Financial Life’s primary market, is also expected to continue to expand. Meanwhile, the competitive environmentis getting more severe year by year due to an increase in
the number of new entrants into the market.
In addition, needs are diversifying regarding the statusof assets, income, employment, health, and householdcomposition, as well as accompanying financial services,
due to people living longer. Amid these circumstances,various needs suitable for insurance risk coverage are also
expected to increase.
Under the aforementioned environment, in the medium-term management plan, T&D Financial Life will expand its business performance with the aim of raising its
presence in the independent insurance agent market. The
company will prioritize the development and introductionof savings-type products, proactively introduce services
for customers and agents, and utilize information technology. Under this policy, the company will work towardfurther growth by flexibly responding to changes in theenvironment as a company specialized in the independent insurance agent business.

Financial institutions and other agents

Insurance shop agents

Capture increasingly diverse customer needs by leveraging
flexibility in product development

Products

Main target

Main target• Retirement generation (upper mass segment
aged 60s and over)• Working and parenting generation (20s-40s)

Concept

Concept• Savings-type products differentiated bytype of benefit

Growingsales share• Protection-type products that are competitivein terms of pricing and benefits, etc.

Pursue convenience and efficiency by utilizing IT, etc.
Services• Utilize IT, etc. to create more sophisticated services and administration that contribute to convenience
for the customer• Build simple, low-cost services by streamlining customer procedures and making them more efficient.

Improve support for agents by bolstering sales systems
Sales
structure52• Develop and expand agents• Deep cultivation/revitalization by strengthening support for agents in ways that take into accounttheir special features

T&D Holdings INTEGRATED REPORT 2019Key
managementtargets

Expand policy
in force

Improving
efficiency ofoperatingexpenses

Expand presence in the independent agent market

Overview of the Medium-Term Management PlanTopline Strategy
Product Strategy
When products mature in the independent insurance
agent market, sales share tends to decline without certain
levels of price competitiveness.
T&D Financial Life has launched products that meet theneeds of its customers. During the current medium-term
management plan, the company will continue to launchdifferentiated products in a timely manner that consistently deliver price competitiveness.
Development of savings-type products that meet
diversifying needs
T&D Financial Life has launched well-received productsthat share the features of “increase,” “use,” and “bequeath,” such as Shogai Premium Japan (a non-participating whole life insurance) and Shogai Premium World (anon-participating foreign exchange rate-linked whole life
insurance). During the current medium-term management
plan, the company will promote prioritizing the development and revision of products based on marketing.
Product development responding to channel expansion
Along with developing products that meet the needs ofcustomers who visit financial institutions and insurance
shops, the company will go ahead with offering products suitable to each channel via product revisions andadditions of functions and services through post-launchfollow-ups.
Service Strategy
T&D Financial Life has been promoting paperless newpolicy applications. During the current medium-term
management plan, the company will work to further
enhance convenience for its customers by promoting thefurther utilization and application of IT. From a customer-oriented perspective, the company will promote thesimplification of insurance conservation and insurance
benefit payment procedures, in addition to new policy
applications. Moreover, the company will further enhance
its internet and agent support services. Through these
initiatives, T&D Financial Life aims to enhance customer
satisfaction and become the chosen insurance companyof its customers and agents.

Sales Strategy
Development and expansion of agents
Minna Ni Yasashii Shushin Hoken, revised in October
2018, is a product equipped with a unique currency diversification function that mixes together yen and foreign
currencies. The number of agents adding this product totheir lineups is increasing, as it has been well-received
by customers and agents. In this way, T&D Financial Lifeis aiming to develop and expand its agents through its
distinctive products that capture the needs of its customers and through products that combine consistent pricecompetitiveness with differentiated characteristics.
Strengthening of agent support system
During the previous medium-term management plan,
T&D Financial Life worked to increase agent support staff(wholesalers) in order to enhance its agent support system. In the current medium-term management plan, thecompany will work to raise the number of visits and training frequency for recruiters and enhance training tools, inorder to realize more extensive support.
In addition, by utilizing IT, the company will promote thestrengthening of a comprehensive support system. This
includes working to enhance office services relating tosales support.

Shogai Premium Japan 4

Shogai Premium World 5

Cost Operation Strategy
In the current medium-term management plan, the company is aiming to promote topline initiatives and administrative
efficiency and enhance its revenue base through improved productivity.
The company will push forward with cost reductions, such as by cost-center efficiency through the digitalization of documents
used in procedures and the proactive utilization of internet services, as well as by restructuring administrative operations.

T&D Holdings INTEGRATED REPORT 201953

Try & Discover for Creation of Shared Value

T&D Asset Management Co., Ltd.
One Step Forward, Together
with Our Clients
Outlook for Full-Year Key Performance Indicator Fiscal 2019
Adjusted operating income

3.25 billion

Chikahiro Tsuboi¥

Representative
Director and President

Review of the Previous Medium-Term
Management Plan

Going Forward

T&D Asset Management has worked to expand assets
under management, focusing on managing the assets ofdomestic and overseas pension-fund clients and sales ofinvestment trusts to institutional investors.
In the previous medium-term management plan (FY2016FY2018), the company grew steadily by developing andproviding investment products through alliances with overseas investment institutions, in addition to strengthening
its in-house investment capabilities. This was against the
backdrop of the normalization of negative interest rates,
as various asset owners suffered investment difficulties.
Adjusted operating income and the balance of assets
under management fell in fiscal 2018 from the previous
fiscal year-end, due to the impact of a decrease in public
investment trusts as a result of declines in emerging markets. However, the balance of assets under management
saw a net increase of ¥500.0 billion or more from the startof the previous medium-term management plan (fiscal
2015), as an increase in the balance of privately placed investment trusts throughout the three years drove growth.
Adjusted Operating Income (by Business)(¥ millions)

Investment trust business

Investment Trust AUM

Investment advisory business(¥ billions)

4,000
3,000

The severe competitive environment is expected tocontinue in the investment trust and advisory industry
going forward, as fierce competition takes places within
investment management. However, the market can besaid to be promising for the future, due to growing needs
in Japan for post-retirement asset management alongwith the rapidly aging society, in addition to a significant
expansion in the scale of the market as a global glut ofmoney continues apace.
Under these circumstances, in its medium-term management plan (FY2019-FY2021), the Group is aiming for further growth of its asset management business in order todiversify its business portfolio, in addition to strengthening its life insurance business, the T&D Insurance Group’s
core business. T&D Asset Management, positioned toplay a central role in the above, is aiming to expand its
business while collaborating with other Group companies.

Public investment trusts

2,935
781

2,000

2,484
702

2,589

3,220

3,163

634

592

2,154

1,976

731.3

600

2015

2016

2,586

2,571

613.4

2017

2018

300

0

0
2014

(Fiscal Year)T&D Holdings INTEGRATED REPORT 2019

823.2

936.9

952.5

410.2

275.9

203.2

240.8

245.9

192.7

Mar. 31,2015

Mar. 31,2016

Mar. 31,2017

Mar. 31,2018

Mar. 31,
2019

Please see page 30 for details of asset management business initiatives in the Group’s medium-term management plan (FY2019-FY2021).

54

1,145.3

900

612

1,782

1,182.9
1,064.0

455.4

1,000

Privately placed investment trusts

1,200Pet & Family Insurance Co., Ltd.
Bringing peace of mind to a full life withpets who are members of the family
Outlook for Full-Year Key Performance Indicator Fiscal 2019
Number of policies in force

Number of new policies

162,000

34,000Masao Mikame

Representative
Director and President

Review of the Previous Medium-Term
Management Plan
Pet & Family Insurance Co., Ltd. provides pet insurance
through pet shops. In April 2019, the company transitioned
from a small-amount short-term insurance company toa non-life insurance company. Under the previous medium-term management plan (fiscal 2016-2018), we focusedon development and expansion of pet shops, the corechannel, while working to diversify sales channels through amulti-line approach using online and mail order shopping.
In fiscal 2018, the company had 31,549 new policies(compared to 31,283 in the previous fiscal year), backed
by greater recognition of pet insurance. As a result, thenumber of policies in force increased steadily, to 146,104(from 131,024 policies as of the end of fiscal 2017).
Reflecting these sales results, net premium income roseby ¥700 million to ¥5,100 million, roughly 1.8 times thelevel before the start of the previous medium-term management plan (fiscal 2015).

Towards the Future
Japan’s pet insurance market is expanding (on a premium income basis) year by year. However, many owners
enroll in insurance when buying a pet at a pet shop, andincreasing the recognition of such insurance among existing pet owners will be a focal point for future growth.
The Group’s medium-term management plan (fiscal
2019–2021) aims at synergies between the pet insurance
business and the domestic life insurance and digital
insurance businesses. In addition to expanding sales
in existing channels, the company will consider sales
through the Group’s life insurance in-house sales representative channels and building new channels though
digitalization. Furthermore, the company will work gradually to develop products according to customer needs
and channel characteristics.

Number of Policies in ForceNet Premium Income (Pet Insurance)(thousand)(¥ millions)

146

150

6,000

5,163

131
115

100

4,455

4,000

96

3,571

76

2,943

50

2,000

2,312

0

0
Mar. 31,2015

Mar. 31,2016

Mar. 31,2017

Mar. 31,2018

Mar. 31,
2019

2014

2015

2016

2017

2018

(Fiscal Year)T&D Holdings INTEGRATED REPORT 201955

Try & Discover for Creation of Shared Value

Group Companies
As of September 30, 2019

The T&D Insurance Group comprised the holding company, 17 consolidated subsidiaries, and 4 affiliatedcompanies as of September 30, 2019. Centered on the life insurance business, the T&D Insurance Group’s
operations are outlined below:

Insurance & Insurance-related
Businesses

Investment-related
Businesses[8 companies][8 companies]

Insurance■	Taiyo Life Insurance Company(Life insurance business)■	Daido Life Insurance Company(Life insurance business)■	T&D Financial Life Insurance
Company(Life insurance business)■	Pet & Family Insurance Co., Ltd.
(Nonlife insurance Business)● Capital Taiyo Life Insurance Limited(Life insurance Business)

Insurance-related■	T&D Confirm Ltd.
(Policyholder confirmation services)■	Toyo Insurance Agency Co., Ltd.
(Insurance agent)■	Daido Management Service Co., Ltd.
(Insurance agent)

Investment Management andAdvisory, etc.
■	T&D Asset Management Co., Ltd.
(Investment advisory and investment
trust services)

Other Investment-related■	T&D United Capital Co., Ltd.
(Principal investment, Investment
management [administration])■	T&D Lease Co., Ltd. (Leasing)■	Taiyo Credit Guarantee Co., Ltd.
(Credit guarantee services)● Alternative Investment Capital Ltd.
(Investment in private equity funds)	Other subsidiaries and affiliatedcompanies, etc.: 3 companies

Administration-related
Businesses[5 companies]

Administration-related■	T&D Customer Services Co., Ltd.
(Life insurance policy clerical services,
including drafting, amendment, custody and distribution of documents,
and delivery of securities)

General Affairs andCalculation-related■	T&D Information Systems, Ltd.
(Computer software and systemservices)■	Nihon System Shuno, Inc.
(Premium collection)■	Zenkoku Business Center Co., Ltd.
(Premium collection)● Thuriya Ace Technology Company
Limited (Designing and developing
information technology, information
technology systems, software solutions and business solutions for the
insurance industry)

Companies marked by ■ are consolidated subsidiaries, and companies marked by ● are affiliated companies accounted for by the equity method.

56

T&D Holdings INTEGRATED REPORT 2019